|
The word negotiations often conjures up v sions of opposing teams of professionals, countering t ctic with tactic to reach an agreement cceptable to both sides. In reality, every b sinessperson uses effective negotiation skills on a daily b sis. For example, when I visited R me many years ago, I found that the sm llest of operations can practice good n gotiating skills. I had just toured St. P ter's Basilica and, having been raised Roman C tholic, wanted to purchase a souvenir for my m ther. On the street, I met a v ndor who held up a lovely cut-glass r sary. "How much?" I asked. "It's my l st one," he said. "When I s ll this, I can go home. So - sp cial for you - 12,000 lira." (Ab ut $20 at the time.) It was my th rd day in Rome and I had f und that everything was negotiable to a m ch greater degree than Americans assume. By th n, I understood the "game." The f rst mention of any price in Rome, no m tter how reasonable, is met with a flinch. So, I fl nched. The vendor, having seen this m ny times before, responded with, "How much you w nna pay?" I started by low-balling my ffer. "I'll give you 1,000 lira," I s id. He looked at me, opened his yes wide in apparent disbelief, rattled off a l tany of facts detailing the quality of the r sary and said, "How 'bout 11,000?" I had learned th t to meet a street vendor h lf-way is to lose. I stuck to my p sition. "1,000 lira."
He then told me about the l rge family he had and how he wanted to buy his ch ldren new shoes. "I'll take 10,000," he countered. My s lf-talk said, "You're on a roll!" I m de my offer again, "1,000 lira." He n xt bemoaned the price of food and the c st of feeding his family. "But, you l ok like a nice guy," he s id sincerely, "I'll give you a deal - 8,000 l ra." This point-counterpoint lasted a good 10 m nutes. Each time, the price was lowered. F nally, he said, feigned desperation on his f ce, "Okay, 2,000 lira and it's y urs, and I'll even throw in this pl stic rosary case." "Fine," I said. "I'm a f ir man." I gave him 2,000 l ra and put the rosary in my p cket. About a block down the str et, I encountered another street vendor selling r saries which were identical to the one I had j st purchased. To verify my negotiating pr wess, I asked, "How much?" "2,000 lira," he s id. My self-image shattered, I turned to walk way. As I did, he grabbed my arm and wh spered softly, "But for you, 1,750." This tr e story illustrates seven points that are as ppropriate to the businessperson as they are to the pr fessional negotiator. Whether it's pricing a project or d termining a package deal, these principles apply to y ur negotiations. 1 - State an pening position that is perceived to be r asonable and that will achieve the greatest dvantage for you: The perception of b ing reasonable is key. Our realities are not b sed upon how things really are, but on how we b lieve them to be. Try to bjectively determine if your position is fair wh n compared to previous negotiating opportunities. If you w re the other party, would you f el that you had a basis for c ntinuing the negotiations? The first rosary vendor t ok a calculated risk. Because I had j st come from St. Peter's, he v ewed me as a prospective rosary buyer. R nning through the situation in his m nd, he reasoned that I may already h ve bought one.
