Negotiations in life and business are very much like a competitive game, albeit a game with important consequences and yet it can be great fun.
That said, like in any game one needs to know the rules. No point going onto a playing field to play, say “rugby” and yet using the rules from “AFL”.
No this is not about the merits of one code of footy vs. another so don’t throw the baby out with the bathwater because of my poor analogy.
So….you need to know the rules of negotiating and you definitely need to know how negotiating power can flow and be affected by the actions or inactions of the various parties to the negotiation.
Let’s take a real life example:
Sometime ago I happened to be out (stay with me men…there’s a good point to this story) with one of my sisters-in-law (Betsy) and accompanying her as she did some retail therapy.
We went into a few shops and this was the scenario I observed:
Scenario 1:
Betsy sees something she really likes and starts to get enthusiastic making comments about how this jewellery will go with that outfit etc You get the picture. All of this excited exchange was made between Betsy and her Mum with me being an observer, IN THE PRESENCE of the store owner.
Now I dare you, go ahead and negotiate and get a better price/terms on that item.
Clearly that was going to be very difficult since the store owner had insight on Betsy’s desire level for the item and held firm. The store owner in this scenario had the POWER.
Now had I not been there Betsy would have bought the item at the ticketed price and that would have been that.
How could that situation have worked out differently?
Men are you still with me … this is the bottom line….if you want your loved ones to enjoy retail therapy AND for you to enjoy it (well I mean you can at least minimise the “damage”) then I suggest your “significant other(s)” learn how to negotiate properly and effectively.
This can mean thousands of dollars in savings a year to a typical family…..your hard earned money that you can save and put to other uses.
KEY TIP:
Open a Savings & Investments Account and any money you “save” in this way, put it into that account (or pay it off your mortgage) otherwise after a year you will have nothing to show for your “savings”
Back to the story …
So what happened Paul?
Well after watching this scenario several times in several shops I pulled Betsy and her companion to one side and I explained to them that they were sabotaging their ability to negotiate a fair price for all parties because of their demonstrated enthusiasm and body language that was too easy to read.
Then followed a brief session whereby I instructed them on several techniques in 15-20 minutes and they both went into a few stores with me initially modelling how to negotiate and secondly watching Betsy actually do it.
What techniques did I share you ask?
Good question….but outside scope of this article…..I will cover this in more detail in a future article. Nevertheless here are a few teasers!
I assisted Betsy to:
Identify & then negotiate with the right person (who do you think that is in this situation?)
To not show positive emotions and in fact to act “counter-intuitively” by showing mild interest at best or indifference
To be clear on what her objective was and what her “bottom line” was in acquiring that item (I gave her a target of achieving 20% off the ticketed price) to start with.
To ask certain “trial close” questions that uncover critical information from the “seller”
And, know when to walk away.
RESULT: Betsy was initially quite nervous and insecure (after all it’s a new skill set and not something that is common in our western culture). Now some 2 years on Betsy has become quite masterful at negotiating optimal deals for herself and her family in respect of all manner of good and services that she purchases. She regularly reports with glee the results of her “retail therapy” expeditions and estimates she has saved herself several thousand dollars in the last 2 years.
NB: This story is NOT just about getting a better price. Because win win negotiations are about more than price. However I use the story for illustration purposes only.
IF you are a Store/Franchise Owner reading this you may be thinking…..thanks Paul….that’s the last thing I need you sharing with people in the current economic climate.
Well here’s the thing….
Good negotiations are about a WIN WIN result - not a WIN LOSE.
IF as a Store/Franchise owner you are not comfortable that you or your team have effective “sales” and negotiation skills
THEN perhaps you should consider up-skilling yourself and your staff. After all your team should be more than just “order takers”.
I invite you to contact me for a conversation about how we might help IF your turnover exceeds $500,000 p.a. and you employ at least 3 staff.
(If your business currently turns over less than $500,000 p.a. and you are serious about taking it to the next level….stay tuned for news in coming weeks about an exciting opportunity for you to get the expert assistance you need to make your dreams become reality. Keep reading Your Business to be first to find out about more!)
Finally what is the relationship between NEED & NEGOTIATING POWER?
NEED is inversely proportional to POWER
HIGH NEED (I want/need that NOW) = LOW POWER
LOW NEED (If I get it ok…If not I’ll keep looking) = HIGH POWER
Now for a laugh
A man is getting into the shower just as his wife is finishing up her
shower, when the doorbell rings.
The wife quickly wraps herself in a towel and runs downstairs.
When she opens the door, there stands Bob, the next-door neighbour.
Before she says a word, Bob says, 'I'll give you $800 to drop that towel.'
After thinking for a moment, the woman drops her towel and she stands
naked in front of Bob, after a few seconds, Bob hands her $800 and
leaves.
The woman wraps back up in the towel and goes back upstairs.
When she gets to the bathroom, her husband asks, 'Who was that?'
'It was Bob the next door neighbour,' she replies.
'Great,' the husband says, 'did he say anything about the $800 he owes me?'
Moral of the story:
If you share critical information pertaining to credit and risk with
your shareholders in time, you may be in a position to prevent
avoidable exposure. | 
