One of the key techniques negotiators use to win deals, is to increase value. In Good for You, Great for Me, Lawrence Susskind, a cofounder of the program on Negotiation at Harvard Law School and professor at MIT, offers four key value-creation moves, worth remembering:
- Prepare to create value. Don’t assume all the issues to discuss are the ones on the initial agenda. Think “outside the agenda” as to what else might work. For instance, imagine you’re trying to sell a software package. To encourage the buyer to commit, you have a second, long-term offer (3 years at a 25% discount) to offer.
- Explore interests and add issues. Imagine the customer rejects the original offer, noting a competitor has already offered a 3 year contract with a 33% discount. Unless you want to continue dropping prices until it’s not profitable to do the deal, you need to think about other interest. For instance, if the competitor is only able to serve this one product need, and you can serve several other needs for the customer, possibly offering a10% discount across the many products you sell the customer may actually be more valuable!
- Play the What–If Game. Rather than make specific offers, posing contingent options that enable each side to gain allows you to move closer to the “win-win” goal everyone likes to have, but gives you the ability to gain for every concession. (temember, avoid making concessions without getting something in return!)
- Bring new parties to the table. What do you do when there is little or no trust between the negotiating parties? Consider expanding the table by inviting intermediaries who are trusted by both slides; these can be mutually know parties (e.g., a banker) or professionals (e.g., mediators).
Have you ever used these techniques? What’s your experience? Are there others you would recommend? Share with us!