Negotiation

Negotiation Training

Presented By:
Sarika Goel
Mosaic Services

NSEZ SDF, E-9-E10, Noida Phase 2
© Mosaic Services copyright 2011

Negotiation
You can
Negotiate
Anything


Index
What we will Cover


• Basics of Negotiation
• What is negotiation
• P/V Equation Reprised
• Types of Negotiation
• 3 Elements of negotiation
• Negotiation Concepts
• Negotiation Styles
• Why Children are good negotiators
• Negotiator Checklist


Basics of
Negotiation


• We all negotiate, all the time, at home, with family,
with friends, at office, in public.
• These negotiations can be about anything.
• Negotiation is the most effective way of resolving
conflicts and securing agreement.
• A two way discussion to agree terms.
• A process of discussion aimed
at reaching agreement.
• Establishing consensus among
two or more parties.


What is
Negotiation


Negotiation is the use
of information and It is influencing
power to affect others to get
behavior. what you want.

To negotiate is to
trade something we
have for something
we want.


P-V Equation
Reprised


Win-Win for both client and company
Win:- Customer
Loss:- Company/Sales Rep

No benefit for the company
Win:- Customer
Loss:- Company/Sales Rep

value
Customer feels cheated

price

2 Types of
Negotiation


Distributive Negotiation
• A negotiation in which the parties compete over the
distribution of the fixed some of value.
• Key Question here is, “Who will claim the most value”?
• A gain by one party is at the expense of the other.
• The sellers goal is to negotiate as high as possible and the
buyers goal is to negotiate as low as possible.
• Win-Loose or Zero sum negotiation.
• Thus, the deal is simple, no need for
creativity. Neither party is interested
in long term relationship.


Integrative Negotiation
•A negotiation in which the parties cooperate to achieve the
maximum benefits by integrating their interests into an
agreement.
•These deals are about creating value and claiming it.
•Win-Win situation.


3 Elements of
Negotiation


1 Power

If you think you
can or you cant,
you are always
right.


The other side always seems
to have more
power and authority
than you think
you have.


Power is the capacity or ability to get things done… to exercise
control over people, events, situations, oneself. As such, it isn't
good or bad. It isn't moral or immoral. It isn't ethical or unethical.
Its neutral.

Believe firmly that you have power and you will convey that self-
confident perception to others. It is you who determine how they
see, believe, and react to you.


2 Time

As long as you
get there before
its over, you’re
never late


The other side
doesn’t seem to be under
the same kind of
organizational pressure,
time constraints and
deadlines
you feel you are under.

• Time plays critical role in negotiation
• 80% of results are generally agreed upon in the last
20% of the time.
• Time/Deadline pressure weakens you/build tension.


3
Information

Some people
feel the rain,
others just get
wet.


The other side seems to
know more about
you and your needs
than you know about them
and their needs.


• More info you have, the better you will be able to
negotiate.
• Information and facts helps you to generate
alternatives, strategies and convince the other
party.
• Information about the other
party, market information,
trends, technologies.
• Published standards,
guidelines, data equip you
to put your points effectively.


Mainstream Negotiation

The Road Always Travelled
v/s
The Road Less Travelled


3 Price Side Techniques


Generating
Competition
The Hand you are dealt with:
Client regard themselves as
someone who wants to sell money.
Money is the product up for sale.
How do they get people to bid for
the money.

How to play:
Create Competition for something
you possess, i.e. knowledge and
expertise. Never enter a negotiation
without options.

© Mosaic Services copyright 2011 One

Deal
Frame/Structure
The Hand you are dealt with:
Client use ‘what if’ statements to their
advantage to which sales person
make a counter offer in client’s favor.

How to Play:
Power of Persistence; When presenting
something to the other side, if client
does not agree/or use what if
statements, don’t move on to next
offer. Be persistent to what you have
offered.

Two NSEZ SDF, E-9-E10, Noida Phase 2

How important is
that sale for you?
The hand you are dealt with:
Price Discount: Client generally
says this is the least I can afford.
Nine out of 10 times, the sales
person will offer discounts.

