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Thursday, 12 November 2009 00:00

Negotiating Strategies to Protect Your Interests

The person who thinks, plans and prepares is almost always going to come out ahead of the person who does not. Planning (coupled with a minimal amount of common sense) is the single best advantage in successfully concluding a negotiation.

Imagine this scenario: you recently sold three new and very expensive products to your best customer. You have just taken a long, angry call from the same customer. The products you sold are not meeting the performance specifications in the application. The customer has demanded the following:

1. three new, larger size products as replacements (more expensive than the original units)

2. the change-out costs for replacing the units; and

3. a “project management fee” to cover the customer’s management time.

You agree to meet with the customer to resolve the problem. How should you prepare?

Get All the Facts:

The first key to leverage in a negotiation is an understanding of all of the facts and what the other side really needs out of the situation. There may be facts that you do not know about. There may be facts about how the products were applied or how they were maintained. Prior to having the meeting with the customer, think about a “pre-meeting” the night before in a more informal context, such as over drinks or dinner. If you can have such a meeting, probe about the facts, about timing and deadlines, and about the personal and business situations surrounding the customer’s claim. Did they make an error when they ordered the products or is someone at the customer looking to possibly shift liability away from themselves? This is not the time to negotiate a resolution, but this is a good time to make sure you understand all of the facts.

Try to identify the individual decision maker at the customer that you need to convince and try to separate that individual and his or her personal interests from those of his employer. Do you have a long history together? Have you done favors for him or her in the past? Now is the time to also leverage the personal working relationship. You have been working over time on personal relationships with your customers, haven’t you?

Develop Going-in, Fall-back, and Walk-away Positions:

Prior to the meeting, develop a plan, including a “going-in” position and a “fall-back” position. Consider all of the possible options, from doing nothing to meeting the other side’s full demands. Improve the most promising options. Decide on the most appropriate option if you determine that you cannot meet the other side’s full demands. Importantly, know your “walk-away” position. This is the pre-determined economic tipping point, beyond which you think it makes no sense to go. Given the value of a matter, and the prospect of litigation, this economic tipping point may not be exactly the point you may have initially considered.

Practical Tips:

When looking at options, and when presented with demands by the other side, the best response is never to simply say “No.” Instead, try to draw the other side into a creative partnership with you. Never close a door; keep opening new ones. Be creative. suggest that the matter be approached on a more constructive level. If you choose to react openly to the other side’s anger, say that you find it unproductive, and suggest focusing on a specific, non-emotional issue. Understand the Logic of the Other Side’s Proposal

Sometimes there is great leverage in understanding the logic behind the other side’s proposal. Instead of focusing on the demands, focus on the logic underlying the demands.  

Assert your needs. Concentrate on problem solving that seeks to satisfy both parties. Commit to a solution only after it is certain to work for both sides. Try using hypotheticals. In other words, try some “what ifs.” “What if we did A and B, but not C, but did D, too? Would that work for you?”

Invite Criticism:

Ask the other side to critique your proposals. What do they like and what don’t they like? If you ask for an explanation of what is wrong with your proposal and they cannot adequately explain their position, you will get a little more leverage. A related tactic is to ask the other side for “advice,” such as “What would you do if you were in our shoes?”

When under attack, listen. The best response is to keep the other side talking because new information can increase the room for movement and the number of variables.

Listening without defending helps to defuse any anger. And, if you are listening, you are not making concessions. Invite the customer to help shape the proposal.

Remember, no two fact circumstances or negotiations are exactly alike. In addition, whenever you throw in the “human” factor, i.e., personalities, the personal dynamics are often what drives the success or failure of the discussion. Our lawyers can ably assist you in considering the possibilities, determining the most appropriate options, developing reasonable positions, and sitting at the table with you to represent your interests.

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