1.

UNDERSTANDING
NEGOTIATIONS
– KEY CONCEPTS
Bucharest, February - March 2022
 FINAL GRADE

• 80 % exam
• 20 %
• participating at class activities
• individual activities & presentations
• group presentations
 WHAT IS NEGOTIATION?

Encyclopaedia Universalis, 2004

• the process by which two or more parties interact in order to reach an acceptable
position compared to their initial divergent positions.

Zartman, 2008
• the process of harmonizing (combining) different points of view to achieve a
common understanding. More precisely than the term of diplomacy, and broader
than bargaining
 WHAT IS NEGOTIATION?

Aquilar; Galluccio, 2007

• a decision process by which the negotiating parties harmonize their conflicting
interests with a mutually acceptable solution.
• Negotiating does not mean agreeing fully; it means promoting one's own
interests and trying to understand the interests of the other party.
• The negotiation process is thus an attempt to reach agreement on how to
manage interdependencies between the parties.

MIT
• the art and science of finding an agreement between two or more
independent actors trying to maximize their results
CONDITIONS FOR HAVING NEGOTIATION
• Existence of a conflict of interest / differences between parties;

• The aim to have an agreement between parties;

• Communication between the parties

• THE NEGOTIATOR'S DILEMA

 NEGOTIATION VS. BARGANING
• In English business literature, two different terms are commonly used to
designate the negotiation process: negotiation and bargaining.

• In many cases these two terms are considered synonymous, so

interchangeable. In other opinions, however, the two terms refer to different
contents:

• negotiation is the concept that describes the whole process, while

• bargaining refers only to the exchange of concessions during implementing

negotiation (e.g. making concessions on price in the case of business negotiations).
It's also called haggling
 THE DIMENSIONS OF THE NEGOTIATION
• ENVIRONMENT: political, • PLAYERS / PARTIES: • STRATEGIC OPTIONS:
economic, institutional, legal,
cultural, etc. • number of • cooperation or
negotiators conflict
• NEGOTIATIONS ISSUES, which • who they represent • offensive or
refer to: defensive
• personality type
• the objectives and the • firmness or flexibility
motivations of the partners; • interpersonal
relationships • long or short
• common interests; duration of
• conflicting interests; • ability to express negotiations, etc.
themselves;
• the nature and complexity of
the issues being negotiated;
• the ratio of forces etc. • EXPECTED RESULTS: agreement, blockade, rupture
 ENVIRONMENT
• Political / Economic: • Institutional / Legal: influences the progress and
• nature of political / results of the negotiations in three ways:
economic relations • it offers the legislation;
between countries; • influences the attitude towards compliance with
• political stability; the contractual obligations;
• type of political • reflects the diversity of institutional and legislative
regime; models in the countries of the world.
• national priorities in
foreign policies;
• Cultural: generally determines how people
• economic indicators belonging to different cultures:
• business environment • process and interpret information
• level of investments • make decisions
• economic measures • develop and follow existential and behavioural
etc. models.
 PLAYERS / PARTIES
• The negotiators act to fulfil the objectives that ensure the satisfaction of the
parties' interests.

• They are characterized by several aspects:

• the position they hold in negotiation: decision-making power, professional
competence, role in the negotiating team;

• personality traits;

• needs and mobiles in activity;

• cultural endowment: values, beliefs, options, etc


• CONFLICT vs. COOPERATION - a choice
between
• a confrontation-based orientation, when
each partner is trying to win causing the
other to lose
and
• a cooperation-based orientation, when
parties are trying to reach an agreement in
which each of the parties win ( win-win);
STRATEGIC OPTIONS
• OFFENSIVE vs. DEFENSIVE, that is, an
action plan by which
• one negotiator seeks to take the
initiative, to attack and "occupy
the ground”
respectively
• the other negotiator intends to
defend, resist and counterattack;

• "SHORT" negotiation vs. „LONG" negotiation - is an approach that refers to time, as a

