In sales negotiations, when you focus on the differences between your positions rather than the commonality of your interests, little progress can be made. Time and emotion are the two things most often wasted during a negotiation, states Anthony Tjan, CEO and founder of the venture capital firm Cue Ball (cueball.com), in a Harvard Business Review blog post (blogs.hbr.org).
“The mere fact of having a position lies at the root of why we get caught up in the drama of a negotiation, rather than focusing on the plotline or ending — the goal — toward which we are striving,” Tjan says. Here are three areas that can help move negotiation forward:
Understand the underlying and ancillary motivations of the other side. Tjan recalls being in negotiations where what appeared to be irrational negotiating by the other side was driven by how they were compensated for the deal. Where possible, uncover if those negotiating for the other side have any personal remuneration at stake, and how that changes with different outcomes — it will drive behavior.
Be transparent and explain the why of your points. So often it is taken for granted that the other side fully appreciates why you are asking for a term or condition when they actually have little clue. Before you can do this, you also need to make sure you fully understand your own why for each of your points.
Calculate the materiality of each point. Much of the time sink of negotiations is unfortunately spent on elements that don’t really matter — things that will not materialize, or if they do won’t have a major impact. Do the math and calculate how material a point is — then determine if it is really worth fighting for in the bigger picture.
“The goal of any negotiation is to reach agreement, but unfortunately the journey there is usually painful. We find ourselves ‘stuck’ on terms or conditions we feel are must-haves, and lose perspective as to why we want the things we think we want,” Tjan says. “The reality is that you are more likely to get a fair deal — and even get the opportunity, from time to time, to have your cake and eat it too — if you stay disciplined on the underlying architecture and rationality of each negotiation point.”
