Posts Tagged ‘negotiation’

Are You Preventing Your House Sale ?

by Guy Ralfe on May 5, 2010

We are in the process of selling our house, the same house that when we bought it, we bought because of the opportunity we saw in the land and buildings to make it into the home we wanted it to be for our family – it was also at the time going to be our home for the foreseeable future.

When we negotiated for the house we were negotiating with owners that had spent the last 28 years in the house. They clearly had a lot of sentimental attachment to the house, but to me the buyer this sale was purely getting the homestead for as low a price as I could.

Fast forward 5 years and we have come to the end of our stay in the home and it is just now that the home looks like the home I imagined when we bought the house. Today we also received our first offer on the house – it was ridiculously low balled and our first reaction was that we had been slighted and victimized so in retaliation we rejected the offer.

… fortunately good help was close at hand and we were mentored through the errors we made.

Firstly we had to get to grips with what was happening – we were selling a piece of land and buildings, there can no longer be any emotional ties to this property otherwise we wouldn’t be selling it.

The buyer is looking at the property through their vision of what the property can be for them. The agent is responsible for identifying and selling the strengths of the property to enable the buyers vision. By virtue of the fact that we had an offer the agent had completed their obligation.

By us refusing the buyers ridiculously low offer closes the door and ends the conversation. Our response of a rejection may even have offended the buyer in the same way their low ball offer did to us.

The better response is to respond with a counter offer, at or very near to your asking price. This signals to the buyer that you are interested in working with them. Once this process begins the buyer is now in the thought process of getting the object of his desire.  In the majority of cases a common ground can be found and the transaction completed when you approach the sale in this way.

Another benefit of this is that even though you have not accepted the offer, the property is effectively under “negotiation”. What this does is it heightens the sense of urgency for any other potential buyer and with a right to first refusal, means that you could easily accept a better offer.

A far more powerful option than closing the door by rejecting the offer – if during negotiation a mutual agreement cannot be reached you can still easily walk away from the offer – remember it is just a piece of property.

Listen for the action, test the speak

by Guy Ralfe on October 8, 2009

 Coordinate ActionHave you noticed how people come out of meetings and they question if someone that they were meeting with understood them or was telling the truth? I hear this often after meetings around negotiation when trying to find common ground or negotiating the way forward on projects. Our “bullshit” senses are triggered when we notice an inconsistency between what is spoken and what is done.

In business today people seem to be busier than ever before. With technology so many more interactions take place on a daily basis than at a lifetime ago. People find themselves in many situations daily where people are making requests and offers to them. Due thought is not always given to each request and the committed response is often based on a mood or a perceived ‘right’ answer just to move on to the next interaction. What people are not doing is thinking about the consequences of these spoken answers. How much time, effort and trust it costs each time the requester and recipient leave with different interpretations and then perform inconsistently with each others’ expectations.

Michel de Montaigne wrote over 400 years ago –

The true mirror of our discourse is the course of our lives.

What we really believe and think at the time is truly expressed in the actions we perform afterward. The good news from this is that humans have been consistent at this for well over 400 years so we can count on it continuing into the future and it will be worth our efforts to improve our skills in this regard, as it will greatly increase the efficiency with which we can execute projects and negotiate agreements aligned with both parties concerns.

Recently I was in a conversation where a client was very dissatisfied about a particular product delivery and they wanted to quit the development project. The supplier also liked the idea of quitting as the fixed price scope had crept out of sight and costs were at three times anticipated with an open punch list still to be contended with. As both parties were about to close and agree to walk away the supplier mentioned that they could have the components uninstalled in an hour, to which the client suddenly gasped out “why do you want to do that?”. While this startled the supplier it quickly became apparent that the spoken commitment by the client was very different from the actions that would have taken place had the conversation ended before the suppliers declaration of action.

This conversation ended well because the supplier declared the consequential action of the request, which avoided what would have been a very tense, and likely costly situation had the supplier just acted as he thought he had agreed.

