Q & A Table of Contents
They Won't Tell Me What They Want
From: Robert, New Britain, Connecticut
Question: I do not know what the other side wants in the form of a concession from us.
I have asked them to tell me what they are offering to pay and the following is the best I've gotten from them:
"We have your recent invoice but suggest a revised one be sent, reflecting the reality of the situation."
How do I respond to the above statement without offering a concession that can be negotiated against me later and get them to tell me what they are willing to pay?
Response: Information is the fundamental asset in negotiation. Ask the folks with whom you are negotiating what they mean by 'the reality of the situation'. Try to ask open-ended questions that gives them an opportunity to break down the individual elements of what they call 'the situation'.
The more you understand what they mean, the greater the likelihood you'll be able to respond in a way that serves your interest.
To prepare for the likely elements of their response and to figure out what questions you should ask, you might want to use the Interest Map(c) technique outlined in my book (Negotiating Skills for Managers; McGraw-Hill). A simple summary of the concept for use in this situation is to make a series of assumptions about issues that may be elements of 'the situation' to which they refer: the economy, the market price for the kind of services you've provided (local market and in other areas), their financial situation (creditworthiness, cash flow), the impact of any modification in your invoice on your long-term relationship with them -- as well as with your other customers and their other suppliers of goods and services, and whatever other issues you may think of.
If you ask questions based on the variety of assumptions you make, you will learn more about what makes your customer tick -- and the value they place on your services, the relationship, their reputation, etc.
Ultimately you have to understand your bottom line; not just the amount of money involved, but also reputation, ego, and your capacity to charge appropriate fees to this customer in the future and other customers as well. You can respond to their communication by saying that, if the figure on the initial invoice may not be to their liking, if they will pay in 5 days the price is $x, if they will pay in 10 days the price is $x plus 20% of x, etc.
You can also take your bottom line (for example $1,000) and tell them that something in the range of $1,500 to $2,000 could make sense. They'll probably offer $1,500 and you'll be $500 ahead of your minimum while they'll feel as if they've saved $500.
Ask questions. Be careful not to offer anything that does not respond to your interests. Think about the overall context of the relationship.
Good luck,
Steve
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