Negotiation Strategy
S: How can this philosophy help during sales?
T: A sales philosophy forms a negotiation strategy. The strategy is to make each sale mutually beneficial. In our case, this should be a strategy of Win-Win Negotiations.
This strategy is based on 5 principles: separate people from problems; focus on interests, not positions; invent how to gain mutual benefits; use objective criteria; and know your Best Alternative to the Negotiated Agreement (BATNA).
S: And what do these principles mean in the case of sales?
How to separate people from problems
T: How could you separate a person from a problem? How to separate the buyer from his fears and troubles? And why do we need to separate them?
It is all about the reason why a person cannot solve his own problems. This reason is usually called “emotional involvement” or “conflict of personal values.”
When a buyer fears some trouble, he feels this danger on an emotional level and cannot separate himself from the problem. He perceives any attempt to change something in this problem literally as physical pain, as if changing his own body.
On the other hand, trouble arises as a conflict of his personal values. He understands that the purchase of this product may be useful to the company and to him (the first value), but the purchase on the seller’s terms can harm the company or himself (violation of another value). He cannot resolve this conflict because both values are equally important to him.
He is trying to find a solution at the expense of the seller. It seems to him that if the seller cedes in some way, the company, and he, will benefit without harm associated with the product purchase. Such a decision does not involve any changes in his own situation and can eliminate the conflict. So, he expresses concern that implies a seller’s concession.
Fear is also an expression of the buyer’s values. It’s a thoughtful solution to the conflict, and any change in this solution is undesirable to the buyer.
What should the seller do? He can, of course, follow the buyer’s lead and make a concession to him. This, probably, resolves the buyer's problem without affecting his values. But then the seller gets into a conflict situation. Concessions to the buyer are not “free,” the seller company pays for it. By making a concession the seller shows disloyalty to his company.
To prevent this from happening, the seller must make every effort to resolve the buyer’s problem without any concessions at the expense of his company. To do this, he needs to find a way to prevent the trouble. He should do it in the way that does not affect the values of the buyer, his “ego.” To do this, the seller needs to separate somehow the problem from the person.
And such a way exists.
The fact is that trouble is connected with fear, concern not “directly,” but rather through a certain logical chain of events. The buyer has already linked in his head both fear and trouble with his values, but he usually thought out this chain of events superficially. He has not yet managed to connect these events to his values. Such a detailed elaboration of the entire chain requires a substantial mental effort, and people tend to avoid it. They “know” how this logical chain of events can happen, and that’s enough to them.
What opportunity does this fact provide to the seller? Having learned which chain of events connects fear with trouble, the seller can try to break it. To do this, he considers the chance to prevent each of these events. One of these ideas or their combination can prevent the trouble even if the fear is realized. At the same time, such a solution in no way affects either fear or trouble. Working with these intermediate events, the seller separates the problem from the person, from his values. Such a solution would be quite acceptable to the buyer.
As a result, the seller can protect the buyer from the troubles that prevent him from deciding to buy, and at the same time avoid deviating from the terms under which he is selling his goods.
How to focus on interests, not positions
S: What is the difference between interests and positions?
T: The buyer wants to buy the offered goods but purchase on the seller’s terms threatens him with troubles. Naturally, the buyer wants to avoid the threat, he is not a masochist! This is his real interest. But he does not express this interest overtly.
It’s all about human psychology. The condition “I have a problem” is uncomfortable. As soon as the brain receives a signal that a problem has occurred, it feverishly begins searching for solutions. It does not calm down until it finds at least some “plausible” solution. What to do next? Of course, promote this solution.
How can I get out of trouble? Force the seller to make a concession. This is the simplest solution to the buyer. After all, he is not responsible for success of the seller’s company, he is only responsible for his company. If the seller yields, the problem is solved. Trouble never happens. The idea that the seller now has a problem does not come to the buyer’s mind. This is the seller’s problem.
The buyer offers his solution: give in, then I’ll buy your product. Of course, directly saying so would be impolite. The proposal to cede is expressed as a hint, in the form of concern. The buyer says, “Yeah, your product is not bad, but still a little expensive for us.” Let me translate it from the language of hints to normal language, “I want to buy your product, but cede to me, reduce the price.” “Reduce the price” is the position of the buyer, his version of a solution to the problem.
What should the seller do? He can, of course, focus on this position. Start arguing and proving that the price is quite consistent with the quality of the goods. Or engage in bargaining, reducing the price to the one that “suits” the buyer. As a result, either the sale fails, because buyers do not like to argue with sellers, or the sale takes place, but at a price that now does not suit the seller or his company. No joy, eh?
That’s why it is recommended to focus on the real interest of the buyer rather than on his position. Not on fear and expected concession, but on avoiding the trouble. To do this, the seller needs to find out exactly which trouble threatens the buyer and what chain of events leads to it. Next, the seller, together with buyer, needs to find ways to prevent each of these events and combine the ideas into a solution that suits the buyer.
Thus, focusing on the interest of the buyer, and not on his position, you can save the buyer from trouble and avoid making unnecessary concessions.
Dialogue 7. Sales Philosophy and Negotiation Strategy | 13 Dialogues on Win-Win Sales | How To Invent Opportunities for Mutual Benefits