Interests, Not Positions
When a buyer makes a demand, find the need behind it, then look for options that meet that need without simply cutting your price.
A meta-analysis of negotiation studies found that a problem-solving approach leads to better joint agreements, though most of that research uses lab negotiations, not real sales.
Why it works
Lower the fee is a position. Behind it may be I need to justify this to my MD, or cash is tight this quarter. Each interest has a different, often cheaper, solution.
How to do it
- When they state a demand, ask what it would help them achieve.
- Write down the interest behind each demand.
- Create several options before deciding on any.
- Offer options such as stage payments, a longer replacement period or a volume rate.
- Let them choose.
What to say
Help me understand: what would a lower fee help you with?
Is it the total amount, or when it has to be paid?
Could we look at a few ways to do this before deciding?
Avoid
Arguing over the number back and forth. It turns partners into opponents and someone has to lose face.
Example
A Nagpur agri-input firm asked Rajiv to drop his fee from 10% to 7%. When he asked why, the HR head said the finance team would not approve one large payment. Rajiv kept 10% but split it into two payments, and the deal closed.
Practise it
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