Q & A Table of Contents
How To Maintain A Good Relationship Without Leaving Money On The Table
From: Alfredo, Sao Paulo, Brazil
Question: I am in a commodity type of business and sometimes after the negotiation I get the impression that I left money on the table to avoid jeopardizing the relationship.
How can I get the best deal without affecting the good relationship with customers ?
Response: In many ways your question underscores a crucial truth: we should treat virtually all negotiations as episodes in ongoing relationships. The problems is, to what extent is our focus on the relationship making us accept bad deals?
Before each negotiation you need to consider your BATNA, your Best Alternative To a Negotiated Agreement. Is this customer likely to give me as good a deal as other customers? Is negotiating with him/her worth my time? Does the overall volume of business yield a sufficient profit so that the small profit on individual deals adds up to a larger profit because we make more deals in total?
You also need to examine what makes sense for your business. You need to think about the bottom line, about your reputation as a 'pushover', about your personal position within your company and compared with other people in similar jobs.
Can you go to your customers and say, "I really value our business and personal relationship. But I must tell you that the relationship is not everything; I have to make good business decisions with my customers." You can go on to ask, "How would you act if you were in my situation to keep our relationship strong, but also to make our business deals more properly reflective of the value of what I am selling you?"
Listen closely to the responses to your questions. Customers may say they think the relationship is just dandy, that they are delighted with the prices they are paying, and that if the price weren't so good, they would go someplace else. That kind of response may encourage you to be a bit more demanding.
They might also indicate they understand your dilemma, that they don't want you to be dissatisfied with the relationship because you give away too much. An answer like that may open the door to some collaborative decision-making. Perhaps you and the customer may conclude that a price increase would not jeopardize the relationship. Again, if price is what keeps them happy, then you've got to face the fact the relationship is not really mutual.
Even if you don't feel comfortable 'opening up' with a customer, you do need to examine your personal strategy. Listen more. Don't say 'yes' or 'no' too fast. After the customer is finished talking, stay silent. Give him/her a chance to worry whether they are threatening the relationship by pushing too hard.
You cannot change your own personality, but you can examine the things that are important to you and assign appropriate priority to potential outcomes.
Good luck and good negotiating,
Steve
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