Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

I recently concluded a few negotiations – business and personal – and learned and confirmed some things that have universal applicability to many negotiations. I have added these to my personal list of Negotiation Lessons Learned so they are front and center for me in future negotiations. You might add them to yours, too.

1.       Maintain focus on your primary goal

Our current roof lasted 21 years – and we needed a new roof. So we got some roofer recommendations and met with three who bid.

One was particularly impressive. He really knew his stuff and was intensely focused on quality, details and customer service. And his bid, while not the lowest, was reasonable based on our market research.

So I asked him to send me his standard agreement so we could get him scheduled soon as he was extremely busy. After looking over his one-page agreement, which I suspect he had been using for years, I asked him if I could make some revisions to better protect us both. He seemed fine with this.

Now, keep in mind that I am a lawyer, as is my wife, and he knew this. So I sent him a revised agreement with some slight modifications, mostly technical. I next received a voice mail from him stating he thought we should find a different roofer.

I was very surprised. So, after discussing this with my wife (who was upset at me as she just wanted our roof replaced before it rained again), I called him back to explore his concerns. Bottom line – he just wasn’t comfortable with any changes.

Since none were deal-breakers, I signed his agreement. And we got a great new roof.

My lesson? Keep your eyes on your primary goal. The revisions were minor, but our selection of the roofer was not.

2.       Almost all rules have exceptions

A consulting client was recently in the midst of a negotiation with a nationally prominent attorney when we unexpectedly received a “best and final offer.” In most negotiations, using this specific language signals there will be no more offers coming from that party.

Based on this norm and this attorney’s reputation – which was great and one with a lot of credibility – it seemed like the end of the line. It was not. Instead, my client countered and asked for one more move. Unexpectedly, we got one. And while it was not a huge move, it was significant.

The lessons? One, it doesn’t cost anything to ask. And two, even seemingly sacrosanct rules sometimes have exceptions.

By the way, our counterpart’s credibility has now taken a hit, for obvious reasons.

3.       The power of reciprocity and relationships

Our family has been thinking about building a new house for awhile, and I don’t know how many times this custom homebuilder had come out to discuss our new house plans. But it was a lot. And it spanned five years. Each time he was the consummate professional, exhibiting patience and helping us focus on our needs and interests. Importantly, he never asked to be paid for his time.

Finally we were ready to move forward. But we just didn’t think it right to do what I recommend in many significant negotiations – strengthen our leverage, here by bidding it out to other builders.

Why not? We felt like we owed him for all the time he spent with us (the principle of reciprocity). Plus, we had developed a really good working relationship with him and would be working closely with him for months on the new house. Bidding out the contract at that point would have sent the wrong signal.

Bottom line: we wanted to hire him and the money we might have saved with stronger leverage wasn’t worth the negative impact the bidding process would have had on our relationship.

Relationships matter.

Published July 6, 2014 The Arizona Republic

Share This