rare resource of negotiation, the choice being made according to economic criteria, the
ratio of forces, but also considering cultural differences.
 EXPECTED RESULTS
• WIN-WIN • LOSE–LOSE
• each party win • both parties lose
• this situation allows good • an undesirable situation that may arise
relations between the parties; when both parties agree at a level
below their initial expectations for the
• to achieve such a result each simple reason they consider that
party need to adopt a solution to be the best they might get.
cooperative attitude, be
encouraged by the aim to reach • NO agreement / NO deal
a mutually satisfactory solution. • a solution which is required when a
satisfactory agreement cannot be
• WIN-LOSE obtained.
• one party wins against the other • basically, one of the parties renounces
the negotiation rather than accepting
• it is a result that indicates an an unsatisfactory or non-transposable
unequal force / power between agreement, yet retaining the option to
parties and a conflicting return to the negotiations afterwards, if
approach to negotiation new elements arise
PRISONER’S
DILEMMA
 EXPECTED RESULTS
• WIN-WIN • LOSE–LOSE
• each party win • both parties lose
• this situation allows good • an undesirable situation that may arise
relations between the parties; when both parties agree at a level
below their initial expectations for the
• to achieve such a result each simple reason they consider that
party need to adopt a solution to be the best they might get.
cooperative attitude, be
encouraged by the aim to reach
a mutually satisfactory solution. • NO agreement / NO deal
• a solution which is required when a
satisfactory agreement cannot be
• WIN-LOSE obtained.
• one party wins against the other • basically, one of the parties renounces
• it is a result that indicates an the negotiation rather than accepting
unequal force / power between an unsatisfactory or non-transposable
agreement, yet retaining the option to
parties and a conflicting return to the negotiations afterwards, if
approach to negotiation new elements arise
 THE CONTEXT
OF
INTERNATIONAL
NEGOTIATIONS
 MAIN STRATEGIES
(APPROACHES)
IN NEGOTIATIONS
THANK YOU!
2. COMMUNICATION
– KEY CONCEPTS
 WHAT IS COMMUNICATION?
Process of sending and receiving of messages

• Classic perspective – in Latin: “communication”, to share, to make common

• Scientific perspective – Claude Shannon: “communication” is the transmission

and reception of information

• Humanistic perspective – “communication” represents the “generation of

meaning” Erin Griffin: “communication” is sending messages in order to create
meaning

• Business communication
• Promotional communication vs.
• Contractual communication
 ARISTOTLE’S MODEL
OF COMMUNICATION

SPEAKER LISTENER
MESSAGE

• Designed for public speaking / oration

• Speaker in the centre of the communication process
• Speaker prepares a message for an intended audience
• Message is intended to have an effect - influence the audience
• Audience is seen to be passive and ready to be influenced by the speaker's
message
In other words, according to Aristotle a speaker sends a message to an
audience and the audience is affected by the received message.
 SHANNON WEAVER MODEL:
THE COMMUNICATION PROCESS
COMMUNICATION = a process of the "mother of all models”
transmitting and receiving
messages between two or more
parties (people), through which
they enter into relationships and
exchange information
KEY FACTS
• establishing a contact
between the parties;
• transmission and reception of
information
• the existence of a common
way of understanding messages,
so that they have meaning for
the parties
 SCHRAMM’S MODEL
OF COMMUNICATION, 1954
EXAMPLE
 COMMUNICATION IS ALWAYS
ABOUT…2 MAIN SKILLS:

1. Listening in a hectic world

2. Speaking to Influence Others
 1. LISTENING IN A HECTIC WORLD
- KEY ACTIONS:

1. Evaluate your need to listen

2. Manage noise (external & internal)
3. Have an open and curious attitude.
4. Manage the flow.
 KEY ACTION 1:
EVALUATE YOUR NEED TO LISTEN
Examples of criteria:
• The conversation has impact on our own priorities, objectives or needs
• The conversation has impact on others’ priorities, objectives or needs
• Opportunities to build relations
• The conversation maintains a good level of energy
• What are you listening is coming from a person you just can’t neglect
 KEY ACTION 2:
MANAGE NOISE: EXAMPLES
EXTERNAL: INTERNAL:
Machine noises Our own thoughts about various problems or
pressures
Conversations around
Our own biases, assumptions, or prejudices related
Electric noises to the topic of conversation
Music Our own biases related to the speaker
Microphone announcements Our own reactions to emotional words
interruptions from colleagues Our own reactions to the way somebody is talking
Phone Our own reactions to an unfamiliar accent
Trafic Having already our own answer, “no need to listen”
 KEY ACTION 3:
HAVE AN OPEN AND CURIOUS ATTITUDE: EXAMPLES
• Have a sincere non-verbal behavior
• Ask questions
• Use an adequate voice tone
• Use short affirmations to show interests and encourage the other to share
more
• Do not interrupt moments of silence for encouraging the other to answer
completely
• Confirm your understanding
 KEY ACTION 4:
MANAGE THE FLOW: EXAMPLES
• Suggest a time limit
• Decide a common objective
• Gently return the discussion to the desired path
• Close the discussion
 2. SPEAKING TO INFLUENCE OTHERS
- KEY ACTIONS:
1. Organize your thoughts.
2. Deliver your message.
3. Explore responses.
4. Request action.
 KEY ACTION 1: PLAN WHAT YOU SAY
• Set a goal:
• What actions do you want to take your audience after your speech?

