Positional Bargaining

Positional bargaining by its very essence implies that you adopt a certain position and then proceed to bargain based on this position. The intention is to keep as close to this as possible so that you achieve a desirable outcome.

There may be several reasons for adopting this position, amongst them; a fear of the negotiation getting out of control, poor or hurried preparation and reluctance to engage in the creative process. Also there may be a strong desire to WIN the negotiation and not get taken advantage of.

Why Are We Negotiating?

Let’s go back to why we are in the negotiation in the first place. Presumably we want productive relationships with both our customers and suppliers, one where we genuinely feel we are getting value and we usually see as long term.

We know the cost of getting new sales is considerably higher than cultivating existing relationships and also we know that engaging new suppliers who don’t really understand our business has considerable costs in the early stages.

We want suppliers who care about the service they give and our perception of it, listen to our feedback, take action on it and really work for us. So it’s important that the negotiation is a win-win negotiation with both parties feeling they have a good deal.

What’s In It For Them?

If you are losing customers and suppliers are no longer keen to supply you,it’s worth asking why? Why are they are no longer happy working with you? Could it be they think they‘re not getting good value from the business relationship? Could it be that they feel they were taken advantage of in the initial negotiation?

So let’s look at some principles that can improve your negotiations

  • Assess what the other person’s objectives might be and identify what is really important to them. What things might they be willing to give ground on easily
  • Identify things that are clearly NOT negotiable, then think about positions where you might be prepared to move yourself, and what you would like in return. It might be the customer or supplier can give this easily. For example if you are a bit short of cash you might be able to give a small discount for guaranteed improvement in payment terms.
  • The essence of skilful negotiation is creativity, so have several options around each of the negotiable issues. This will enable you to move positions so that you continue to have a negotiating position, rather than just concede.
  • Listen to the other person’s ideas and ask questions to get their ideas. Remember, you are looking for a win-win situation, where they feel they have a good deal and can go back to their board feeling proud of what they have achieved and you are also happy with the deal.
  • Be prepared to embrace ideas you have not considered, they might really work for you.
  • Finally, develop your interpersonal skills. Most people say that it’s the face to face communication that counts, so relax and be confident; be tough on the issues and soft on the people.

In the next article we will look at preparation needed for effective negotiation. A podcast will also be available which you can download from our site.

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