Negotiating - Do Not Agree Too Quickly
October 8th, 2009 |
No matter how attractive an offer may be, my advice to you is “do not agree too quickly.” If you do, the other party probably will feel dissatisfied after they have had time to reflect back on the outcome. Even though you have reached agreement, they probably will feel as though they left something on the table. To reinforce this point, following is one role play exercise that I have used in the past to help prepare my team.
The scenario is as follows. An individual has a very clean. low mileage, imported, classic sports car for sale. That individual has enjoyed the car for many years, but now finds themselves, like many people, in a position where they need money more than the car. As a result, the car is sitting in front of their home with a sign in the windshield that states “FOR SALE BY OWNER $17,500.”
The role play is set up to divide the group into two parts. Each part of the group is then divided into two person teams comprised of a buyer and a seller. Different challenges are provided to each of the two groups, and the roles are spelled out for each of the buyers and sellers very definitively as follows:
1. The challenge to the first group of sellers is to negotiate the highest possible price for your car. The challenge to the buyers in this group is to purchase the car at the lowest possible price. This challenge establishes the parameters for free wheeling negotiations.
2. The second group of sellers is told to accept the first offer made by the potential buyer, irrespective of the price. The buyers in this group are told to offer the exact price shown on the sign in the windshield. Under these parameters, there should be no negotiating between the parties.
When asked about their experience, almost all of the buyers and sellers in the first group admitted that they had enjoyed the process of negotiating. Typically, they were excited, and wanted to talk about the process itself as well as the ultimate price they paid, or received, for the car. In contrast, while the people in the second group completed the transaction quickly, they admitted that they did not have much fun. In fact, all of the sellers believed that they could have gotten more for the car, while at the same time, all of the buyers felt as though they had overpaid for the car.
Try it for yourself next time you have a group together and see if your conclusion falls in line with mine — that the process of negotiation is more satisfying if there is some give and take between the parties.
Lesson learned: Do not agree to something too quickly or the other party could feel as though they “left something on the table.”
Mr. Newman has roughly 40 years of industry experience - 28 years as part of the Ford Motor Company management team, and more recently, as President and COO of the Strategic Alliances Consulting Group. His business background encompasses a broad spectrum of disciplines including purchasing, finance, product planning, export planning, business planning and international business development.
During his last 10 years at Ford Motor Company, Mr. Newman successfully negotiated 46 licensing agreements in 12 countries, 9 joint ventures in 4 countries, 6 acquisitions and 2 divestitures. As President and COO of Strategic Alliances, he continued to assist clients with their acquisition and divestiture efforts. He also developed a strategic and business planning process which was implemented successfully at many automotive supplier operations in North America and in Europe, at a charitable organization and at several small entrepreneurial business enterprises.
To read more about Mr. Newman’s business insights on business alliances, negotiation and other must have business tips, read his Book, Beyond the Chicken Dance (http://www.beyondthechickendance.com)
Useful Links:
Do away with your overdrafts with a clever online budgeting tool.
