The Negotiator Magazine

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Staying On Top During Price Negotiations

David A. Lax and James K. Sebenius

Pick any ten negotiations.  Money probably takes center stage in most of them. Whether the discussion is about selling a division, starting a relationship with a supplier, or accepting a new job, money is the motivating force.

But money isn’t everything, especially in complicated negotiations. To maintain a productive climate in your negotiations, you may need to aggressively reframe them away from that pure price focus, in favor of a fuller package of interests.

This broader view is part of what sets 3D Negotiation™ apart from the standard negotiation tactics with which most people are familiar. That relentless tug toward a “pure” price negotiation is a pitfall you can avoid by emphasizing the design and setup of your deal as much as the tactics you’ll use when you get to the negotiating table.

Think Out of the Money Box

How do you take money out of the spotlight? Here’s an example: “I understand that you want to reduce costs of operation, and that the prices we charge you are important.  We will respond to you on pricing.  As we’ve discussed, price is only one part of what gives you a competitive advantage relative to your competitors and we believe that we should focus not on price alone but on how we can help you maintain and strengthen your overall competitive position.”

If you’ve done a good job of understanding the other side’s interests and situation—both from a business standpoint and from the personal standpoint of the individuals with whom you are negotiating—you can probably steer the conversation toward proposals that solve broader problems for your counterpart, rather than just reducing prices.

What if you can’t?  Then it’s time to look for a way to appeal to the other side’s stated interests, while still meeting your own. 

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February 2007