Close the deal

Negotiation is a trading process. Look out for the opportunity to close the deal and it could make a significant difference to any concessions you make.

It is as if it was yesterday and I can see their faces yet - stern, unbending, implacable. The setting was innocuous enough - a small meeting room in the hotel for which I was Sales Director. On one side of the table, I sat with the General Manager and on the other were two senior managers of a large computer company whose main European plant was situated twenty miles down the road.

"Free wine for the top table," he asked. "It's not a lot to ask given the size of the conference," and in truth, he was right. 50 delegates; five nights over a winter weekend, when otherwise the hotel would be empty; good spend over the bars from a team of salespeople intent on renewing old acquaintances and having a good time - this was an important piece of business for a city centre hotel that had difficulty filling its bedrooms over a weekend, so we were keen to win it.

But I do remember at the time thinking that it was a bizarre question to be asking. It seemed to me that we still had lots to talk about, and there were key issues yet to be agreed. Quick as a flash though, I replied that free wine would be fine. This was an important gesture to my way of thinking; I was keen to win the customer over and here was a carrot that would improve our relationship and enable us to show willing. "Not a problem," I continued, thinking to myself that we could well afford four bottles of house white and four of house red.

The meeting continued and further discounts on the conference rate were agreed before the next, seemingly silly question was asked. This time, they wondered whether we could arrange for two complimentary room upgrades. Each of them wanted a private sitting room, so that they could do some entertaining. Further, they suggested that we stock the two rooms with drinks "at off-sale prices" instead of the hotel rates. Before a breath could be taken, my colleague agreed to both. I could see from where he was coming - both of these concessions were relatively cheap for us to concede and again, they demonstrated our willingness to be flexible and keenness to win the deal.

The meeting continued; more requests for small favours from them and more concessions from us. Eventually the deal was done and we toasted each other's health (this was the 1980's after all!) with a couple of large gins and tonic. All was well with our world and all was well with theirs - well - so we thought. It turned out that there were another couple of issues that we needed to clear up (in their direction, not ours!), but once those were done and dusted, the conference went ahead.

And then came the gala dinner - well, the morning after to be exact. At the morning meeting, the general manager and I were accosted by the food and beverage manager. "What was with the cases of Chablis and Chateauneuf du Pape?" My colleague and I looked at each other. "He told me," continued the food and beverage manager, by this time in the full flow of a righteous and growing indignation, "that you had offered a case of Chablis and a case of Chateauneuf du Pape for the gala dinner!" To be fair, we never had, but nor had we confirmed exactly what it was that we had offered, so again we chose not to ruffle the feathers of the organiser at the end of a profitable conference and let it slip through unchallenged.

All of this had slipped my mind until I arrived on a Scotwork Advancing Negotiation Skills course and listened to the tutor talk about closing the deal and agreeing things before the end of the negotiation. Gradually it all came back to me.

I remembered being surprised by the strange question about the free wine when we still had items to discuss. I now recognise that the most common closing opportunity that you will ever get is when the other side start asking about details. Your response to those kinds of questions should test whether the rest of the deal on the table is acceptable, assuming you make that final concession. If you fail to spot what's happening, the negotiation can continue - as happened - and you can end up making further unnecessary concessions later in the game.

The room upgrade was another missed closing opportunity but in addition, we failed to value the concession (which cost us nothing) in their terms. Perhaps we could have gone to our wish list and exchanged early staged payments or a letter of referral in return for the concession (as well, obviously as the close).

Our failure to confirm the exact details of the concessions made on the gala dinner wine resulted in our taking another hit to the bottom line; the moral of that particular tale is always to ensure that you agree what you have agreed and confirm the agreement. We did not have email in those days; think about sending them a quick summary of the deal by email - it makes "deal creep" less likely.

Negotiators ignore the final stages of a negotiation at their peril. Late and sometimes expensive concessions go straight to the bottom line and will have an adverse effect on the profitability of your final agreement.

Robin Copland – Scotwork International

Don’t confuse negotiating with persuasion!

I was recently invited to teach at a company that purchases the debts of financial institutions and then pursues the people that owe the money.  This company buys the debts through a tender process and they then present the debtors with the facts about the law and the unpleasant consequences of non-payment. 

They called Scotwork because they wanted to improve their negotiations with debtors. They said that they were talking to a number of companies who had issued quotations to them for negotiation training. 

I told them as politely as possible that they were wasting their money.

For negotiation to take place a relationship needs to exist between the parties.  Based upon the parties’ understanding of one another, a negotiation involves a trading process. 

“To Persuade” in my dictionary is described as a verb.  It probably shouldn’t be.  Persuasion is just an outcome.  It is the consequence of objective targeted information sharing.  To be “persuasive” we need to have the ability to present information free from our personal opinion.  What we call “fact-based.” The reality is, that as soon as you have to say “according to me” or “I believe” then your argument just got a little weaker.  Most participants depend largely upon persuasion during the first live case plays of the Scotwork Course.  Often we ask their management whether in their working environment they have sufficient objective data provided by the business to best present the case for the business.  This question often provokes the business to adopt a new approach.

The vast majority of us in our working lives have regular encounters with conflict in internal and external discussions where we have a relationship with the other party, commercial or personal.  I think a little difference of opinion is healthy.  Let’s face it, resistance to your ideas is a lot easier to deal with than indifference.

