What is a reasonable goal in negotiation? Can both parties walk away from the table with even more value than they expected? Many professional negotiators prefer to aim towards what is known as a Win-Win solution. This involves looking for resolutions that allow both sides to gain.
Think about this as a possible goal: to create joint value and divide it give11 concerns for fairness in fhe relationship.
You may say to us, “Get real! My clients don’t do business that way!” or “Buyers are not interested in creating value, much less in being fair!” Or as the top salesperson for one of our Japanese clients once said: “You don’t understand; the Japanese buyer dictates what we do—and all he cares about is price! We don’t have any say.” So, if that’s what you’re thinking, we are not surprised.
However, we have convinced many top selling and purchasing organizations to adopt the reasonable goal in their negotiations. We’ve done this for one good reason: it works. Both sides benefit when you create joint value and divide it given concerns for fairness in the ongoing relationship. For example, if you’re trying to sell your product to a customer whose main concern is price, the customer can look at this negotiation in one of two ways. He can say, “My goal is to get the product for less,” and simply demand a lower price. If you, as the salesperson, accede to his demands, he’ll be happy because he’ll get what he wants, but you’ll be less happy because you won’t be making as much money as you had hoped or expected to make.
What if, however, the customer considers his goal to be “to create joint value and divide it given concerns for fairness in the ongoing relationship?” If he’s thinking along those lines, he may still suggest that you give him a deeper discount than you’re offering, but in return he might agree to a longer commitment or higher volume or provide you with access to other divisions of his company—options that would cost him nothing. In this situation, you are more likely to offer a better discount because you are getting more of his business. In fact, you would both come out of the negotiation with more than you anticipated going into it. The best win-win agreements often spring from presenting multiple offers rather than a single, lone offer or proposal. And, you would establish a positive relationship that is likely to bring you even more business in the future.
“It sounds all right in theory,” you say, “but does it really work in practice?” Yes, it does. Aiming to create joint value and divide it given concerns for fairness in the ongoing relationship changes the nature of the negotiation in positive ways. It helps you create and negotiate larger deals because it leads to tactics that are more likely to yield larger deals. As a result, even if it doesn’t work every time, in the end you make more money because the individual deals are larger. To guide these win-win perceptions, give your negotiation counterpart a voice in the decision process. Even when you are in a position of power, be sure to acknowledge your counterpart’s perspective and invite him to express his views, to suggest alternatives, and to react to initial proposals. Another benefit is the positive effect on the climate and tone of the negotiation as a result of sharing the goal with your customers. Of course, they tend to be very skeptical at first. But once you prove that you mean what you’re offering over the course of several negotiations, your sincerity not only makes individual negotiations easier and more productive but has a positive impact on the ongoing relationship.
Whatever the circumstances, in order for the situation to be a true win-win, both sides should feel comfortable with the final outcome.
Recommended Books on Negotiation
- ‘Influence: The Psychology of Persuasion’ by Robert B. Cialdini
- ‘Getting to Yes: Negotiating Agreement Without Giving In’ by Roger Fisher and William L. Ury