How to Play:
Power of Risk Taking: Risk taking
involves mixing courage with
common sense. Not to do so may
result in being out-negotiated. That
means avoid becoming
emotionally attached to a position
wherein the other party can
manipulate you with ease.

Three

5 Value Side Techniques


Value Nibbling
The client would always induce you
to invest in a situation. His initial
approach would be collaborative
as he Is hungry for help.

How to play:
Power of Investment: Make the
other person invest his time with
you. At the beginning of each
encounter, you should approach
people collaboratively. If you want
to become competitive later, but
only at the end, after the other side
has made an investment.

One NSEZ SDF, E-9-E10, Noida Phase 2

Satisfying Needs
Value Exclusion: Clients generally ask
for value exclusions like if I take the
delivery on my own, if you don’t have
to maintain it etc. Client indicates that
my needs aren't being fully met, so
your needs should not be totally
satisfied.

How to Play:
Use the Power of knowledge of Needs:
Find the real needs of the other side
which are rarely verbalized. If you can
establish a reasonable guess about
what someone’s needs are, you can
predict, with remarkably certainty,
what will happen in any interaction.

© Mosaic Services copyright 2011 Two

Documentation
Discounting: You might encounter
clients discounting your prices and
saying you are way too expensive, I
just cannot afford this, to which you
generally make a counter offer or ask
what is the best you can pay.

How to Play:
Power of legitimacy: Use the power of
legitimacy when you encounter such
situations. Printer words, documents,
signs carry authority. Back your offer
with some kind of printed documents.

Three NSEZ SDF, E-9-E10, Noida Phase 2

Expertise
You have no clue: When clients use
statements like you have no clue
about my business, have you ever
working in this industry. It is when we
come up with the sample work to
prove our metal.

How to Play:
Power of Expertise: Establish your
background and credentials early in
the confrontation. If you do, your
statements may not even be
challenged. Ever notice do we
question the statements of doctors, tax
accountants, attorneys?

© Mosaic Services copyright 2011 Four

Attitude
We are too much involved and it
gets very important for you to get
the sale, be it deadline pressure,
you tend to go with all of the above
tricks which is a big NO.

How to play:
Power of Attitude: Develop the
attitude of caring, but not caring too
much. Develop ‘it’s a game’
attitude and you will get better
results because your attitude will
convey your feeling of power and
mastery of your life.

© Mosaic Services copyright 2011 Five

Time Constraint
The hand you have dealt with:
Ultimatum: Client would give
ultimatum for take it or leave it, or if I
pay you right away, can you give me
this?

How to Play:
Don’t allow the other party to know
any absolute time constraints you
might be in.
Use time to your advantage and know
other person’s timeline


Road to be
travelled

Make it as your ScreenSaver


Create Competition for something you posses

Power Of Persistence

Power Of Risk Taking

Power Of Investment

Power of knowledge of Needs

Power of Legitimacy

Power of Expertise

Power of Attitude

Negotiation
Concepts


• BATNA (Best alternative to a negotiated Agreement): your
options if you fail to reach agreement during negotiation.

• Reservation Price: The least favorable point at which you will
accept a negotiated deal, ‘the walk away price’.

• ZOPA (Zone of Possible Agreement): The range in which a
potential deal can take place; defined by the overlap
between the parties reservation prices.

• Value creation through Trades


Why BATNA?
BATNA tells you when to accept and when to Reject
an agreement.
•When a proposal is better than your BATNA: ACCEPT IT
•When a proposal is worse than your BATNA: REJECT IT

BATNA:
•Develop “your” BATNA
•Consider “their” BATNA


ZOPA
$4500
$7000
Seller’s Walkaway position

Seller’s Settlement Range

ZOPA

Buyer’s Settlement Range

$0 $5000
Buyer’s Walkaway position

Value Creation through Trades
Trade things you value less to the other party
Examples:

•For a supplier the greater value may be not price but extended
delivery time
•For a customer, extended warranty versus price


Negotiating Styles
HIGH
Accommodate: Build friendly Collaborate: Problem solved
relationship creatively, aiming for win-win
Promote Harmony Search for common interests
Avoid differences Problem solving behavior
Give into pressure to save Recognize both party needs
relations Win win becomes the main
Concern for Relationship

Place relations above fairness Compromise: Split the purpose
difference
Meeting Halfway
Look for trade offs
Accept half way measures
Avoid: Take whatever you Aims to reduce conflict rather Defeat: Be a winner at
can get than problem solving any cost
Feeling of powerlessness Win loose competition
Indifference to the result Pressure/intimidation
Surrender Adversarial relationships
Take what the other party is Defeating others becomes the
willing to concede goal

Concern for Substance

LOW NSEZ SDF, E-9-E10, Noida Phase 2 HIGH

Reasons why
Children are such
Good Negotiators


Know exactly
what they
want
(Intention)


They are
persistent
(Attention)


No does not
mean No-
It means
maybe


Embarrasment
Is a technical
weapon not
liability NSEZ SDF, E-9-E10, Noida Phase 2

They are prepared
to trade a
concession
for another
Concession.


Super Sales Person

Desktop Saver


Negotiation Check List
Good Practice Avoid
•Don’t start with numbers •Interrupting
•Actively Listen •Attacking
•Question for clarification •Blaming
•Summarizing •Talking too much
•Test commitment •Sarcasm
•Seeking and Giving info •Threats
•Encourage Two way conversation •Taking it personally
•Express Empathy •Closed Body Language
•State and plan your proposal..then
summarize
•Use the if you..then we will principle


Negotiation
Exercise- 1


Imagine you represent a prestigious European car manufacturer at the
Motor Show. A hot prospect admires your latest model on display. It's
beautiful... he opens the door, smells the leather, slides onto the
driver's seat. Gripping the padded steering wheel, his eyes wander
over the sumptuous dashboard and the curves
of the aeronautical design as he imagines driving his new sports car.
Selling its many benefits you offer a glossy brochure, your business
card and a warm farewell, believing he will soon return.
Continuing his tour of the Motor Show he's greeted by a 50's-
something manager of a competitive brand. Knowledgeable and well-
experienced in the motor trade, the manager asks about the appeal of
other cars. "Well," says your hot prospect pointing your way, "the sports
car looks impressive.”
"Don't buy your brand!" you hear your competitor tell him. "You'll lose
tens of thousands on the re-sale price.”
You really want to sell this new car but what do you tell the customer?


Understand the changing dynamics

The competitive dealer released negative information which adversely
affected Frank's previously-favourable thinking towards the luxury new
car. And you.

Was your competitor correct?

Who knows? But your Hot Prospect, Frank, thought he was probably
right as his appearance (age, manner, clothing, direct questioning, and
blunt warning) leant credibility to this belief. Unfortunately once the
Genie is out of the bottle you can’t put it back.

The competitive dealer replaced Frank's positive thoughts about the
new car with a far more powerful negative thought – the loss of tens of
thousands of dollars.


Understand the other person’s thinking

Frank's new emotion is FEAR of future financial loss. In his current
state of mind he will not buy your prestigious new car - truth is, he won't
buy anything from you until you overcome his fear.

Here's what to do - apply Antonym Thinking

Counter his FEAR with its opposite – CONFIDENCE. Reassure him
that he will not suffer financial loss.

One Possability is a guaranteed buy-back price, a contract from your
company guaranteeing to purchase the car at an agreed price at a
future date. Doing so will give Frank the confidence to buy from you.


Here's the Smart Answer

I won’t let you buy this car until
our company protects your
investment. Let’s first agree on
a guaranteed buy-back price to
be repaid to you in the future.

Thank You
My father said, you must never try to make all the money that’s in a deal. Let
the other fellow make some money too, because if you have a reputation for
always making all the money, you wont have many deals.

J. Paul Getty


Negotiation

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