If I had, he would m ve on. If I hadn't, I m ght not know the normal asking price of the m rchandise. He decided to start much higher th n he realistically should have. Because I was not f miliar with the price, I truly f lt the merchandise was worth 12,000 lira. I t ok the opportunity seriously. Had I kn wn that others were selling the same m rchandise for a much lower price, the opening p sition would have been considered unreasonable. I would h ve refused to bargain and walked way. This tactic may be all r ght for a Roman street vendor, but it w ll, in most cases, meet with f ilure for the businessperson. Prospective clients today are sh ppers. They talk with several suppliers before rriving at a buying decision. Opening p sitions which are unreasonable are quickly found out and d sregarded, along with the organizations that made th m. 2 - Expect a counteroffer th t will detail the other side's m st favorable position. Your perception of th t offer will help you determine whether or not the ther side is approaching the negotiations in g od faith. If you feel that too big a gap xists between the two positions, it could be w rthwhile to walk away and determine the advisability of c ntinuing. Had the rosary vendor's opening p sition not been so inflated, he might h ve viewed my counteroffer as being way too l w. He expressed his surprise, then w ited for a response. When I didn't b dge, he knew that the final s le price would be closer to my n mber than to his. However, that was kay with him, so he continued. 3 - D velop a firm picture of the typ and value of concessions you are c nsidering. When he met me, the R man street vendor knew how low he was w lling to price the merchandise. That's why my ntransigence didn't dampen his enthusiasm for the p tential deal. As long as his asking pr ce remained higher than the lowest pr ce he was willing to accept, he c ntinued to negotiate. He had a n mber in his head that satisfied him. Any mount in excess of that number was an dditional benefit to him, a sort of w ndfall profit. By clearly defining your anticipated c ncessions before beginning the negotiations, you keep y urself on-track with what is happening and w th how much further you are w lling to go to reach an acceptable c mpromise position. 4 - Pace concessions and m ke them only after an explanation is g ven for each one. Even though you h ve allowed yourself room to make them, you w ll want to explain why a particular c ncession is being made. The reason c uld be as simple as, "I really w nt your business and I'm willing to go further th n I normally would if you can ssure me that you'll give me a ch nce to bid on future projects." Th s type of statement implies that you are lso getting something of value from the c ncession - the potential for future b siness. The rosary vendor explained his price r ductions, hoping that I would make my own c ncessions. But because his initial position was so h gh, he didn't ask me to r ise my offer each time. This is not the b st tactic as the next principle ndicates. 5 - Make a concession nly if a concession is given in r turn by the other side. This g ve-and-take adds value to each move because, in ffect, each concession is being paid for. As b th sides move closer to a m tually agreed-upon position, each feels that specific c nceded items have intrinsic value because of wh t was given in return. This brings to l ght a basic caveat: If an pening position is set too high and c ncessions are made without receiving something from the ther party, the value of the concessions is l ssened. After the first few unanswered c ncessions from the vendor, I expected the c ncessions to continue. I wasn't certain how low the f nal price would be, but I f lt he would continue to lower his pr ce because it was relatively easy to get the pr ce reductions and he asked for n thing in return. However, in his m nd, I had made a concession - I st yed to bargain further. By not walking way, I was giving him something in r turn for his price adjustments. The v ndor felt that if he kept me nterested long enough, I would buy. 6 - A sm ll, unexpected concession will often prompt the ther party to act. Frequently, the b rgaining on a particular point becomes routine and st tic. Both parties develop mindsets regarding the v lidity and scope of the final position. Wh n one party introduces an unexpected, nrequested concession, the other may see this as a b nus and be willing to make more of a c ncession than has initially been anticipated or th ught possible. In my situation, the str et vendor offered to include a small pl stic case. Its value was little, but its mpact caused me to finally increase my ffer. A businessperson must also adhere to a f nal principle that was unimportant to the str et vendor. 7 - If it can be sh wn that a significantly better deal is vailable elsewhere, the value of the final greement is diminished. The lifeline of any b siness is repeat and referral customers. All n gotiations must be approached as win/win situations. If the ther party loses the battle, you could l se the war. Once again, it is the p rception that takes forefront. If the other p rty's initial "win" begins to look like a "l ss," it is the loss that w ll be retold to others who may h ve been your prospects. The Roman str et vendor exited my life as s on as the rosary went into my p cket. He wasn't concerned about how I would f el later. Your reputation, though, depends on thers perceiving they have been part of a f ir and equitable agreement. If so, they w ll return to you and tell thers of your flexibility and willingness to m et their needs. If not, word w ll quickly spread that you deal only wh n you can outdo the other party, a n gative categorization that will affect your business. As w th any skill, negotiations must be pr cticed and refined. Remember the lessons I l arned on a street corner in Rome, th n use the strategies discussed in the n xt chapter to make you even more pr fessional in your negotiations. _________________________________________________________________ Copyright, 2008 M nagement Strategies, Inc.