• Understanding your audience

• What needs of your listeners you should take into consideration for getting their support?

• Think about what you will say

• What will you do or say to get your listeners attention?
• How will you formulate the main idea or recommendation of your speech?
• What evidence will you present to support your point of view? Benefits? Facts and figures? Authority?
• How will you summarize and request concrete action from your listeners?

• Anticipate reactions
• What concerns of your listeners can you anticipate? How will you respond to them?
 KEY ACTION 2: SEND THE MESSAGE
When I talk, I try to ...
• Establish a connection with listeners
1. Maintain proper eye contact
2. Avoid jargon that listeners may not understand
3. Smile when necessary

• Set an appropriate rhythm of speaking

1. Coordinate the rhythm of speaking according to familiarity of the listeners towards the subject
4. Take pauses to allow the listeners to process what it is said
5. Stay focused and keep up the pace

• Be convincing
7. Stand or sit down depending on the situation
8. Speak loud and clear
9. Modulate the tone of voice and volume to emphasize key points
10. Emphasize the important points of the speech with the right expressions and gestures
 KEY ACTION 3: EXPLORE REACTIONS
• Find out what listeners think, what questions they have, and what their concerns are
• Ask for feedback (e. g. “What do you think of this idea?”)
• Resist the urge to ignore, reject, or contradict the listeners' views
• Pay attention to non-verbal cues that indicate concern, disagreement, or insecurity (e. g. “I detect a certain
level of confusion regarding the last point. Let's clarify”)
• Ask questions to clarify concerns (e. g. “Which areas remain unexplained?”)

• Show that you understand and respond to what your listeners are saying
• Show interest for the audience's questions, concerns and views (e. g. “I appreciate your willingness to share
your views”)
• Clarify audience concerns and ask for consent (e. g. “So you think the proposal could have a negative impact
on quality. Right?”)
• Change what you plan to say and provide information and alternatives in response to questions and concerns
(e. g. “I think you have concerns about the process reviews. I'd like to tell you more about this”)
• Ask for suggestions on how to overcome a concern (e. g. “How can we make this idea work for you?”)
 KEY ACTION 4: DECIDE CONCRETE ACTIONS
• Ask your listeners what you want.
• Briefly summarize the key points (e. g. “As I said, the new system will increase productivity. I
suggest we test it for a few weeks”)
• Say exactly what you want to happen (e. g. “Can you read the proposal to give me feedback by
the end of the week?”)
• Say what you will do (e. g. “I will prepare a list of the specifications we need”)

• Decide upon the next steps

• Summarize the agreed steps, responsibilities, and follow-up meetings (e. g. “We'll meet again
on Tuesday to review the survey, and you'll bring me the names of the employees who will
complete the questionnaire”)
• Thank your listeners for their commitments (e. g. “I appreciate your willingness to test this idea”)
 TYPOLOGIES OF COMMUNICATION
a. Promotional communication
• Communication strategy of the corporation:
• Company communication
• Institutional communication (organizational)
• Brand communication
• Product communication

b. Contractual communication
• Face to face communication (Verbal, Para verbal and non-verbal)
• Communication by distance (letters, phone)
• On-line communication (virtual)
 INTERPERSONAL COMMUNICATION
• Transactional analysis (TA) -> developed in ‘50 by Eric Berne as a part of
social psychology = any transaction = exchange of stokes among partners
of a relation
-> analysis of verbal and non-verbal messages (simple communication – at
one level of personality vs. complex communication – at many levels of
personality

• Neuro-linguistic programming (PNL) = developed in ‘70 by Richard Bandler,

who studied the human being excellence rules, techniques, instruments
-> programming = applying behavioral programs for achieving desired social
results
-> “neuro” = interior, perceptions, way of thinking
-> linguistic = ways of communication, verbal & non verbal
 REQUIREMENTS FOR AN EFFICIENT
COMMUNICATION DURING NEGOTIATIONS:
• Know your business partner
• Send clear messanges
• Be flexible
• Keep in your mind the business objective -> the communication
objective -> settle an agreement
• Use interpersonal managing skills
THANK YOU!
 • International negotiation – diplomatic negotiation
International negotiation means dialogue between 2 or more parties/states with the
common joint to reach an agreement.

