You know how in the movies, when they’re talking about negotiations, and to underscore how important it is some fat, hairy man with too many gold chains says, “Name your price”?
I hate that part.
I hate that part because it’s the wrong thing to focus on. It’s like haggling without knowing what the currency is. If the price is 5,000, wouldn’t you prefer knowing if you’re dealing in Sterling or Dollars or coffee beans?
In negotiations, the currency we’re dealing in is dictated by the deal. What we give, what we get and what we give up is the currency; it is what makes the exchange valuable and why we continue to engage even when we feel like we’re not getting a great deal.
Weird then that we don’t really talk about what we’re giving up when we negotiate. We talk a lot about what we want to get (a price, a job, a piece) and what we’ll give to get it (time, work, money), but we rarely talk about what we’re giving up, what we’re conceding, to continue the negotiation.
I think part of the reason is that we assume the other side knows what we’re giving up. We assume that the other side is spending as much time and attention as we are tallying up the line items we’ve given up on, the profit margin we’ve nudged sideways or the issues we’ve dropped in an effort to keep things moving forward.
But they aren’t. And you know this because if you think about it, you have no idea what the other side gave up in your last negotiation. (But I bet $5 you know everything you gave up.)
When you name what you’re conceding in a negotiation, you identify the currency you’re dealing in; you name the value of the deal.
And really, who do you want dictating the value of the deal? You or the other guy? Yeah, I like it when it’s me, too.
So what does it look like when you name what you’re conceding?
- Explicitly state what you’re doing. “I understand that the time line is important to you. It’s going to be hard for me to meet, but I’ll agree to it and I’ll stick to it.”
- Ask for something in return. “You know that my bid on this job is based on your time demands and the complexity of the work. If I gave you a 5% discount on this work, would you agree to give the right of first refusal on your next two projects?”
- When possible, recognize what they’ve given up. “I appreciate you agreeing to the residual structure; it shows me that you believe this has as much potential as I think it does.”
- Summarize when you get to an impasse. “Henry, I know we’ve both given a lot to keep this deal going, and I appreciate it. From what I can tell, you’ve been willing to be flexible on A, B and C and I’ve given room on X, Y and Z. Does that sound right to you?”
Now get out there and make Jay Allison proud.
Categories: Negotiation Strategy