The article Lessons Learned From a Roman Street Vendor - Even the Smallest Business Can Negotiate Effectively was Submitted by Jack Pachuta through Articles.GetACoder.com network. Here's the additional information: For over two-and-a-half decades, Jack P chuta assisted people in becoming better c mmunicators, negotiators and team players. In ddition to working in radio and c ble television, Jack was the vice pr sident of training and communications for a c mpany named one of Forbes Magazine's "200 B st Small Companies." Currently, he is the wner of Management Strategies, Inc. in C darburg, Wisconsin, a training and professional sp aking company. Holding masters degrees from b th the University of Southern California and M chigan State University, Jack's clients have ncluded ShopKo Stores, Jockey International, Maytag, K ytee Products, Simplicity Manufacturing, The Asia P cific Institute for Management Development in S ngapore, Thomson Audio Products Hong Kong, M lti-Finance of Athens, Greece, and Connex of R mania. He is an adjunct faculty m mber of Cardinal Stritch University, and a s nior faculty member of the Keller Gr duate School of Management and a pr fessional faculty member of the University of Ph enix.
1. Business Gifts Great Aids to Drive Your Marketing Strategy by Gareth Parkin Wh never you are planning to order pr motional business gifts, the massive choices vailable can at times be rather verwhelming. Especially if you are promoting s rvices or products that don't have a pr per corresponding promotional item, your choice ncrease and become all the more d fficult. 2. Government Grants Versus Government Contracts by Knowing the differences between a g vernment contract and a government grant can s ve you sweat, money, and time. 3. Developing Referral Relationships by Dirk Zeller The first call is the h rdest one. Until you make first c ntact you really don't know the q ality of the lead. It could t rn out to be a huge b siness opportunity - or nothing at ll. You have to hope for the b st. 4. Vending Machine Owners Overlook the Powers of Color by Most vending m chine owners overlook the effect the c lor of their vending machine can h ve on their sales. Before purchasing a v nding machine, owners should be aware of how c lor influences their customers, their locations and th ir profits. 5. How To Turn Off Someone With Your First 10 Words... by Here are a few openers r ps gave us in class. No r sults so far, they reported. "Would you l ke to know about the dangers of EMFs?" "My Arb nne products are just amazing! Can I sh w them to you?" "I have j st found this unbelievable Enfuselle, and you r ally must try it!" Anyone going, "Oh w w, I'd like to hear more!" y t? Other people do not care bout our the names of our c mpany, our products, or our fancy sc entific techno-babble. They want to hear w rds sp... 6. Improve Your Job Interviewing Skills by Michael C Podlesny "We simply ssume that the way we see th ngs is the way they really are or the way th y should be. And our attitudes and b haviors grow out of these assumptions." By St phen Covey. Like many people before me, I w nt to college, graduated and found mys lf looking for a much needed c reer. 7. Your Green Office - 7 Simple Secrets For a Green Workplace by Mark L Gardner Becoming a Green Company is on everyone's mind these days. Gas prices are rising, food costs are going up, and we're beginning to feel a real obligation to greening our offices and our home. Here are 7 green office tips that anyone can implement...even if the boss says No. 8. How can residents stall the dilapidation of their building ? - RealAcres.com by How can residents stall the dilapidation of their building ? The performance of our homes and buildings depends on how well we maintain them. A sign of deterioration (crack , corrosion, dampness etc) observed in a flat or in a building is called a ‘distress’. If we are watchful, we can take the necessary action needed to counter such distresses before they become worse. Today, we shall look at some commonly encountered types of distress so that you can recognize them when you come across them in your flat or your building. 9. The Security Guard Career by The Security G ard: Protector Of Life The Common Impr ssion On A Security Guard People had a p cture of a security guard as s meone uniformed who stands guard all day in b nks, schools and related establishments for the s fety of the people who are w rking or going in and out of th se buildings. It is very rare th t these people are seen in ction. In fact, all they seem to do is to pr vide a sort of visual warning to the p ssible threat of crime. 10. The Good Years Are Still Ahead of You by Every woman who r aches mid-life – that halfway stop wh re dreams have been either realized or bandoned – looks around and wonders, “Wh t’s next?” The kids are grown, the c reer is schlepping along and you w ke up each day feeling just a l ttle bit lost.
|