Don't Negotiate Like Willy Loman

Two Extremes Professionals Take When Negotiating
When I watch professionals negotiate with a client, they either give everything away--that is--they try to give everything the client wants--or they fight the client every step of the way because they "don't want to be taken advantage of." These two extremes  appear as acquiescence and hostage taking.

These two positions are on opposite sides of the spectrum, and appear to look like they have nothing in common. This, however, is not true. The thing these two positions have in common is that professionals who negotiate in this manner are not as strong as they could be when entering the negotiation. What I mean by this is these professionals have not thought through what their client needs and wants and have not tied these back to why the client needs and wants these things. This is the start to establishing your value.

Extreme Position 1: Capitulating is Not a Strategy for Client Satisfaction
What you have in these two positions is, on one side you have acquiescence. The professional acquiesces, he or she gives in, capitulates, by operating from a fear-based mentality in order to "win" the business. This give in approach is a weak position because the professional wants to "get it over"--he or she doesn't like the "game." And that's all a negotiation is--a game.

The other part of the fear-based mentality that runs through these professionals' minds is, "If I negotiate, the client will get angry with me, and perhaps not like me, and perhaps look for another provider of services and solutions."

I get it though, to some of us it feels like a matter of life and death. This is the underlying fear-based thought process. And that frankly, is where the trouble starts for the professional and the firm. When you feel you have everything to lose, you do.

One thing to realize that will help you change your need to capitulate is this: Clients'--all of them--never want to deal with "needy" people--or needy firms. To clients "needy" equals desperate. Desperate equals going out of business. Going out of business means no one else is buying what the professional has to offer. And if no one else is buying, why should I be the only one, thinks the client. Unless the firm is selling pencils--and since this is a commodity--the client doesn't mind getting a commodity that works, a commodity that won't jeopardize the client's business, at a bargain, if not a steal.

Understand Your Value: Stop Acting as if You are a Commodity 
If what you provide does offer value and isn't a commodity, like a set of pencils, as a professional you had better come into the negotiation understanding that the client needs you and your services. But only understanding isn't enough. You need to understand why the client needs you and your services.

This is not arrogance--this is confidence. This kind of confidence is based on competence. Confidence based on anything other than competence is lacking in character; it's a sham. People smell shams. This is one place you cannot "fake it until you make it."

Extreme Position 2: Hostage Taking
Way over on the opposite side of the spectrum is the "offensive player." This person takes a tough stand--this person is "hostage taking." They are ready to not concede anything. They take an all or nothing position. They act as if they are ready to walk away.

In reality, professionals with this attitude are usually hiding their fears, and the offensive stance these professionals take, is really a defensive stance. Instead of giving anything away, these professionals think they are going to be "screwed." These defensive professionals cloak themselves in a shroud of offensive behaviors that sound tough. They say things like, "Why do they want this? They are asking for too much. No! Tell them, no."

Often these are the people who are sitting in corporate offices or are not on the frontline doing the negotiating. I've seen this scene play out a million times. Alright, not a million times, but a lot. It's sad, if not outright comical, because the person from headquarters who is acting tough, refuses to give in to anything the client wants, is not in front of the client, uses this approach to "coach" the local team who is actually doing the negotiating. The person at headquarters is "coaching" the local team to be "tough." This person is taking a "hard line" and is telling the local team, "They either want us or they don't--we should walk away" all in the name of a point or two in margin.

By the way, I am not decrying points of margin. I like margin as much as the next P&L manager does.

Sooner or later, someone on the local team realizes he is negotiating with two sets of people: headquarters and the client. He realizes that he is caught in a bind. The local team cannot win with the client or the "tough people" at headquarters. The local team is caught in the middle--"the damned if you do and damned if you don't" position.

The local person who is smart, says to the person at headquarters, "Can you come here and help us?" Of course, the person on the other side of the planet says absolutely--as this person has a chance to come in and show everyone how negotiating is done. When the person comes to "save the day" and meet with the client, this savior sits in front of the client and capitulates everything away. The savior now sees the light of day. They too, don't want to lose the client's business. This is crazy--and if you have been in business long enough--you recognize this as a true pattern.

In any negotiation, you have to do some ground work. Here are seven key points to any effective negotiation.

1. Key to Any Negotiation: Understand What the Other Party Wants and Why
What happens in both cases is the professionals involved don't take the initial step in understanding what is of value and establishing the value with the client. These professionals don't try to see things from the client's point of view, and then sell (persuade, cajole, coax whatever word suites you) the client on why this (what the client wants that cannot be given) hurts the client, hurts the professional's ability to deliver, and how "it" (what the client wants in the manner the client wants it) hurts the client, the client's objective, and ultimately the client-professional relationship.

2. It's All About Value
So establishing value is first step to effective negotiating. Understanding what the client wants and why is critical to successful discussions. Being able to explain to the client the ramification of why something can't be done a certain way is another critical step. But it's hard to this confidently, without having established the first step. This doesn't mean taking a hard line. In fact just the opposite. You as a skilled negotiator has to be able to finesse not giving the client something that damages you and your firm and your firm's ability to deliver, and find a gray corner, where no one is looking and be able to say, this might give you what you are looking for. This presupposes you understand why the client wants this certain thing.

3. Find Alternatives, Have Options, Offer Solutions
By finding alternative solutions to getting the client what the client asked for may be the next most important thing you can do. It demonstrates your ability to find a solution--and be creative--and most importantly--if you are dealing with the person responsible for the project--create a relationship based on value, competence, confidence and mutual goals. Remember I said, no client wants to deal with a professional or a firm that is desperate? The opposite is also true: clients--all of them--want to work with professionals who are collaborative in nature--looking out for the clients' interests and be willing to say no and here is why, but here is a way, a better way, to get you what you need.

4. Clients Have Enough Friends--They Need Strong Partners
I am telling you that if you get this--this one little point--everyone who says "The client likes me" will no longer ever have to say that. Because "liking" is weak. Good people find something to like in almost everyone. However, being able to know (not have to say to others) that you add value to the client and the client respects your opinion and advice, is way more valuable.

Providers of services need to be a partner of clients in the solution of the client's problem or fulfilling their needs. This ties back to your value. What is your value? Not from your perspective, but the client's perspective.

5. Don't Sell Yellow Lead Pencils
Remember this point because it's a big one, No Value. No Negotiation. No Deal. If you have't established value, or are not on a firm foundation. You are a commodity and the client will take you to the cleaners. If your client thinks you are selling yellow lead pencils, your client is going to seek the lowest price. Fast shipping and quality service won't even be a part of the negotiation equation.

6. Don't Be a Willy Loman
Professionals get caught up in this likability game. Sure, don't be a jerk. As one client I interviewed for my book Clientize said, "Be authentic. Unless you are a jerk. Then be someone else." No one wants to do business who are jerks. But likability isn't value. Your likability is nice--but if you think that matters, print up a new business card that states you are working for Willy Loman.

And if you are working for Willy Loman, you are basically a dinosaur and all dinosaurs are extinct. Except no one will care and no one will find you in the Museum of Natural History, because there are too many of you. You're not that rare a find.

7. See Negotiating as a Game of Strategy
Of course, when negotiating you have to think things through--it's like a big game of chess. And that's all negotiating is--a big game. If you can start there--seeing negotiating as a game and preparing for the game, and not see this negotiation as a matter of life and death, you are coming in from a position of strength not weakness. I said preparation and this means you have to establish value based on confidence that is rooted in competence. Never forget this--so be competent, and if you are, you are going to be much better off in the long run.

This is the foundation of negotiations--any and all.

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