Strategies for Negotiating in a Crisis
Our tax accountant offered to extend his payment terms to us as he knew our business – which relies in part on in person training – would take a short-term cash flow hit during the stay-at-home part of our current coronavirus crisis.
I declined his generous offer. But the offer represented a smart strategy by a sophisticated business negotiator to take into account the fairly unique circumstances presented by our current society-wide crisis.
What are these circumstances and how should you negotiate differently during them?
Everyone knows we face an immediate threat to our physical and economic health today, a classic crisis involving an unusual “time of intense difficulty, trouble or danger” (Oxford Dictionary). This crisis, like others, causes many in society to view others’ actions in different ways.
That includes how they behave in negotiations. In fact, we even have price gouging laws prohibiting certain negotiation behavior during crises and states of emergency. And we view individuals attempting to unfairly benefit from a crisis as immoral (just search the internet for “price gouging”).
So how should you negotiate differently in a crisis like this one?
1. Focus on the long-term business and human relationship
Use this time to strengthen your human and business relationships with your current and potential business partners, colleagues, vendors, counterparts and even competitors. The “we are all in this together” feeling and the fact that we cannot effectively fight this crisis without collaborating will create a special bond.
Building strong and long-lasting connections during this time is the right thing to do, good for everyone, and smart negotiating. How can you do this?
- Don’t hold your counterparts to the absolute letter of your agreements if they request a favor. They may be hurting from the crisis, and you will gain more long-term relationship-wise by commiserating and empathizing than by enforcing every “i” and “t” in the contract.
- Take the initiative and contact your partners and vendors to see if they’re alright. Don’t have an ulterior motive or purpose other than checking in.
- Avoid certain hard-nosed and aggressive strategies and tactics that might be appropriate in other times. For instance, don’t take advantage of your increased leverage and your counterpart’s desperation if it derives from a crisis. This is why laws exist against price gouging.
2. Exhibit creativity and flexibility
A client recently called me and indicated that their procurement department was reluctant to pay our initial fee, even though we have a signed agreement requiring it. They felt our contract was ambiguous regarding the use of that fee if we reschedule our training due to the pandemic.
After brainstorming about different ways to satisfy their procurement department’s interests, we decided upon an addendum that they felt would accomplish our goals.
Our mutual creativity and flexibility were crucial to re-negotiating this deal. Would it have been necessary in normal times? No. But we are not living – or negotiating – in normal times.
3. Offer special discounts and help to strengthen your goodwill and loyalty
We recently developed a new remotely delivered training program on Practical Ways to Fight Gender Bias and Sexism in Negotiations. We are marketing it with a special discount to our clients.
We also recently offered to waive the student use fee for our package add on to our partner’s negotiation teaching software.
Why? Because offering to help out your counterparts during a crisis: a) is the right thing to do, b) will not cost too much; and c) parties especially appreciate offers of help during crises and will remember it for years to come.
You will also feel better for doing so – and that can be invaluable during a crisis.
Latz’s Lesson: Crises require special negotiation strategies. Many will even be effective in non-crisis situations.
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Marty Latz is the founder of Latz Negotiation, a national negotiation training and consulting company that helps individuals and organizations achieve better results with best practices based on the experts’ research. He also has two bestselling books Gain the Edge! and The Real Trump Deal: An eye-opening Look at How He Really Negotiates. He can be reached at 480.951.3222 or Marty@LatzNegotiation.com.