What kind of Dialogue? Power-based dialogue, as we talk about states, governments,

institutions

Who are the parties involved in the negotiation? States, institutions, states and non-state
civilian actors, as well as with anti-state actors, such as individual terrorists and terrorist
organizations

What kind of agreement? Conflict, power mgmt., values, business, international institutions
etc

• Diplomatic negotiation - dialogue btw countries in order to find a

mutually acceptable solution to a dispute by peaceful means.

• E.g.: 2 countries currently trading won’t start a war.

(Open Source Harvard Law School)

• Most common negotiated topics are business and conflicts

Why business? Because we need to trade in order to live and prosper.

Why conflicts? When we need trade/business and negotiation fails, then the conflict
probability increases.

• Triangle: business – negotiation – conflict

Again, remember the key principle: 2 countries currently trading won’t start a war.

International&Diplomatic negociation rules, tips & tricks

• Building a negotiation team:

- Seek familiarity, not friendship
- Diverse skills, assigning roles
- Technical/experts who will negotiate in advance with their counterparty

• Negotiating “behind the table”

- Very useful when your own team/institutions/political party does not support you.
E.g.: German reunification in 1990, Bush & Gorbaciov
- Cultivate back-channel relationships
- Avoid making statements that might inflame potential behind-the-scenes deal
• Overcoming cultural barriers / assumptions

• Very important: put yourself in their shoes!

• How to negotiate with difficult people / uncooperative

counterpart
- Communicate; never stop communicating, talking, chatting on several common
interest topics
- Advice: seek advice to a third party
- Clarify: avoid misunderstandings and unreal expectations

• Police / FBI negotiation techniques: “everything in life is a negotiation”

- Talk to me: building trust, I am a listener, an active and affective listener

- Patience: avoid jumping to conclusions
- Respect
- Calm
- Adaptability

• Closing the deal tips

- A sincere diagnose of the barrier

- Timing: reasonable deadlines
- No bluffing
- Be elegant and make your counterparty looking good; everybody should look good
after signing, because everybody should deliver to its own team/supporters

• Among the top international business/politics negotiation case studies:

The Iran Nuclear Deal (it’s about politics, nuclear security, business -
embargo, social – people – economic development)

• How to turn a Maybe into a Yes

- Change the team – bad casting happens

- Ask the counterpart to clarify their request, to make a more specific request
- If the effort is too big, abandon the talks and come back later
- Have a clear look at what is standing between you and the counterparts
- Make more concessions
Case studies:

Russia’s invasion war in Ukraine: politics, economic sanctions, oil&gas prices

negotiation (rubble vs dollars, embargo, trade etc)

Iran Nuclear deal

Books:
Diplomacy – H Kissinger & Kissinger the negotiator
Why Nations Fails – Acemoglu & Robinson
Th Piketty – Capital
Some pictures:

Negotiation table: Minister of Justice meeting European Commissioner for Justice

Romanian Minister of Justice meeting Italian Minister of Justice, discussing issues (behind
the curtain) before the final meeting of EU Ministers of Justice

Final meeting of EU Ministers

of Justice
 International Negotiations – case studies

1. Common charger within the EU: proposal to reduce electronic waste

Goals:

• Fewer redundant cables and chargers: good for environment and consumers
• USB Type-C port as new standard for portable device
• MEPs also want harmonization for wireless charging

Stakeholders involved in the negotiation: European Parliament & other EU institutions, EU

states, mobile phone producers & other devices producers.

Mobile phones, tablets, digital cameras, headphones and headsets, handheld videogame
consoles and portable speakers, rechargeable via a wired cable, would have to be equipped with
a USB Type-C port, regardless of the manufacturer. – Manufacturers involved in the
negotiation (lobbying and so on).

Exemptions would apply only for devices that are too small to have a USB Type-C port, such as
smart watches, health trackers, and some sports equipment.

When: by 2026

Why: help the environment, further help the re-use of old electronics, save money, and reduce
unnecessary costs and inconvenience for both businesses and consumers.

Apple, Samsung etc. – How are they dealing with this issue?

How? Once EU Parliament as a whole has approved this draft negotiating position at the May
plenary session, MEPs will be ready to start talks with EU governments on the final shape of
the legislation.

EU institutions – EU States – Manufacturers – Lobbying

International Negotiations – case studies

France24 News Channel: “The European Commission believes a standard cable for all devices
will cut back on electronic waste, but Apple argues that a one-size fits all charger would slow
innovation and create more pollution.

The bloc is home to 450 million people, some of the world's richest consumers, and the
imposition of the USB-C as a cable standard, once approved by member states and European
Parliament, would affect the entire global smartphone market.”

