During negotiations, participants function under a set of assumptions. These assumptions are around the participants, what they want, the position of the other party, and how the scenario will likely play out. A costly mistake often made is assuming that both parties want the exact same thing. This is almost never the case. Remember, positional bargaining means someone wins and someone loses. Win/win negotiation happens when both parties end up getting what they really want.
Our individual unique perspectives means that what one person wants will almost always not be what the other person wants. Both parties may be right based on perspective. Understanding this diffuses conflict in negotiations. The most common assumption is assuming that price is the most important thing to both sides of the negotiation. Win/win negotiation can happen in everyday interactions.
Let’s look at an example of a common scenario; stopping at a yard sale. We have two perspectives; the buyer and the seller.
Seller’s position in order of importance:
Buyer’s position in order of importance:
Notice price is at the bottom of the list for both parties. This is a prime target for a win/win negotiation.
The buyer notices the tool for sale in the driveway and casually asks the seller, “How much?” In positional bargaining, the seller recognizes that there is a demand for the item which magically now has more value to him. He starts to wonder if he should sell it at all since it is in good shape and he paid a lot of money for it when it was new. The seller needs the item but does not want to pay a lot for it.
This scenario turns into haggling over price. The buyer decides it is not worth his time to haggle over an item he believes is not worth it because it is a used item. He loses out on a tool he needs at a good price. The seller’s ego prevents him from letting go of an item and misses out on cash to help pay for his move.
If this had been handled as a win/win negotiation, the buyer and seller would have spent more time upfront talking about the item. Below are some possible comments and questions from the buyer and seller that could have changed the direction of the negotiations:
Buyer: This is a nice tool. Why are you getting rid of it? Where are you moving to? Are you retiring? This tool is $100 new. Were you able to use it? What kind of things did you build with it? Can I see it? Do you have more tools? Are you a woodworker?
Seller: Are you a woodworker? Do you do a lot of projects? Is this for your home or for a business? What are you working on now? Do you need other tools? I have an assortment in here. Would you like to see the other tools for sale?
Once the two men start discussing what they really want, the true value of the tool changes. The seller may even say to the buyer, “Listen, I am just trying to sell some of the things I don’t use anymore. I need some cash to help with my move. I can see you want this tool. Why don’t you make what you think is a reasonable offer and we will call it good.” He moves his inventory, he does not have to throw out his stuff, and he gets cash for his move (probably more than what he would have received if he had haggled).
The buyer may say, “I see you have a lot of great tools I can use. It would save me a lot of money if I could get them from you and not have to buy everything new. The tools are in good shape. Why don’t I give you half of what they are worth new and we will call it good.” The buyer gets his tool, recognizes the item is of acceptable quality, and gets what he needs at half the cost. He also feels good because he has helped out the man selling the tools and possibly made a friend in the process.
Likewise, the seller feels he has helped the buyer get a good deal, and he knows his tools, which he used and loved at one time, will be used for a good purpose. The two men made a connection and both walked away feeling like they had both received the better end of the deal without taking advantage of the other person.
Negotiations can be uncomfortable and awkward but they do not have to be combative. Spending time learning more about the other party will give you insight into what they really want. This knowledge allows parties to both get what they want without haggling over the least important item of priority.
Our next blog will uncover the third and final fundamental rule of creating a win/win negotiation scenario, according to Roger Dawson, Author of “The Secrets of Power Negotiating”. Learning these rules can save you time, energy, and money.
Stay tuned for the final blog on negotiations. To read the first blog in the series, click here.
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