Effect on Customers

Successful negotiations can lead to increased profits, but can also lead to greater customer satisfaction. For example, you are buying a second car and you see a car advertised in the paper for £14,500. You decide to make an ambitious offer to see how they react. You offer £11,000 and they accept your offer immediately. How do you feel?

Most people feel two things in quick succession:

1. I could have done better

2. There must be something wrong with the car

Think of this next time you are negotiating for your business with a customer or supplier. Are you .being fair. by offering your best price first time? What impact has your action had on the way the other side feels?

The objective of successful negotiation is not necessarily to charge the highest possible prices for your products, or to pay the minimum price possible for your supplies, but to creatively put together solutions to problems that ensure:

• The best possible outcome for your business.

• Clients and suppliers who are happy to do business with you.

• A reputation for being a tough negotiator while earning the respect of those with whom you negotiate.

Modern Negotiations - a look at negotiating in the 21st Century

As the euphoria surrounding the dawning of the third millennium fades, the realities of our future world increasingly confront us. When we, as business leaders, pause to read the messages inscribed into the closing decades of the past century, we find that we are increasingly caught up in the crossfire of technological demands.

If we are to successfully conduct our business in future, we have little choice but to creatively respond to these demands. Were we to consider ignoring them, the words of the Red Queen in Lewis Carroll’s Through the Looking Glass - “It takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run twice as fast as that.” - are likely to haunt us. Negotiators who fail to keep pace with today’s ever-changing business landscape are destined to find they run in place with poor Alice.

Paradigm paralysis

Traditional wisdom has firmly conditioned us to rigidly adhere to a face-to-face negotiation paradigm. As a consequence, we seldom stop to question whether it is absolutely essential to embark upon an extended trip whenever contact with the other party in a negotiation is required. Because we assume that something like email precludes direct face-to-face contact, we tend to reject it as a means of negotiation. Our paradigm paralysis prevents us from even considering whether email can creatively be manipulated to effectively augment our face-to-face negotiations.

Rapport

In his research into the use of different communication media in negotiation, Michael Morris of Stanford University found that the psychology of trust was the most important factor that determined whether a particular media would make a positive contribution to a negotiation. He found that although most experienced negotiators strongly emphasise the importance of rapport - shared positive emotion and regard – few paid attention to it, as it is difficult to measure. Not to be discouraged by the reluctance of his colleagues, he developed ways of gauging rapport in negotiations, and found that the nonverbal emotional cues that are present in face-to-face negotiations result in higher levels of rapport than in the case of telephone interactions.

In studies specifically related to email, Morris found that role-play negotiations via email were less likely to be successful than were face-to-face interactions. It transpired that the main reason was the tendency for parties to be offended by blunt email messages that they often misconstrued. The following examples serve to demonstrate possible coces of such messages:

“Anything less than £1 million will be a blatant give-away and will not be a fair price.” “You cannot be serious! We are definitely not going to pay for all your development costs and thereby subsidise other clients.” “The minimum damage payment we deserve is £2 million.” “I must say you seem to have a liking for vile jokes. Get serious and stop wasting your and my time! Mail me when you are ready to enter into us discussion.”

Although email is an extremely useful medium for relaying factual information, it has severe limitations in terms of tone and attitude. What may be intended as a clear and direct message could be interpreted as blunt and/or rude, while a humorous message may be perceived as offensive and derogatory. An ill-conceived email message could result in the destruction of a positive relationship built through face-to-face interactions, and could even scuttle a potentially lucrative deal.

Relationship-building email

The challenge we face is to adapt email in such a way that it becomes a useful secondary negotiation medium. We need to add relationship-building content to our email messages; content that signals positive emotion and intent, such as: “By working together to achieve our mutual interests we have made great progress,” or “The trust and flexibility you have demonstrated has made it a fulfilling experience to work with you and your company.” This helps to some degree to overcome the communication ‘gap’ due to the absence of nonverbal expressions and voice manipulations.

More thinking time

In face-to-face negotiation it often happens that a negotiator feels pressurised to accept a settlement that later transpires not to be in the best interests of the company. Email has the advantage that it provides skilled negotiators with an opportunity to think before responding.