ISQA 454 Foundations 30 Second book

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From Last Week  Internal Negotiation  So Many Ways to Get From A to B  Often Two Sides Have Very Different Objectives  Whomever Mentions Price First….  How Much Time Exchanging Information?  Price May Be Very Different From Cost

From Last Week  Price Was Primary Focus  Memory of What Was Said/Agreed  Value of Information and Preparation  Influence of Future Cost Changes  Expect the Unexpected  Define Who Talks  Completeness of the Agreement

“We are all salesmen every day of our lives. We are selling our ideas, our plans, our enthusiasms to those with whom we come in contact.” Charles Schwab

5 Bidding Rules  Good Specifications  Sufficient Dollars  Sufficient Bidders  Sufficient Time  Bidders WANT Business  If Any Missing, May Be Better to Negotiate

Rules for Any Group Activity  No Negative Comments  No Judgmental Comments  Put Objections in Form of Question

The Negotiating Process  Recognizing Opportunities  Recognizing Situational Issues  Negotiation Planning  Conducting the Negotiation  Analyzing Results

Examples  Time Share Condo  Buying a New Car  Golf Course  MBA Class Exercise

Situational Issues  Gender  Participant Age  Cultural Issues  Money  Personality Type  Information  Leverage  Authority  Credibility  Education

Good Negotiator  Thoughtful  Communication Skills  Analytic Skills  Impersonal  Patient  Objective

Good Negotiator  Tactful  Knowledgeable  Good Judgment  Leadership  Inquisitive  Self-Confident  Experience

Power  Legitimacy  Commitment  Knowledge  Risk-Taking  Time  Preparation and Effort  Competition

Power  Money  Size  Image  Association  Reward Power  Punishment Power

Supplier Advantages  Proposal Knowledge: Cost, Profit  Motivation  Measurable Goals  Time  Training  Product Knowledge  Market Knowledge: Supply, Yours  Supplier Knows You  Negotiation Experience

Ten Biggest Negotiating Crimes 1. Inadequate Planning Time 2. Weak Information Gathering 3. Failing to Negotiate Internally First 4. A Rigid Mindset 5. Giving Concessions Too Early

Ten Biggest Negotiating Crimes 6. Responding Too Quickly to Each Demand 7. Not Calling Time-out 8. Not Putting Yourself in the Customer’s Shoes 9. Letting Egos Interfere 10. Inattentive Follow-through Source: Kellar, Sales Negotiation Skills That Sell, Amacom, 1997, pp

Internal Negotiation Opportunities  Engineers  Specifications  Industry Standards  Sole Source Suppliers  Project Timing  Back Door Selling  Look for Others

Internal Negotiation Opportunities  Users, Other Internal Customers  Use of Contracts  Specifications  Complete Details  Needs vs Wants  Price/Budget  Services  Delivery Timing  Back Door Selling  Look for Others

Internal Negotiations  Importance of Internal Relationships  Credibility  Jargon  Technical Skills  Ask Questions  Improve Knowledge  Clarify  Show-off Opportunity  Look for Lots of Alternatives

Keys to Internal Negotiation  Preparation  Personal Knowledge  Focus on “We”, Not “I”  Three Team Rules  Pick Your Fights

Traditional External Negotiations  Focused on Price  Often Win-Lose  Often Adversarial  Distributive Bargaining  Integrative Bargaining

External Negotiation: New Supplier  Terms of the Business Relationship  Performance Expectations  Performance Measures  Price  Price Change  Technology  Other Issues

External Negotiation: Existing Supplier  Long Term Relationship  Performance  Collaborative Cost Reduction  Price Change  Problem Solving  Collective Opportunities

External Negotiation: Customers  Long Term Relationship  Services  Delivery Timing  Price/Budget  Collaborative Cost Reduction  Collective Opportunities  Others

The First Three Laws of Negotiation 1. Everything is Negotiable (Except Principles and Integrity) 2. If You Don’t Ask – You Don’t Get 3. Never Say “No”, But Put a Price on “Yes”.

Getting Your Point Across  Time Constraints  Attention Span  Define the Objective  Who’s the Right Person  Know Your Target  The Right Approach  The Hook  REALLY Know Your Subject  If You Don’t Ask, You Don’t Get