Source: European Parliament Website

2. IRAN NUCLEAR DEAL

Summary

Signed in 2015 by Iran and several world powers, including the United States, the
JCPOA placed significant restrictions on Iran’s nuclear program in exchange for
sanctions relief.

President Trump withdrew the United States from the deal in 2018, claiming it failed
to curtail Iran’s missile program and regional influence. Iran began ignoring
limitations on its nuclear program a year later.

Washington and Tehran have both said they would return to the original deal but they
disagree on the steps to get there.

ABOUT THE DEAL

The Iran nuclear agreement, formally known as the Joint Comprehensive Plan of
Action (JCPOA), is a landmark accord reached between Iran and several world
powers, including the United States, in July 2015. Under its terms, Iran agreed to
dismantle much of its nuclear program and open its facilities to more extensive
international inspections in exchange for billions of dollars’ worth of sanctions relief.

Proponents of the deal said that it would help prevent a revival of Iran’s nuclear
weapons program and thereby reduce the prospects for conflict between Iran and its
regional rivals, including Israel and Saudi Arabia. However, the deal has been in
jeopardy since President Donald Trump withdrew the United States from it in 2018. In
retaliation for the U.S. departure and for deadly attacks on prominent Iranians in
2020, including one by the United States, Iran has resumed some of its nuclear
activities.
International Negotiations – case studies

In 2021, President Joe Biden said the United States would return to the deal if Iran
came back into compliance. Renewed diplomacy initially seemed promising, but after
stop-and-go talks, it remains unclear if the parties can come to an agreement.

Sanctions relief. The EU, United Nations, and United States all committed to lifting
their nuclear-related sanctions on Iran. However, many other U.S. sanctions on Iran,
some dating back to the 1979 hostage crisis, remained in effect. They cover matters
such as Iran’s ballistic missile program, support for terrorist groups, and human rights
abuses. Though the United States committed to lifting its sanctions on oil exports, it
kept restrictions on financial transactions, which have deterred international trade
with Iran.

Weapons embargo. The parties agreed to lift an existing UN ban on Iran’s transfer
of conventional weapons and ballistic missiles after five years if the IAEA certifies
that Iran is only engaged in civilian nuclear activity.

The War in Ukraine impacting the Deal. – Russia – leverage – sanctions

International Negotiations – case studies

Negotiations table: John Kerry, US Secretary of State (Foreign Affairs) & Iran Foreign
Affairs Ministers, Mohammad Javad Zarif

Iran nuclear deal states

Source: https://www.cfr.org/backgrounder/what-iran-nuclear-deal
International Negotiations – case studies

Tip of the day:

One of the best tips in any negotiation, debate, discussion, situation:

In a negotiation (or, frankly, in any kind of debate), people generally don’t listen;
they await their turn to speak and make arguments. They believe that the only
way to convince their counterpart is to make their own case and to dispute
arguments raised by the other party.

But by failing to listen carefully and effectively, we lose important information, act on
wrong assumptions, and unnecessarily damage the relationship. Any negotiated
deals we reach tend to leave money on the table and jeopardize further collaboration.

Negotiators’ lack of real listening also means they are more vulnerable if their
counterparts employ difficult tactics against them. Difficult tactics may include threats,
lies, false claims about lack of authority or conflicting commitments, or a host of other
unpleasant behaviors that are intended to throw us off and curtail our bargaining
power. Faced with difficult tactics, we tend to have a constricted vision of our options:
giving in, retaliating, or walking away—none of which is conducive to a successful
deal.

Listening well—or active listening—empowers negotiators to take control over the

process.

Active listening involves repeating back to the other party what we have understood
their claims to be, inquiring further about the motivations or assumptions behind such
claims, and acknowledging their positions.

After doing so, we are then able to collect valuable information, test our beliefs and
assumptions, eliminate misunderstandings, and force our counterparts to account for
any difficult tactics they have employed. Active listening thus opens up a range of
options for a successful negotiation outcome.

Source: Harvard Law School Program on Negotiation

5. BUSINESS NEGOTIATIONS (1):
BUSINESS STRATEGY
 SKILLS OF BUSINESS DEVELOPMENT
The business development process, ordered chronologically, as it is in everyday reality,
consists of the following skills :
4. Opening 5. Connecting
3. Addresing Sales Call at human level 6. Probing (Asking
2. Prospecting Indiference
Questions)

1. Defining 7. Supporting
Business
Strategy 8. Addressing
Concerns
12. Growing the 9. Negotiations
Relationship
11. Contracting 10. Closing
Sales Call
 DEFINING BUSINESS STRATEGY
Products / