A few weeks ago, I promised occasional columns on the art of negotiation. My e-mails tell me that the first one was well-received, so here's the second installment.
Let's start with the situation where you need something in the deal that you know will give the other side heartburn. Let's say you're a smaller software developer who creates custom software with a hefty price tag. Normally, you give your customers onsite service with a fast response time. In fact, central to your reputation in the industry is your reputation for support. Of course, you're able to do what you do by selling only within 100 miles of your office.
Now, you're discussing selling your product to a company that's 3,000 miles away.
You want the sale, but to do it you're going to have to sell the other side on the ``outrageous'' (from their perspective) idea that you'll provide support by telephone and by tying into their system remotely. What is one to do?
Sometimes the answer is to drop the idea early, let them vent about how outrageous the thought is and then move along to other issues, promising to resolve this one later.
This often works because time works wonders. The idea is that if you're going to propose an outrageous idea, do it early in the negotiations and then move on. It's an amazing thing but my experience has been that the mere passage of time helps it go down better than last week's tuna fish.
I think it has something to do with ``precedent.'' The problem with your idea was that it was unprecedented. You're known for your incredible response times with a live body and now you're suggesting (drum roll please) ``telephone tech support only.''
A month later, as you're progressing toward the final details of your deal, a funny thing will have happened with the concept of telephone tech support. It will no longer be a new and unprecedented idea. It will be an idea that they've heard before, albeit from you, but still it's no longer a new idea. The result is that the idea will often be more palatable.
It's ironic that time can have this magical power. Then again, when you consider the magical power time can have in helping us cope with whatever it is that life throws at us, this use of the ``mere passage of time,'' and the dramatic results I'm suggesting you can get as a negotiator, seems trivial.
This is an example of why you can't usually effectively compress negotiations into an arbitrarily short time. Time itself is a part of the process. If you ignore this truism, you may risk a poor result.
The Nibble
The flip side of dropping a bombshell on the other side early is nibbling late. The more time, effort and money the other side invests in you, the more they want and need to do the deal with you. Nobody wants to spend weeks working a deal and lose it right at the end.
Drop the big ones early, but then you should save some little stuff for some nibbles at the end. Let's say you're buying 1,000 desktop computers for your company and they're proposing 20-gigabyte hard drives. You know you need at least 30 gigs.
If you bring this issue to the fore early, you're likely to find yourself paying ``retail'' for the difference in cost. Mention it when your pen is about a millimeter from the paper and you may find that they'll just give you the bigger hard drives at their wholesale cost. (Nibbles are often delivered with that innocuous, ``Oh, by the way'' lead in like ``Oh, by the way, it turns out we really need 30-gig hard drives and I can't spend more than this.'')
I will say this about nibbling. While it's often effective, you win few friends doing it. I don't recommend it when you intend an ongoing relationship, but it may fit your needs when negotiating a one-time deal.
It can be Win-Win
In a negotiation, you should never lose sight of the fact that you're usually negotiating more than money. If it will be a long-term deal, you should never forget that you need to live with these people long after you sign the contract. A nibble, although a time-honored and legitimate tactic, is probably not one you should use as you finish negotiating an employment contract.
Then again, it might be a perfect way to get something like that long-planned family vacation, which will happen to fall one month after you start, although the normal policy is no vacations for the first six months.
The overriding point is that negotiation isn't war or litigation (government-sanctioned legalized warfare). It's a process that should end in a deal that's a compromise of everybody's initial positions. Give and you'll get. Avoid words like, ``This is a deal point'' or ``This is not negotiable.''
Speak softly. State your points gently. When the other side raises the pitch, you lower it.
Remember that negotiating isn't a science. Rather, it's an art honed by experience. Still, by studying this art and learning for the experience of others, you'll improve faster. More on this art in a few weeks.