Is It Really About Price? Negotiating—Part 2

It seems that my previous blog on negotiating ( hit a nerve with folks.  And that perhaps I was not clear enough regarding negotiations based on price.

Let’s begin by saying that in our experience, if one has articulated value and built trust throughout the dialogue leading to the final stages of reaching an agreement, price is NOT a deciding factor.  As many respondents on LinkedIn said, there is a need for balance and fairness in the conversation.  It should not be an adversarial relationship, pitting buyer against service provider.  Hopefully throughout the process, a relationship has been established based on trust.  Two books are fantastic resources on this topic, Charles Green’s Trust-Based Selling and Fisher, Ury and Patton’s Getting to Yes.  (Thanks to Karen Jackson for the reminder on the second one.)

Realistically, a company has a budget and the service provider should be sensitive to it.  However, during the dialogue, the budgeting parameters are often part of the resource conversation.  That is to say, in discussing investments—time, personnel, etc.,–any real financial constraints or concerns are raised.

By so doing, a prospect makes clear the level of priority for the project and the service provider/consultant should offer a solution that comes close to addressing the business challenge while being within ALL resource guidelines.

Compromise more often than not addresses value and principles, and has a high emotional component.  There is a more negative connotation because it is often perceived by one party that they are deviating from a desired goal and are giving something up.  Given the nature of consulting, this human relationship component is key.  If one party is not happy, it sets a shaky foundation for moving forward.

Goals should be covered early in the discovery phase with the prospect.  The question should be asked:  If necessary, what objectives should be pushed aside given resource limitations?  By the time numbers are discussed, both parties should be close.  Yes, that is the ideal, and usually we’ve been on the mark.

Negotiating, on the other hand, is derived from the Latin word meaning “to transact business.”  Interestingly, in searching both online and in the Oxford English Dictionary, nowhere is negotiate listed as synonymous with compromise.  Rather, it is about reaching an agreement.  Perhaps the project goal is a compromise, and that is something that takes place early on in the process while setting objectives and reaching agreement based on those.  Negotiating, if handled properly, merely is the final step to “carry on business.”

Thanks again to those who added their insights and perspectives on this issue, especially members of the LinkedIn group Association of Management Consulting Firms (AMCF) who live and breathe these issues daily.  One professional said that “dignity and grace…[are required] in the negotiations process…to build relationships on trust.”  I agree that these characteristics are central to trusted relationships.  I would add that these need to be exhibited behaviors in the process of discovery and carried through to the end.  Trust must already be present.

In the words of the 18th century English poet and writer Samuel Johnson, “It is difficult to negotiate where neither will trust.”

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