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“What Matters More in Negotiations, the Outcome or the Relationship?”
You might be surprised with the answer. Please, read on to learn more about it.
Recent negotiations with one of my long-term clients have only confirmed what experts on Harvard negotiations claim. But, to understand the whole thing better, let’s start at the beginning, shall we?
The OLD model,
used before the 1970s, which is primarily known and used in sales, but can easily be applied to any business situation, divides business encounters into four parts:
- Part One,
where 10% of the interaction is allocated to establishing rapport or relationships, which happens through small talk;
- Part Two,
which adds 20% to qualification, where parties try to find out if the ground for doing business exists;
- Part Three,
where 30% of the time is booked for presentations (e.g. showing the features and benefits of a product or service);
- Part Four,
with overwhelming 40% of the time is used for closing only, where different “tricks” are used on clients to successfully close the deal;
To clarify a bit … In Part Two, where we speak about qualifications, it must be underlined that this has got nothing to do with trying to understand or build client’s needs. It’s simply establishing whether, for instance in sales, the client has enough money to buy the product, whether we are talking to the decision maker or someone inferior and the like.
Furthermore, an awful lot of time is dedicated only to speaking about oneself, which includes products and services as well. Let’s say you’re looking for a new supplier, who in practice spends 30% of the time talking about his/her company and above all, his/her products.
The process CHANGED COMPLETELY in the 1970s, where we can find a different distribution of the four parts:
- Part One, with 40% of the interaction spent on building trust, i. e. establishing rapport; if there’s no trust, usually, there’s no business.
- Part Two, where qualifications changed into identification of needs with 30% of the time allocated to this activity; a re-focus from oneself to the client and his/her needs.
- Part Three, a logical step in the business process, where finally a solution (not a product or a service) for client’s needs or problems gets presented; 20% of the time is enough.
- Part Four, the last in the process and dedicated to clarifying or addressing potential concerns of the client only requires 10% of the time, provided the previous steps have been taken as suggested above.
As you can see, Part Four these days only consumes 10% of the whole time, where suppliers, vendors, business partners do not use the old closing tricks, but rather offer additional information, ask questions to address a need, problem, concern, which might have previously been left out.
What’s the answer?
Now … The answer to the question above, in my opinion, is pretty obvious, isn’t it? In (Harvard) negotiations the relationship matters far more than the outcome. Especially if you are seeking a long-term cooperation or already have one set. The desired outcome achieved at any costs and over dead bodies is a short-term gain. Usually, not only with this client, because the bad news spreads nine times faster than the good one. And furthermore, it takes seven positively viewed actions so that you can finally reconstruct a damaged reputation.
Now what?
Regrettably, you can find people also nowadays following this old model, where they put themselves into the centre of the interaction and completely forget about the client and their needs. If you have invested considerable amounts of money into developing a product, launching it, why not investing into selling it, i.e. negotiations? The investment in comparison with the effects is rather negligent. For more information on negotiations, please, click here for (online) trainings on negotiations, please, click here or send me an e-mail on: office@mojcazirovnik.com.
