Tuesday, March 13, 2012

Taking Stress Out Of Negotiations

Negotiating has earned its reputation as an unpleasant process in large part because it is inherently stressful. Stress is produced when something or someone blocks a person from obtaining a desired goal, which just about defines the process of negotiation. Each party is blocking the other one in some way. “I won’t buy unless you give me this” is just another way of saying, “You can’t obtain your goal (to get the order) because my demand (to get the concession) is blocking your way.”

Two other stressful things happen in negotiation. The blocks generally get bigger and bigger as the easy concessions are made early and the tough ones—the big price cut or the large volume order—are left to the end. And, the closer you get to the end, the closer each person feels to achieving his or her goal. The carrot is dangled closer and closer to the donkey’s nose.

Stress, stress, stress. That’s the real reason many people feel uncomfortable when put into a negotiating role. The uncertainty of the outcome is stressful. The pressure to make multiple decisions is stressful. The fear of feeling outfoxed is very stressful. It’s certainly a lot less stressful to say, “Sorry, our prices are firm. Take it or leave it.” You get the pain over with.

Negotiation doesn’t have to be that way. I’m not saying that you’ll eliminate the uncertainty, the decision-making, or the possibility of leaving some money on the table, but you can make the process less stressful if you have the right attitude.

The better way, of course, is win/win negotiation, where both parties recognize that the value side of the equation is not finite. If you can focus on building the value of the deal, both the buyer and the seller generally win. Win/win negotiation is at the heart of the Creative Selling System because it focuses on need satisfaction.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

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