Q & A Table of Contents
DOING BUSINESS WITH CLIENTS AND THEIR EGOS
From: Bangalore, India
Question: What happens when you are in a business where the rates or services are standard and inflexible... and a client still feels he must negotiate , just so that he feels that HE has got a realy good deal, what do you so ?? It's awkward because your company rules do not allow a non transparent system , and here's a client who is upset because he hasn't been recognised as an individual. Basically , how do you answer " Yeah yeah, all that is fine. But what are you going to do for ME now ??" I've had a problem a couple of times on this one, and I run a business center with clients from all over the world.
Response: My favorite story in response to the issue you raised happened with a loan officer for a local bank. Banks compete for customers by offering different rates and terms when they lend money; loan officers have to cope with their bank's limitations on how much they can 'give' on rates and loan terms.
In this case, the loan officer represented a small bank in a market dominated by a small number of very large banks. A customer arrived at his desk proclaiming, "I have been a client of your bank for a long time, borrowing millions of dollars over the years. I want to borrow a large sum now. Giant Bank has offered me a loan with the following interest rate and repayment terms, and Monster Bank has also made me an offer which is much better than anything you have offered me. What can you do for me?"
The loan officer told the client that he would offer the most attractive package he could; but the customer was not satisfied: "I have been a client of your bank for many years. I think we have built up a close relationship, and frankly I cannot understand why you can't give me special treatment."
As you can imagine, the conversation was a bit more lengthy, but these were the points the client repeated in a variety of ways. At one point the client said, "If you don't believe me, I can show you the commitment letters from Giant Bank and Monster Bank. It will prove they really want to do business with me and are really stretching to treat me right."
After listening to the client, asking some questions, and reflecting on the situation, the loan officer excused himself for a moment. He ducked into an adjacent office and telephoned his bank's president. "Mr. X is here. He is a long-time customer of our bank, but now Giant Bank and Monster Bank are trying to steal him from us with offers we cannot meet. However he has been spending much of his time with me emphasizing the importance of his relationship with our bank. What can we do?"
The bank president pondered what his loan officer told him. He concluded that the client would not have spent so much time and effort focusing on the relationship unless there were more to the story than interest rates and loan terms. "Tell you what," said the president, "tell the client he is right, that our long-term relationship has been very important to the bank. Let him know that we have observed his business acumen over these many years and that we think he has a lot to contribute to our bank. Ask him if he would be willing to become a member of the bank's advisory committee on small business, so that we can benefit from his good sense and knowledge."
Upon returning to his office, the loan officer repeated what the bank president had said. He said nothing at all about the interest rate or the terms of the loan. The client slowly smiled, "I would be honored to serve on the advisory committee. And I am quite pleased we can continue our relationship." He borrowed the money at the best rate and terms the small bank could offer, which were not as good as Giant Bank or Monster Bank. But, in addition to the impact on the client's bottom line, the resolution had a favorable impact on the client's ego. He felt wanted and appreciated.
Everyone wants to feel as if they are special, that they are getting special treatment. Ego is an enormously important part of negotiation. One fundamental rule of the negotiation process is to treat other parties with respect, to take them seriously. Even if you cannot agree with them or give them everything they want, you can say, "I understand you. That does not mean I agree with you. But my response to you is based on what you have indicated is important to you." You are making your response responsive.
If you explore the underlying interests of the people with whom you negotiate you may discover issues that can be addressed in the solution that may be outside the official parameters of your price or conditions guidelines -- but which can give the party with whom you are dealing the sense that you have indeed taken him/her seriously and are indeed treating them as a special individual.
Don't forget , you can fight fires without burning bridges, Steve.
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