So if you know what the other party wants, then after you’ve tried persuasion and failed (you almost always will) then give them what they want on your terms.  Find some things that are relatively important to you and relatively easy for the other side to give.  In Scotwork we call this the wish list.  Of course, if a wish list is prepared before the meeting discussions are easier and trading comes naturally. 

Almost everybody in every situation where a conflict arises in relationship can negotiate, but people instinctively prefer persuasion.  They prefer persuasion because the envisaged successful outcome will involve no cost to them. For that reason persuasion takes on an enormous importance out of balance with the reality. 

The prospect of success through persuasion depends on having most of the power on your side of the table, where you have something the other party desperately wants, or like the business I referred to above, if you hold in your hand a threat that they are desperate to avoid.   If you hold all the power you don’t need to negotiate, you just need to bring the power to the agenda.  The other party will probably be persuaded.

We teach people to trade when they find themselves in conflict and by the end of the first day of the course, persuasion looks like a very poor alternative to negotiation.

Mike Freedman – Scotwork Turkey

To Type, or Not to Type… The Pitfalls of Negotiating by Email

In 1978, US President Jimmy Carter brokered the first peace agreement between Egypt and a free Jewish nation in over 2,000 years. If email had been widely available, do you think he could have used it to save everyone 13 days at Camp David?

Many clients ask me whether they should negotiate by email, expecting me to say no. My answer is always the same – “Absolutely. Sometimes.” Here are some trade-offs to consider before you press SEND.

We all know that an in-person meeting provides the best opportunity for nuanced conversation. Body language and tone are important when exploring power balance, signals (areas of flexibility) and packaging issues. “Being there” gives you the maximum opportunity to explore the other side’s answers with follow-up questions, to watch their response to your proposals, and to gauge the “vibe” or temperature of the meeting.
For important deals, I like to assess the potential cost of a single missed signal (“We need a discount ofabout8%”) versus the expense and time of travel. In a large commercial contract, the ability to save 1%, add a new variable, or repackage a deal based on a subtle signal might make the cost of flights rather insignificant.

But it would be impractical in today’s busy market to recommend that every negotiation be held in person. Phone (and increasingly, video-conferencing) is perfectly suitable for many meetings. If you’re negotiating in teams, one advantage of phone (apart from avoiding cancelled flights and bad airline food) is the ability to swap instant messages with your colleagues as the meeting unfolds. This can be extremely useful to share signals of flexibility, or advice on strategy – just try to be an adviser rather than a critic.

The major downside of phone and video-conferencing is a loss of rapport. Trust and personal connection can be critical to difficult negotiations, and you’d be wise to consider the value of opening the meeting with a firm handshake and a personal exchange, rather than your hilarious “Crazy Frog” or “Sir Mix-a-Lot” ringtone.
Most people are more guarded, and hence closed with information, when communicating remotely than sitting down over a coffee. In my experience, the poorer the relationship you have with the other side, the more of an issue this becomes; lean towards meeting in person when establishing (or fixing) important relationships.

It’s a very big step down to email, with a dramatic loss of nuance. I’m not going to tell you not to use it – it’s quick, reliable and the method we now adopt for 90% of our business communication. It can also be a perfectly good method to send a written proposal. But it should never be used to build initial rapport, to explore needs and priorities, or to seek the other side’s response to your proposal – where a live conversation with follow-up questions is critical. Just make sure to give them a reason to take your call – (a topic for another day).

Remember - when choosing your communication method, it’s all about trade-offs. If in doubt, ask yourself what Jimmy Carter would do.
Simon Letchford - Scotwork, USA/Australia

Green Lights

A few years ago I was talking to a guy at a dinner party and he, in the effort to engage in small talk, asked me what I did for a living.

When I told him that I trained and consulted in the area of negotiation skills he was intrigued but also fairly dismissive.

His view was that he never negotiated. He always got his own way by simply making an ultimatum. His view was that agreeing to negotiate was a sign of weakness and that when dealing with his suppliers he simply told them what they had to do and they did it, or he went elsewhere.

I asked how that worked out for him.

He said fine. He was convinced that he always got the best deal possible.

This morning I heard the story of a man who worked as a traffic light controller in central London. What a job!

His wife was very heavily pregnant with his first child and went into labour. She seemed to be progressing rather too quickly for his liking, and nervous (first child after all), he decided to call for an ambulance.

The 999 operator said that there would be at least a 30 minute delay due to abnormal workloads and suggested he take his wife to hospital if it was safe to do so.

He took the advice and before departing he quickly called a mate at the office and told him of the route to hospital and asked for a ‘Green Wave’, essentially that the lights be turned to green as he approached to speed his route. He would keep his chum updated of his progress via the hands free phone in his car.

Now I did not know such a thing existed. But of course this is how visiting dignitaries, royalty or leading politicians are ushered to their destinations. Would not look too good to stop at the lights and glance over to see the Queen I suppose.

Now of course if you are used to the Green Wave in your negotiations and you are waved through at speed, good for you.

God forbid however if there is a block and you have then to find a new route. If you’ve never had to manage push back or deadlock when you arrive there it will be a total shock.

Moreover if you’ve never experienced push back is that because you have not been challenging enough. Have you left a better deal on the table?

I was about to ask him these questions when his wife shouted over from across the room that he ought to put his drink down as he was driving home. She intended to have a couple of glasses of wine that night.

Not sure that any of us always get 100% of what we want 100% of the time.

by Alan Smith, Scotwork UK