COMMON GOALS

One of the things we’ve learned in our work with negotiators in all types of industries in almost every continent on the globe is that there’s a remarkable consistency in negotiation goals. In other words, when I ask people about their goals for any given negotiation, they almost invariably answer with one of a handful of responses. Interestingly, one of the most common of these is “I don’t have a goal.” For some reason, many people just don’t think about what they’re trying to accomplish before going into a negotiation. But even among those who do think about it and can provide specific answers to the question, there’s a great deal of consistency. Most of the answers I get—regardless of industry or location—are some variation on one of the following:

• “To close the deal by the end of the quarter”

• “To achieve a revenue increase of 12 percent”

• “To maintain or increase our market share”

• “To gain as much information as possible about the other side”

These may all seem like reasonable—even laudable—goals. But when you look more closely, they may not seem quite so laudable as they do at first glance. The real test of the validity—or, perhaps more correctly, the benefits—of these goals is how achieving them will influence the negotiation itself, the results of the negotiation, and any long-term relationship with your customer. Let’s see how each of them bears up under that kind of scrutiny.

As already noted, when I ask people about their negotiation goals, a great many of them tell me that they have no goals at all. This is, at least in part, because they approach negotiation with a tactical rather than a strategic mind-set and, as a result, are much more concerned with figuring out how to get there than they are with where to go. This is a problem because, among other things, not knowing where you want to go can make it very difficult—if not impossible—to get there.

More specifically, having no goal can affect the negotiation in several ways. If you don’t know what you want to achieve in a negotiation, you can spend a lot of time and effort negotiating hard for items that seem important at the time but aren’t really key to making the deal. Perhaps even more important, if you don’t have a clear picture of what success means in any given negotiation, you won’t be able to recognize a successful deal when you see one. Not having a goal can also have an impact on a long-term relationship with your customer by forcing you to focus on short-term wins that can damage both long-term relationships and profitability.

Even when you do have a goal, however, and regardless of what it may be, if there are multiple people within your organization who are involved in some way in the negotiation, and they’re not in agreement about the goal and/or how to attain it, you’re going to run into major problems. In fact, making sure everyone in your organization is on the same page is important for several reasons. For one, not being aligned with your internal stakeholders can create an atmosphere of distrust with those you have to rely on to get deals done, which can seriously detract from internal relationships. Moreover, such distrust not only makes internal negotiations more complex on any particular deal, it also makes the next round of internal negotiations more difficult. In other words, the earlier these internal stakeholders are consulted and agree on a common goal and tactics to achieve it, the easier your job is going to be.

As for the specific goals themselves, the first one on the list, “To close the deal by the end of the quarter,” isn’t really a goal at all—it’s a tactic and a dangerous one at that. Our purchasing clients tell us that they know exactly when the quarter and the year end for their salespeople and account managers because that’s when they’re offered the biggest discounts. This presents negotiation problems for several reasons. First, it can create false time constraints that put unnecessary pressure on the negotiating process. Second, it often costs money, as those time constraints force salespeople to make concessions they wouldn’t otherwise make. And, finally, it has a negative impact on long-term relationships because it can make salespeople resort to short-term, high-pressure closing tactics that are inconsistent with their messages and behavior. It can also teach customers to wait for the end of the quarter to start negotiations. None of this, of course, is meant to suggest that the timing of the close is irrelevant. If the timing is important to you—and it may well be—it’s something that should be discussed and, depending on how important it is, something you might be willing to trade to attain your goal. The point is, however, that it shouldn’t be the goal itself.

This is equally true of the next two common goals on the list—“To achieve a revenue increase of 12 percent” and “To maintain or increase our market share.” Like the “goal” of closing by the end of the quarter, these are also tactics that can create a number of different problems in a negotiation. They affect the negotiation itself because, when simply making more money is your primary measurement of success, your customer can sense it and will respond by doing the best he or she can to keep that from happening. Perhaps needless to say, that will, in turn, make attaining your “goal” even less likely. And even if you do get your 12 percent increase or higher margin, because both traditionally come at the expense of the customer, these goals can only serve to have a negative effect on any long-term relationship you’d like to establish.

Again, as with timing, this doesn’t mean that increasing your revenue share or margin isn’t something to be considered. If it’s one of the things you’d like to achieve, you should think about what else you might be willing to trade with the customer that will make the deal more valuable to him or her to attain it. Moreover, in order to not limit your revenue growth, you should think of it as a range—say 12 to 20 percent—depending on the other variables of the deal.

The last of the most common “goals,” “To gain as much information as possible about the other side,” is also more of a tactic, a means to an end rather than an end in itself. Going into a negotiation with this as a goal will result only in your spending the whole negotiation looking for data that may or may not have an impact on your making a sale. Moreover, even if you’re successful in gathering a great deal of information about your customer, you may not make a sale, and you certainly won’t have done anything to help establish a long-term relationship between you. In fact, although all the “goals” presented here may be perfectly reasonable as tactics, thinking of them as goals and acting accordingly can have a negative impact on the planning and execution of a negotiation, as well as on the long-term relationship and profitability of both parties.