Michael Schatzki - Negotiating with Winning Words: Dialogue and Skills to Help You Come Out Ahead in Any Business Negotiation

Negotiating with Winning Words

Negotiating with Winning Words

Dialogue and Skills to Help You Come Out Ahead in Any Business Negotiation

Michael Schatzki

Negotiating with Winning Words: Dialogue and Skills to Help You Come Out Ahead in Any Business Negotiation

Copyright Business Expert Press, LLC, 2018.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any meanselectronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher.

First published in 2018 by

Business Expert Press, LLC

222 East 46th Street, New York, NY 10017

www.businessexpertpress.com

ISBN-13: 978-1-94784-309-7 (paperback)

ISBN-13: 978-1-94784-310-3 (e-book)

Business Expert Press Human Resource Management and Organizational Behavior Collection

Collection ISSN: 1946-5637 (print)

Collection ISSN: 1946-5645 (electronic)

Cover and interior design by Exeter Premedia Services Private Ltd., Chennai, India

First edition: 2018

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

Abstract

You are about to go into an important negotiation. You have done your homework and you have a plan and a strategy. But now you are face to face with the other person. What should you say, when should you say it, how should you say it? That is what this book is all about.

What do you say to gather the information you need, set expectations, build relationships, and create a win-win situation? How do you actually use negotiating tactics and strategies in a whole verity of situations? What should you say to close and wrap up the deal?

This book will guide you through the entire negotiating process and make sure that you have the right words at your fingertips for any negotiating situation that you encounter.

The book also includes a complete walk you through for some key business negotiations, including a sales negotiation, a purchasing negotiation, and even how to negotiate salary and benefits for a new job.

It is all here. A complete overview of the negotiation process and scripts you can use and modify to fit any situation.

Keywords

agreement, buyer, concessions, core concept, expertise, information, least acceptable settlement, manager, maximum supportable position, negotiation, perception, possibility, principle, probing, probing, problem solving, purchasing, sales, settlement range, tactics, win-win

Contents

What Is Really Going on Behind the Scenes

Introduction

Negotiations will always involve a certain amount of smoke and mirrors. People bluff. Things can happen quickly. You need to think on your feet. They use a tactic. You counter it. You respond with your own tactic to move in a different direction. And so it goes. And yes, you need to be really good at recognizing, using, and countering all those tactics and strategies.

But, there is something else that you must know. You must also learn to read what is going on under the surface. You need to get behind the smoke and mirrors and get a picture of what is going on behind the scenes. The Core Concepts that will give you that picture are the Settlement Range and the Negotiation Cycle.

The first Core Concept is the Settlement Range. The Settlement Range provides us with a critical visual picture of what is going on behind the scenes in a negotiation. Here is how it works.

Imagine a negotiation between a salesperson for a software company and a buyer. The buyer needs to purchase 11 licenses for this type of software. The salesperson has told him that the price for 11 licenses will be $500 each. Unbeknownst to the buyer, however, the salesperson is actually authorized to go as low as $400 per license in order to make this sale.

Lets paint a picture of what we know about the salespersons negotiating position. We can do this by creating a range of all the possible agreements that the salesperson could make. Her opening offer is $500 per license and her absolute bottom line is $400 per license. If she cant get the buyer to agree to at least $400, then she will walk away from this sale. Thus, she can make the sale at any price from $500 to $400. This is her Settlement Range. We call the opening offer the Maximum Supportable Position or MSP and the absolute bottom line the Least Acceptable Settlement or LAS.

Now lets look at the buyers Settlement Range. He has been around the block a few times and he knows that there are often substantial discounts available for software. So he tells the salesperson that although his company really likes her software, the home-grown workarounds that they are using right now are adequate to do the job, although not as convenient. Therefore, although he would really like to purchase the software from her, he needs her to reduce her price to at least $350 per license. That is his Maximum Supportable Position (MSP). (Notice that for the buyer the MSP is the low dollar amount offered whereas for the seller the MSP is the high dollar amount offered.)

However, unbeknownst to the seller, the buyer has a budget of $5,000 for this software. The department that will be using the software has told him that under no circumstances can they go above $5,000 and that if the software costs more than that, they will continue to make do with what they have. The amount of $5,000 divided by 11 licenses is just over $450 per license. Therefore the buyers LAS, that is the absolute most that the buyer would be willing to spend, is $450 per license.

Figure 1.1 The settlement range

NOTE: Often people will use the term bottom line to indicate the point that is the last stop on their Settlement Range. That works okay for the seller since the sellers bottom line is the lowest dollar amount they would accept in a price negotiation. However, when we are talking about the buyer we run into a tongue twister. Thus, the buyers bottom line is the most they would be willing to pay. Using the term LAS gets us out of the semantic problem. Furthermore, using the term LAS lets us use a single, universal term to apply to any negotiators worst case position for any issue that might be negotiated such as delivery, lead times, length of warranty, payment terms, royalty rates, and so on.

These two settlement ranges are shown in . It provides us with a visual image of what is actually going on in the minds of the two negotiators.

Now lets take a look at the two ends of the range, the MSP and the LAS.

The Least Acceptable Settlement

The Least Acceptable Settlement, and more specifically the other partys Least Acceptable Settlement, is the central focus of any negotiation.

Why? Because the other partys LAS is the absolute best deal you can achieve. For that reason, we need to spend a few minutes examining where the LAS comes from, so that later on we will be able to develop a road map that will allow us uncover the other persons LAS.

The first step is to start looking at how the other party builds their LAS. If we can determine how the LAS is built, then by looking for and finding those building blocks, we can work backward and make an educated guess as to where their LAS is located.