Here are 5 tips to try in future engagements to build trust, coordination and efficiency:

  • Listen more – the more people speak the more consistent they will speak in terms of their true concerns
  • Repeat the request – when making a request ask the person you have made the request to, to tell you what they heard and/or what actions they plan to take.
  • Ask more questions – about the importance, value, action to be taken from the counterparts perspective
  • Always make an assessment of the moods – lookout for moods of resigned, despair, indifference, overwhelmed
  • Check-in informally – truths are often revealed in different settings and surroundings

There is a lot of posturing and politics in the marketplace, but one thing you can be certain of is that people act for what they truly care about. You don’t see people doing anything they do not care for. So always listen for the action.

You Don’t Get What You Deserve, You Get What You Negotiate

by Robert Driscoll on August 13, 2009

neg-blog-21We’re always negotiating whether we realize it or not.   It’s a part of our daily lives with our family, friends, colleagues and customers, yet we can always learn to do a better job at it. 

These are 5 simple rules to help make the transaction more pleasant for you and whomever you are negotiating with.


1.     Always Ask

You not only ask for what you need, but what you want.  If you don’t ask for what you want, you may never get it.  This applies to both those making the offers as well as those receiving them.  So many of us miss out on opportunities by simply forgetting this simple rule.

2.     Know What You Want

This also entails what you don’t want, but you have to know what it is that you are after.  Having a clear understanding of what your desired outcome is will help you as you go through the negotiating process.  There could be several outcomes, therefore you need to decide on your priority interests and rank them as it is important to remember to trade items of less importance in order to secure items of more importance. 

3.     Prepare For Your Negotiation

You need to be prepared before you start negotiating, therefore you need to research and gather information to help guide you through the several outcomes that could arise.  Having the knowledge and knowing how to act in the moment will give you an edge as you start to negotiate.  Lack of planning often appears at the negotiating table as too much reliance on demands and being reactive.  Good planning, on the other hand, can provide you with the direction needed to effective problem solving at the negotiating table.

4.     Know Who You Are Negotiating With

Aside from gathering information on what you want your end result to be, we often forget to find out about who we are negotiating with.  Through your network of help, ask colleagues or business partners if they know the person you will be negotiating with and what advice they have for you.  It’s usually a mistake to approach negotiation as a casual encounter without much forethought. 

5.     It Should Be An Ongoing Relationship

In sales, those who are successful are the ones whose offers are accepted.  Sounds simple, but in order to do this, you must build relationships with your customers.  As you negotiate your offers with your customers, it is important to not only focus on the tactical issues but also the longer-term strategic concerns to ensure an ongoing relationship.  In order to develop these ongoing relationships, an atmosphere of trust needs to be established so that even when the negotiations are settled, both sides feel like their concerns were taken care of and not taken advantage of.

As negotiation expert  Dr. Chester Karrass  puts it so eloquently, “You don’t get what you deserve, you get what you negotiate.”

Leveraging Comfort

by Yakov Soloveychik on August 4, 2009

leverageassetsMany of us have been to a vacation time share presentation to get a free vacation, but with the clear intention of not purchasing it… and admittedly, have found ourselves on the edge of the purchasing decision! They did not close the deal, but did come close… very close… and for that, I have to give them credit – their sales process is very good. It is based on the centuries old four stage AIDA sales sequence:

1. Attention

2. Interest

3. Desire

4. Action

The concept of AIDA comes from the perception of a buyer going through stages of first becoming aware or Attentive to a proposed product or service, then, if it is relevant, it provokes Interest and willingness of the buyer to learn more about it. If the buyer perceives it to be valuable and unique or special, the state of Desire develops, and most likely leads the buyer to take Action to purchase or accept the offer.

In essence, the classical AIDA model is: Get ATTENTION – Create INTEREST – Make it DESIRABLEACT to Close the deal.

This looks logical and simple, but does not always work as intended. The main breakdown usually occurs in the transition from (stage 3) Desire to (stage 4) Action. What makes this transition difficult is the inception of the “decision making point” that may often change the dynamics of the selling process as the reality of the consequences of the buying decision overpowers the desire to acquire.

