One-time encounters or long-term relationships: when negotiating strategies should differ
For years, I struggled to negotiate effectively with a business associate (I’ll call him Mr. X), despite concessions gargantuan in my estimation but miniscule and unacceptable in his opinion. With other such associates operating under nearly identical business models (Mr. A and Mrs. B.), I had reasonable discussions that led to mutually beneficial agreements. Listening to a podcast by mind-mannered negotiation guru Dr. Josh Weiss, I finally discovered what was wrong.
In his Negotiating Tip of the Day (April 5, 2005), Dr. Weiss presents two approaches for negotiating: Positional and Interest-Based, and provides guidance on engaging the proper method depending on the scenario.
Those who adopt the POSITIONAL APPROACH:
- Open with “overly high or overly low” offers;
- Seek to maximize gains in the short-term.
Those who use the INTEREST-BASED APPROACH:
- Want to fulfill certain interests with the goal of solving specific problems;
- Don’t see the other party as an adversary;
- Allow others to satisfy his/her interests;
- Recognize interdependence of the relationship between the two negotiating parties;
- Realize that short-term profits may not generate long-term benefits;
- Resist exploitation of the other party.
The positional approach is best for one-time encounters, such as negotiating the price of a car or an item “at a bazaar in a far-off land”; whereas the interest-based approach is ideal for nearly all other situations, such as the negotiation of service levels, particularly when a business relationship is involved.
Mr. X routinely wanted me to lower my prices and accelerate my turnaround times. I offered lower fees in exchange for a percentage of his commissions (which my work helped him generate) or resources dedicated to him in exchange for volume guarantees, neither of which satisfied his demands. Our relationship, viable in previous years, soured.
In contrast, Mr. A and Mrs. B told me their needs and accommodated mine. Only after listening to Dr. Weiss’s tip did I realize that I was participating in interest-based negotiations with them; and I could never reach an agreement with Mr. X because he took a positional approach to what should have been an interest-based discussion.
Want to improve your negotiations? Consider your negotiating scenario, pick your approach (positional or interest-based), and proceed. If you encounter Mr. X., walk away.
Dr. Weiss holds a Ph.D. from the Institute of Conflict Analysis and Resolution at George Mason University and is the Associate Director of the Global Negotiation Project at Harvard University.