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The importance of satisfaction in negotiations


I was on a flight this past week to see a client in Ohio and was thinking about the importance of leaving the other party in a negotiation satisfied with the deal that they have done with you.

Consider a scenario where you trying to buy a house listed for $500,000 and place an opening offer for the property of $430,000 as you know you are going to negotiate.

Thirty minutes later, your agent calls to congratulate you on the purchase of your new home. As you hang up the phone, a sick feeling comes over you as you begin to wonder what is wrong with the property. Questions race through your mind about whether you mis-read the market, bought in the wrong location or whether the house has had basement flooding. Worse yet, you did not place any conditions on the purchase agreement, so the house is yours and there is no turning back.

Comparatively, consider a situation where you are trying to buy the same house and lead with the same offer of $430,000. The home owner counters at $498,000.

You go back at $440,000 and the home owner responds with $490,000. Over the course of the week, fourteen offers are exchanged, and you finally agree on a price of $462,500. The offer is accepted at 11:00 PM with the realtors reducing their fees to get the deal across the finish line. As you go to bed that night, you reflect on the epic negotiation you have just finished. You tell your friends the story of your conquest for weeks and brag to your significant other about the negotiation rockstar that you are. Hold on though, you paid $32,500 more for the same house and feel great? Why is that?

The main reason you feel great yet have paid more for the same house than you did in the first example is you have a high degree of satisfaction. The knowledge that comes from working hard for something want creates a feeling of accomplishment and pride. It creates story’s that you can use in your everyday life that help you relive the experience and feelings. Negotiation in business is no different. By giving the other party satisfaction that they have worked hard to complete an agreement, you are creating the same feelings highlighted in the second scenario.

What does this mean in practical terms for you as a negotiator? Here are some areas to consider in your next negotiation:

• When you are making moves, ensure you are always getting something in return. I believe it’s a myth when people say that it’s OK to give something without getting something in return as it may train the other party to expect you to give items up without having to give anything in return. Some would say that your generosity in a negotiation can create greed in the other party.

• Always find ways to show that the moves you are making are difficult. If you demonstrate that the moves you are making are easy, the other party will not feel the required levels of satisfaction. Equally, it may look like you have a lot more to give.

• One of the most common mistakes I see negotiators make is that they will start making moves look difficult as they are nearing their walk-away point versus throughout the entire negotiation. The intensity of the difficulty you are portraying should amplify as you are approaching your target deal versus at the point where you are prepared to walk-away.

• I would never under-estimate the value you can provide the other party in allowing them to tell stories in their organization of the agreement you have done. When their boss asks whether there is any more value in the deal and your contact is able to tell a story about how they have achieved all there is to achieve in the deal based on how you have portrayed the difficulty of making the moves you made, it will give your contact credibility and satisfaction. Ultimately, it may also help close the deal.

I would leave you with a final thought about the importance of satisfaction in a negotiation. The key in a negotiation is allowing the other party to have your way. As you are planning your next negotiation, consider ways that you can give the other party the satisfaction they both need and deserve so that they can tell their boss, colleagues, friends and family about the great deal you gave them.


Warren Sarafinchan

Warren Sarafinchan

Warren Sarafinchan is providing advisory services and professional development in the areas of Business Strategy, Negotiations, Supply Chain Management, Sales Management as well as Leadership Coaching. Warren has extensive experience working with leading organizations across North America designing and implementing solutions to complex business challenges and opportunities. Warren’s facilitative approach has allowed teams he has worked with to accomplish ‘impossible dreams’. In addition to Warren’s experience leading Supply Chain functions, he has implemented multiple ERP solutions, lead a Sales organization through a period of significant challenge and change as well as heading Information Technology functions. This broad ranging experience allows Warren to bring total business solutions to his clients. Warren works from the initial problem solving / visioning through to successful implementation. Most recently, Warren was the Vice President of Supply Chain and Sales at SunRype Products Limited. Prior to SunRype, Warren worked in senior leadership roles for Mars Canada, Maple Leaf Foods and Labatt Breweries of Canada. Under his leadership, the teams Warren worked with have developed and implemented strategies that have delivered significant financial improvements, increased customer collaboration and overall improvement in team engagement. Additionally, Warren has developed a professional development program focussed on negotiation that is proven to enable organizations to create significant value with both customers and suppliers.
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