Nogotiation Blog

Insights on Business and Sales Negotiation

Join us for insights on how to negotiate a winning balance, where where both sides understand and appreciate the value they receive. As a result, you are more likely to forge a long-lasting relationship that yields more and better opportunities in the future. This idea underpins K&R Negotiations’ Win Wisely™ approach and underlines the importance of using leverage wisely.

The Trouble with Value

A recent Computerworld article covered a study done by the Harvard Medical School about the value of computerization in US hospitals.  The article led with the headline: “Computers don’t save hospitals money”.  This is not good news if you’re a seller of Information Technology solutions. First tip: Be prepared1. You can expect to hear about this, certainly if you are selling in the health industry, but generally if you are selling the value of Information Technology to people who either have trouble believing in the value of IT, or for whom it is disadvantageous to admit it (for example, buyers in procurement roles).  The article will be used in attempts to undermine your value arguments, and thereby reduce your prices. For those of you who regularly read our articles, or are…

Negotiation Anosognosia

Wikipedia says, “Anosognosia is a condition in which a person who suffers disability seems unaware of or denies the existence of his or her disability. This may include unawareness of quite dramatic impairments, such as blindness or paralysis.” The description could be applied to a negotiator who fails to recognize what everyone else can see – their product or service has value to the buyer.  In a recent account planning and negotiation review, a sales team came to us and basically said, “Our proposal for the customer provides $500,000,000 (yes, $500 million) worth of our product for $100,000.  They haven’t signed yet.  What should we do?” This team was Anosognosiastic (if such a word exists).  They failed to see what many others could, including the K&R reviewers. …

Principled Concession™ Poll – K&R’s Answers

Our thanks to those of you who voted in our latest poll, “Which of the following is a Principled Concession™?”  For those who need some reading on the definition, see our article here or the full list of our articles about this topic here. Without further delay, our answers: “Why don’t we split the difference?” As of the date of this posting, no one chose this answer. That’s good, because this is not principled. “Split the difference” can be characterized as a way to make both parties equally unhappy. Since neither has a good reason for the split, each is likely to go away thinking they could have (or should have) gotten more.  The technique often works because it appeals to our sense of fairness. “You can have 5% off if you buy today.” 5% of our voters picked…

Advance Fee Fraud - Again

In September of 2008, we wrote about the concept of “Advance Fee Fraud”, and how sellers fall victim to the tactic from buyers in various forms.  A couple of those include promises of future business “if you give me a good deal now”, or “if we do a successful proof of concept”. Sometimes this practice is known as a “Nigerian 419 scam”, although that’s a bit unfair to Nigeria.  However, a recent article we saw on brought it all back when it stated, “Nigeria dropped nine places to 130th position out of the 180 countries ranked on the global Corruption Perceptions Index (CPI) 2009 by Transparency International (TI), a global anti-corruption watchdog.” Review our article – don’t let a buyer convince you (as a seller) to advance them a…

T-Mobile Credibility and Leverage... Again

You may recall our October article about T-Mobile’s Sidekick user data loss problem, or may have read some of the 25 or 26 million references available via a search for “T-Mobile data loss”. It is a simple, real-world example of how loss of credibility can hurt your business. T-Mobile’s public statements allow us to make some estimate of the business value of this temporary service loss, and the  long-term credibility loss that goes with it.  Add these up: The estimated cost of lost business in sales of Sidekicks and the far larger long-term loss from sales of service plans when T-Mobile temporarily suspended sales of the Sidekick after the outage. The cost of the $100 “service vouchers” that were offered to users inconvenienced or impacted by the outage. The 14%…

Principled Concessions™ - The short version

In our workshops, we teach the concept of a “Principled Concession™”.  Many people hear this and confuse it with the related but different concept of trading concessions in a negotiation.  They think of common examples like these: “If you buy 2, I can discount the second one by 50%.” “If we reduce the scope by providing service 12x7 instead of 24x7, we can lower the price by 20%.” “We can finance your total $100M payment for this project, at a cost to you of $1M.” These “offers” follow the least-acceptable form of changing your position.  It is a more acceptable form than this one: “I’ve sharpened my pencil, and I can offer you an additional 12% off the price.” It is easy to see that the first three are preferable to the last one.  The 12%…

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Creating Value-Based Leverage

In this short video, learn why negotiation is really the art of finding agreement.

Mladen Kresic introduces the concept of value-based negotiations leverage and why it is a powerful tool for moving conversations to an agreement.

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