Categories of Currencies in Negotiation
Let’s push the thinking on currencies even further by suggesting some different categories. Because currencies of exchange are synonymous with resources, they can be tangible (e.g., money, equipment) or intangible (e.g., recognition, time). Here are some examples of currencies:
Financial: Even though money is considered prime, there are many ways other than price/rate to directly contribute to the bottom line in a negotiation such as volume discounts, lower rates with a longer term contract, extended payment terms, leasing options, or rent-to-own. When dealing with employees, financial currencies can include salary, bonus, overtime, budget discretion, commissions, tuition reimbursement, vacation time, conferences, or professional meetings.
People: This may include loan of staff, consulting services, your own willingness to participate and work side by side with the other party, dedicated personnel, technical assistance in implementation, administration, or help with regulators.
Facilities: You may own a facility, co-locate equipment, host a test or demonstration site, or agree to serve as a storage facility or parts depot.
Equipment: Equip facilities through purchasing, borrowing in the start-up phase, providing a replacement if equipment can’t be repaired in a timely fashion or extra equipment during peak periods.
Priorities: This may include a willingness to accelerate installation, swap a deadline or priority with someone else, or longer term contracts.
Information: This may consist of sharing your expertise, industry knowledge, technical consultation, access to specific data and information, referrals, and serving as a reference.
Recognition and rewards: This may include formal awards, willingness to give credit or acknowledgment, “favored vendor” status, partnering of customer and supplier, joint advertising, praise about an employee given to his or her manager, presenting at professional conferences, or exposure to other industry people.
Proprietary agreements: This may consist of special rights or privileges, first access to new technology, copyrights, geographic exclusives, or “last look” in contract bidding, “right of first refusal.”
Mitigation of risks: Parties may need to minimize or eliminate risk (real or perceived by the other party) and discuss price escalators, warranties, guarantees, indemnification for loss, and upgrades to eliminate risk of obsolescence.
The previous list just scratches the surface of possibilities. Karl and Steve Albrecht in Added Value Negotiating[3] suggest four questions to identify opportunities to add to the total value equation:
By asking these questions, you can expand the list of potential currencies and ensure that those currencies are tied to specific needs—theirs and yours.