Successful sales people differ from those who do not close effectively in their ability to keep the energy and emotional levels of the desire stage high through the transition stage to close the deal often at or over the borderline of ethical norms by hiding or minimizing the impact of consequences or risks and thus deceiving their clients.

Let’s take an example from a familiar domain – you are trying to convince your child to complete the homework. You got their Attention – that is relatively easy (whatever methods you might be employing) – now your child is sitting in front of you and you are working on getting them interested to do the work. You proceed to talk about the benefits of education trying to build up the Desire (to get to a reputed ivy league school rather then working in the local fast food chain) … and then you go for the kill and at that very moment the whole structure collapses as your kid starts crying as they realize they have to give up TV or playing with the kids outside.

So, what just happened? … The transition from Interest/Desire stage to Action was not prepared – there was no COMFORT zone in the transition and all high emotional content achieved during first three stages simply collapsed.

This transitional issue became obvious to many in recent years and lead to the modification of the century old process of AIDA to what is now known as AIDCA. The “C” stands for the Comfort stage. This stage bridges the gap between the Decision making stage and the Action stage; the very gap that cause the breakdown we observed in the earlier AIDA process. Helping the customer reach this comfort zone is essential in the modern sales/negotiation process.

The old notion: “make me an offer I can’t refuse” is still very powerful in leveraging this comfort, but it is not always possible. “Make me an offer that I can comfortably accept” becomes more realistic. Both require one important piece of information – what is important, the “deal makers” and the “deal breakers”, the risks and the benefits perceived by the buyer, not the seller. Obtaining this information becomes critically important in order to create the comfort zone and close the deal and that requires a discussion rather than a monologue.

Sales presentation becomes Sales conversation.

The Vacation time share industry developed a great approach to the creation of the comfort zone. After showing you all the nice places you can go and most beautiful spots you can reach – they turn the table and start asking questions like:

  • how you spent your vacation time in the past?
  • what do you want to do in the future?
  • what are your key requirements in regards to price, activities, types of destinations etc?
  • All this with the purpose to find out and make you feel comfortable with what they have to offer and your decision to purchase.

    There are three distinct stages in the process:

    1. Development of Comfort zone:

    (i) Early in the Interest-Desire stages, start the interactive exchange with the purpose of identifying and developing the comfort zone structure for your client.

    (ii) Do not assume anything as no two customers are exactly the same.

    (iii) No previous experience is applicable (even with the same individual).

    (iv) Ask questions and be (not just look) sincere.

    2. Reaching the Comfort state:

    (i) When you are ready, get confirmation from the client about what you just learned of their interest and their comfort/discomfort with the decision to act.

    (ii) Talk openly about pros and cons and risks as you think they perceive it.

    (iii) Summarize and ask for confirmation or modifications to this understanding.

    3. Leveraging Comfort:

    (i) Using what you just learned in the process add something to your offering that makes your client decision making process easier and your offer more acceptable.

    (ii) Extend the warranty period, give additional guarantees, add refund benefits, etc – use whatever you discovered is important for this client to customize the offer, instead of providing them a generic prepackaged offer everybody gets.

    Now, let’s return to the example with your kid. After you told them about the choices of Harvard vs. McDonald and the importance of doing their homework, engage them in a discussion and ask questions of what they feel is important for them and where doing homework belongs in the level of importance. Ask questions of what would make them comfortable to complete homework before watching their favorite TV show. You may learn that taping their show and allowing them to watch it later may make the whole difference as that introduces the Comfort stage for them. You may then “leverage” this comfort further by offering to DVR the entire show every day and letting them to watch it any time they want after their homework is done.

    Here are a few questions that will help you in your thinking on the development of Comfort zone:

    (i) What do you like about the product/service/offering?

    (ii) How do you see the benefits, if you make the decision?

    (iii) Where do you see the risks and difficulties?

    (iv) What would make you feel good and enjoy your purchase a year from now?


    Yajov SoloveychikYakov Soloveychik is a business advisor, mentor and a personal coach to CEO’s and business owners. Yakov’s professional and entrepreneurial career includes VP,  COO, CEO positions and service on board of directors with a number of technology based companies in Los Angeles and Silicon Valley