Chapter 10: Step Four:Using the Blueprint to Divide Value


OVERVIEW

Now, having estimated both your own and your customer’s CNA and Wish Lists, validated your estimations, and created value by constructing Multiple Equal Offers for your customer, it’s time to go on to the fourth and final step in the Strategic Negotiation Process: Using the Blueprint to Divide Value.

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Actually, talking about this step in such terms isn’t entirely accurate, even though that is ultimately what happens. This is the step that most people think of as “negotiating,” but what it’s really about is trading. As such, it’s what all the work you’ve done up to this point is for. This is where it pays off. It’s the same as if, instead of learning a new way to negotiate, you had learned to play an instrument, studied and rehearsed, auditioned for and won a chair in a symphony orchestra, and were now about to play for the first time. As in that kind of situation, you might feel a little nervous, but you’ll soon find that you’re prepared for anything your listener—or your customer—might throw at you.

You’ll recall that in the chapter on setting up and running validation meetings I discussed opening offers and other anchors. I also mentioned how you can use your validation questions to begin some subtle anchoring on both multiple trading items and CNA analyses that include elements other than price. Now, having developed Multiple Equal Offers for your customer, you’ve built on that concept by anchoring on three different business relationships, each with multiple variables. And because you have, it’s extremely unlikely that you will end up negotiating only price. What will probably happen when you sit down to present the MEOs to your customer is the customer will want to anchor on “price and product,” while you will want to anchor on the “total value” of your business solution. And, in fact, all the work you’ve done up to this point has put you in a good position to do that.

I must point out, however, as I’ve said before, that there are no guarantees here. In the words of my partner, Max Bazerman, “There are no silver bullets for negotiation, but a good process shifts the odds in your favor.” So I can’t absolutely promise that using the Strategic Negotiation Process will enable you to conduct successful negotiations every time. What I can promise you is that doing so will greatly increase the odds of your being able to take a proactive role in managing the negotiation rather than a reactive and tactical one, and that, as a result, you will be surprised less often, you’ll have more power, and most of the negotiations you’re involved in will produce a high degree of joint value.

Now, before I begin to discuss the mechanics of the presentation of your MEOs, one important point needs to be made. We’re often asked who should open first in a negotiation; there are two schools of thought. The first school contends that you should let the other side open first so they’ll show their hand. The second says that you should open first so you can anchor the negotiation. But the right answer to the question: “It depends.”

In a situation in which you’re rolling out a brand-new service, you’re not sure exactly how it will be valued, and you don’t have good data on the other side’s Wish List and CNA, it would probably be best to float the concept out there a little and let the market value it by opening first. Alternatively, you may have a product or service that’s been available for some time with a well-established selling price, and have good data on the customer’s Wish List, the costs and benefits associated with their CNA, and the resultant Gap. In that kind of situation, it would be appropriate for you to open so you can anchor first and marginally better than their CNA, and on as many trades as possible. Ultimately, doing so will allow you to claim most of the Agreement Zone.




Strategic Negotiation. A Breakthrough Four-Step Process for Effective Business Negotiation
Strategic Negotiation: A Breakthrough Four-Step Process for Effective Business Negotiation
ISBN: 0793183049
EAN: 2147483647
Year: 2003
Pages: 74

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