MONEY

Stop Bargaining and Start Negotiating

A good negotiator knows how to get the bargainer off his or her script.
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For me, the term “bargaining” conjures up a chaotic, aromatic scene in one of Taiwan’s night markets, where haggling over the price of pineapples, slippers, or just about anything else is a national sport.

When I first arrived in Taiwan, I couldn’t really participate, much to the disappointment of the vendors. Once I learned my numbers and a few other key words, though, the vendors really lit up. As an American, it felt awkward, but I slowly got used to it.

More recently, I attended a seminar on negotiation led by management consultant Jack Kaine. He wasn’t talking about pineapples, of course. He focused on negotiation for entrepreneurs, making a big distinction between bargaining and negotiation. I was caught off guard and drawn in at the same time. Aren’t bargaining and negotiation the same thing?

Not at all. And not just because I’m selling product development services rather than chicken feet.

Something about this distinction really sank in for me, and I found myself using it almost immediately without realizing it.

The distinction goes like this: 

Bargaining is about focusing on who is right. It is competitive and win-lose. 

Negotiation is about focusing on what is right. It is cooperative and win-win.

To truly engage in a negotiation, you must have trust and openness between the parties. Otherwise, it is impossible to find the common win-win.

When I found myself in a conversation with a bargainer who was trying to nickel-and-dime some services that had been requested by his more win-win-minded colleagues, I went off-script and asked what he really needed. I agreed with him that I was asking for a lot of money, and asked him what he wanted me to eliminate from the scope of work. After all, scope and pricing are judgment calls, and I was merely trying to provide him with a good outcome.

That stopped the bargaining in its tracks. Who wants to be the person in their organization responsible for a sub-par outcome?

Negotiation often requires creativity to ask the right clarifying questions and figure out what is truly of value to the other party. It may not be what you think until you ask.

To stay on a negotiation script and get off the narrow-minded bargainer’s script, focus on these three things:

Education. Questions, questions, questions. Learn what is truly important to the other person. Creatively push on the boundaries to explore what may not be obvious at first. This will enable you to address value in the deal and get away from focusing solely on numbers.

Expand the pie. Instead of subtracting things, figure out what you can add to get to a win-win. If you ask enough questions, you’ll know how to add extras that may not even cost you much, but may be of huge value to the other person. Perhaps they are totally off the main topic of the deal, but who cares if it gets you to a place where everybody wins? 

Make it personal.  Yes, you may be doing a deal with a behemoth, but you are negotiating with people who have their own issues, problems, and agendas within the behemoth. Don’t lose sight of the people! Find out what they need in the deal to make the most effective use of your time together. Build trust. Never back them into a corner.

Bargaining in the night market was good training. I remember all the antics my friends engaged in, like stomping out of the stall and having the vendor chase you down the alley lowering the price, only to return and continue the game. It was passive-aggressive drama at its best, but kind of fun if you didn’t take it too seriously. Of course, when the only thing at stake is a pineapple, it’s a little easier to play hardball than when you are desperate to get a new contract for your company.

Still, the best way to learn to negotiate well is to do it. And in the best negotiations, everyone walks away feeling like they got a good deal-;making them more likely to come back and do business another day. 

IMAGE: Flickr/lessmore2
Last updated: Mar 13, 2013

LAURA SMOLIAR | CEO, Peppertree Engineering

Technology expert. Global entrepreneur. Mentor. Laura Smoliar, with over 15 years professional experience and a Ph.D. in physical chemistry, specializes in the commercialization of technology.




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