If you’ve ever purchased an expensive item, you’ve probably experienced the wild swing in emotions that are a natural part of the negotiation process. Are you an adrenaline junkie who loves to take control of a situation and score the best deal possible? Or do you dread dickering and worry about being taken to the proverbial cleaners? Regardless of how you feel about negotiating, there’s no avoiding it. It’s part of everyday life.
I’m going to share something that has been extremely beneficial for me. I promise that if nothing else, after reading the rest of this post, you will at least have a step by step method for establishing a clear plan of action before your next important negotiation.
Picking a Negotiating Strategy That Works
For the sake of example, let’s assume you are in the market for a new car. There are two simple questions to ask yourself before you begin:
Is the relationship outcome very important?
By definition, negotiating involves you and at least one other party. Is the other party the stereotypical car salesman with one eye on your wallet, or is it your mother? More than likely, the value you place on each relationship is drastically different. (If not, maybe your time would be better spent visiting this website.)
Is the substantive outcome very important?
Are your finances so tight that you must have the best deal available? Or are you indifferent about the car you drive and the price you pay?
While this example lends itself to clear yes and no answers, this may not always be the case. Do your best to answer each with a definite yes or no. How you answer each question will determine the negotiation strategy best suited heading forward.
Based on your answers, which negotiation strategy suits this particular situation (Savage, Blair, & Sorenson, 1989)?
Exhibit 1
Exhibit 2
Car Purchase Continued
Let’s pretend you are purchasing your loving mother’s 1996 Crown Victoria. A sweet ride, I know. Since you love your mother, call her every day on your lunch break, and visit once a week, you answer YES to the first question. The relationship outcome is very important. And since money is no object in your world, you answer NO to the second question. The substantive outcome is not important.
Take a look at Exhibit 1. The chart suggests you head to the negotiation table (or your mom’s dining room table) with an “Openly Subordinate” strategy. Exhibit 2 suggests you concede to your Mom’s demands and requests, even if that means overpaying by $3,500 and leaving the “my kid is an honor roll student” bumper sticker on the rear window. You may get screwed on the deal, but that’s OK since we’ve already established the substantive outcome wasn’t important. You walk away a winner because the relationship outcome was saved and you and your mommy still adore each other.
Many times, the negotiation strategy will be easy to pick. If that’s the case, I encourage you to at least spend some time with table 2 to get some ideas before your next major negotiation.
Questions
- Have you consciously used one of these strategies before?
- Were you successful?
- What problems do you see by using this methodology when picking a negotiating strategy?
Savage, G. T., Blair, J. D., & Sorenson, R. L. (1989). Consider both relationships and substance when negotiating strategically. The Academy of Management Executive, 3 (1), pp. 37-48.
