How to Set the Stage
As a general rule, if you are in charge of the physical arrangements for the negotiation, you want to make the other side as comfortable as possible. If you are not in charge, you may encounter someone who is playing games with the location.
The key to dealing effectively with this kind of game player is to recognize the tactic. As we said before, a tactic recognized is a useless tactic. For example they might seat you in an uncomfortable chair so you are forced to look at the buyer sitting in front of a bright window so that you can’t see properly, or perhaps your chair is too low. These are tricks people use on occasion, believing it gives them an advantage.
And, it will work if you don’t recognize what’s going on. You’ll be uncomfortable and distracted. Once you recognize that they are using these tactics, you have two choices. Either you can decide to live with it and ignore it, or you can physically move or make some other adjustment so you are no longer uncomfortable.
For example, if you can’t see them because of the bright window in back, pick up your chair and move it. If they have the nerve to ask you why you did that, simply explain that you couldn’t see them. They are certainly not going to tell you that that was what they intended.
One salesperson told me that he was in a buyer’s office trying to make a sale and was seated in a chair positioned underneath a massive hanging plant that kept falling into his face. He kept moving it, it kept falling down, so he finally picked up the chair, moved it to the side, and sat back down.
Whereupon the buyer said to him, “Congratulations. You just passed my wimp test.”
The conventional wisdom is that being at the other person’s site puts you at a disadvantage, but that is not always true. In fact, there can be some real advantages in going to their site. You can then meet with other people in their organization if necessary. They have all of their information there.
Of course there can also be some real advantages to bringing them to your site. Meetings with senior management, facility tours, the ability to better wine and dine them, all of these things can enhance your negotiating position.
Setting Ground Rules
I was recently involved in a major sales negotiation. It started at 8:30 a.m. and after the obligatory “we all love each other so much, we’re partners, and we really want to make an agreement today,” the team leader on the customer’s side said,
I’d like to make a proposal. It is now 8:30. I suggest that we work on our issues until a quarter of ten. At that point I suggested that we meet separately for 15 or 20 minutes and then come back together and work until 11:00. Then we will need to adjourn for an hour because our side needs to participate in a conference call. After that, hopefully we can get back together and wrap things up. As you know, I need to leave at one o’clock, and my colleagues here need to leave at three o’clock to catch an airplane.
This is a perfect example of setting ground rules at the beginning of a negotiation. Had we been uncomfortable with their proposal we would have negotiated. In this case however, it tracked very closely to what we had in mind and so we readily agreed.
Ground rules can involve things other than timing. For example, in a recent negotiation we asked the other side to give us an overview of the concerns that they had with our most recent proposal. They brought up a concern, explained their position, and asked us to respond. We said,
Actually, we would really like you to give us an overview of all of your concerns. If you could lay out the big picture for us, I think it will be easier for us to respond and deal with each of the individual issues.
Our concern here was that we didn’t want to potentially reach agreements in one area that might ultimately make it difficult to reach agreements in other areas. We wanted to look at all of their issues because clearly some of them might, and in fact did, interact with each other. I think that they would have preferred to deal with issues one at a time, but it tends to be very difficult to say no to that kind of a request, and they then proceeded to outline all of the concerns that they had.
Other types of ground rules might include nondisclosure agreements or defining and limiting the scope of the negotiation. The time to set ground rules is at the beginning of the process and, if you are not happy with the ground rules that the other side is trying to create, make sure that you negotiate them then and there; don’t let them slide.
Telephone Negotiations
There will be many times where you will have to negotiate on the telephone. The disadvantage is that you can’t see the other party, you can’t read their body language, and you can’t use your own body language to communicate. If you are used to telephone negotiations, you have already made the adjustment for this. If telephone negotiations are somewhat new to you, you need to be aware of the extent to which most of us depend upon nonverbal communications to complement our verbal message.
When I wrote my first book on negotiating many years ago, the publisher arranged for me to do both radio and TV publicity. At the time I had had very little experience with the media. I figured that I would be OK on radio but would be nervous with a lot of people watching me on TV. It turned out to be just the opposite. On TV, I could use all of my tools of communication, both verbal and nonverbal. On radio, I had the sensation of trying to squeeze all of me into that little microphone. It took a while before I figured out what I needed to do to be effective on radio.
However, the main concern in a telephone negotiation has to do with who is prepared to negotiate. Let’s say that you are a salesperson for ABC Widgets. You are sitting there trying to sort out a delivery problem for one of your customers and a prospect calls you up.
Hi Bill. I just wanted to go over that proposal you sent us last Wednesday. Your pricing for the 101 and 223 widgets are fine. Unfortunately, the pricing that you quoted for the other seven sizes is really way out of line. You are not even close to being competitive. What can you do for me on those items?
OK, she wants to negotiate prices. What do you think she has been doing for the last 15 minutes? That’s right, she has been planning, preparing, and getting ready for the telephone call.
You, on the other hand, have been taken off guard, working on a totally different matter. It’s even possible that you can’t recall what proposal she is talking about.
Basically, you have been telephone ambushed. When this happens, your first reaction is to negotiate, so you stall for time, looking for the materials and trying to recall what you had previously agreed to. But, the chances of your doing well in this negotiation are remote indeed.
• “Well, you know... I think that really our prices are usually pretty fair...I don’t know... OK... let me try to pull up your proposal here. Ah, give me just a second here.”
You skim over the information you can put your hands on. Then you go ahead and try to negotiate the deal. But you are completely unprepared to do so.
• “Okay, what do you think if we cut the price 15 percent across-the-board for those items? Do you think that will do the trick?”
If you are not ready, then don’t negotiate. Simply take a deep breath and say something like:
• “I would like to pull up your file and get everything in front of me. Can I call you back in 10 minutes, or at 2:00, or tomorrow at 9:00,”
Depending on whether it is just a matter of pulling files up, or you have to go into overdrive to get your negotiation plan ready to go.
Now obviously, if you have been working on the file recently, or if there are only one or two issues remaining to negotiate and you have everything pretty clear in your head, put them on hold for a minute, get the file out or bring up the information on your computer, and go ahead and negotiate.
• “Would you mind if I put you on hold for a minute? I just want to pull up your file and grab a couple of other items and I will be right back.”
However, if you are really not ready, have the discipline to say “time out” and “I will get back to you.”
One other thought on telephone negotiations. Once in a while you will want to have a team negotiation on the telephone. Usually, you do it as a conference call. You get your team into a conference room, set up one of those nice conference room microphones, and call the other party and negotiate.
That’s fine, but there is an alternative you can use that can be quite effective. Instead of going into a conference room together, you could have each person on your team stay where they are and log in remotely to a conference call. You can do this either with an in-house service if you have one, or one of the many conference call services that are available. At the same time, each of you logs onto a live chat service, either through your own network, or through a web-based service.
Now, while you are having the conference call with the other party, you can also text each other in real time. This can be an extremely handy tool to keep everybody on your team on the same page and to pass information back and forth while you are negotiating.