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Three Persuasion Techniques that 95% of Good Negotiators Don’t Do – and Should

Three Persuasion Techniques that 95% of Good Negotiators Don’t Do – and Should
Daniel Weiser (MBA, LLB)*

It was close. We were almost taken by a very good negotiator, but in the end we managed to secure a great deal.
My client Mark was the VP Sales for the local subsidiary of a multi-billion European conglomerate, and he was facing a once-in-a-carrier sales opportunity. One of the local telephony service-providers was rolling out a new network (a “greenfield” project), and Mark was heading the negotiations with them to supply parts of the network.

After the initial “sales” meetings, pre-sale and field-testing, it was time to get down to the numbers. The service provider’s CIO (Chief Information Officer), who was in charge of the project, sent Mark an email saying that “after we have reviewed other candidates, Benny, our VP Procurement and Supply Chain, will contact you.” It was clear that my client was facing, simply put… a negotiation.
My client knew that his company’s services were 25% more expensive than the competition, but in terms of quality – they delivered 100% more. Our strategy was “positioning” or "re-framing" – to influence the way Benny perceived the company’s service, and to differentiate it from the market-price benchmark . Benny argued that there was no real difference between the competing offerings, while Mark said that Benny was comparing apples to… frogs.

Since we felt that we weren’t “at the end of the fourth quarter of the game”, Mark refused Benny’s requests to lower the price. He reverted any request to lower prices back to Benny’s home court: “Just like your company is a market leader in your field, so are we; and just like you charge a margin over the competition due to your better service – so do we”.

After several weeks of discussion, plus additional “internal thinking” – which we anticipated as a power tactic, Benny called Mark. He said that he had done “some serious internal persuasion” and “barely succeeded" (yeah right…) to convince his boss, the CFO, to meet my client the following week. “It will all boil down to pricing”, he ended the conversation. Money-time.
It turned out, that this was all part of Benny's set-up of a very effective bargaining tactic: the "Cord Pull". You let the other party bath in the light – until you pull the electricity cord. Lights-out.

The day before the meeting, Benny called Mark. He was very convincing when he informed that the CFO reconsidered, and that “if you don’t go down on your pricing now, by at the end of this phone call,” he said “the meeting is off, and so is the deal”. Mark knew about the Cord Pull and what he should have done, but still was caught off-guard. After envisioning his dream-deal and eight months of work go down the drain, he panicked and immediately lowered the price by 10%. He didn’t even get a counter-commitment; meaning, by lowering the price, he will get the deal. Benny replied that he would reinstate the meeting with the CFO, but it will be by phone(!), take 30 minutes (!!), and that Mark should be aware that he still needs to reach the benchmark price (!!!).

So there we were, with eight months of negotiations all boiling down to the 30 minute call that would make this deal or break it. How do we convince the client to pay 11% above his market-price-benchmark? This is a question that many vendors, who offer a better product than the competition, often ask themselves.

Persuasion in a negotiation setting is based upon three foundations: personal relations (the other party should gain trust in us), power (the other appreciates us as a valuable partner) and perception of profit (the other considers it in his best interest to accept our solution). These are the "3P's" of persuasion – Personal, Power and Profit. One can’t earn that extra margin – if his customer doesn’t host those three thoughts (or feelings). So we prepared a detailed “persuasion plan”, including the “nego-chess” of how the conversation could develop. We used about ten different persuasion tools – you can never persuade in such cases using only one tactic, but here we will address three.

Mirroring: a "personal relationship" builder, in which we express the way the other party sees the situation. Mirroring is a great way to open meetings. Often, only if the other party sees that we understand his point of view – will he listen and “allow” us to persuade him. So instead of going straight into an argument, Mark started with this: “If I understand correctly, you consider your internal benchmarking as the right criteria for pricing”. One could argue, that such a tool is dangerous, possibly “anchoring” the other’s position. It is our experience, however, that mirroring establishes a required degree of trust – which is what happened. In the conversation about their benchmark that developed, the CFO agreed that the company's offering was not "standard" in key features. He also mentioned that it was conceivable that the benchmark should not apply.

Profit Visualization: as deal-making is always about a future solution, with this technique we cause the other party to visualize our solution. Had we more time, and a face-to-face meeting, we would have asked the CFO and Benny that they would do the visualizing. But in this case we had to do it ourselves. Mark said: “It is your expectation that we perform such-and-such activity (detailing the service – with them replying “yes”), and deliver this-and-that functionality (in detail – “right”), and this is expected to enable your company to generate new revenue streams estimated at xyz thousand dollars per month ("we're on the same page", they replied). This part took several minutes in which, note, we were discussing their interests; getting them excited about the picture we jointly portrayed. This is a “Profit" tool.

"Help" the following internal negotiation: we often negotiate with a certain manager, who agrees with us, but then he needs to internally persuade others in the organization, usually higher in position. This is usually a weak link in the over-all persuasion plan. In this case it was clear that the CFO needed to consult with the CEO, which is kind of a negotiation in itself. We addressed that topic, and specifically suggested how to present the matter to the CEO in terms of the competitive advantage and increased revenue that the service provider could achieve. Our discussion with the client about how to advance the deal, is a “Power” tool.

Mirroring, visualization and helping the following internal negotiation, are tactics that are applicable in practically any negotiation or persuasion setting. In this case, as mentioned, they were executed along with several other tools. We were relieved that the strategy worked: a week later, we were informed that the deal was ours. We didn’t receive our original margin target, but 11% above market price (the dreaded benchmark) was a good achievement too.

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My Valued LinkedIn Reader,
On a personal note, I am happy to inform that my second book on negotiation will be released soon, as an e-book on Amazon. The book will be called “Close Double the Deals at Double the Profit”, and it contains over 25 tips and tactics similar to the ones above. The tools are presented within real case studies, in the contexts in which we implemented them. The final chapter describes how we strategized them together in a great negotiation turnaround, on which we successfully consulted.

Among our clients are local subsidiaries of multinational conglomerates like Oracle, Intel, Ericsson, Net-App, TDK, Schneider Electric, Amdocs (the above case was with none of them…) and others, mostly in the high-tech field.

We believe that improving the way you negotiate can seriously improve your "bottom line". If you would like to be informed on when the book will be available, please invite me to connect on LinkedIn – http://www.linkedin.com/profile/view?id=34175326&trk=nav_responsive_tab_profile, and I'll send a ping when we'll publish.

Daniel

* About the Author
Adv. Daniel Weiser is the Founder and Managing Director of DealMakers – Negotiators International. Mr. Weiser acts as a negotiation consultant to multinational high-tech and commercial clientele, after serving as VP of Business Development at internet and optical networking companies. He led transactions of M&A, sales, technology transfers and cooperation, strategic suppliers and others worldwide. Author of "The Secrets of Negotiation – Deal Design and Management" (2010), Matar Publishing House. US born (1965), Mr. Weiser holds an MBA, LLB and BA in Psychology, from the Hebrew University in Jerusalem.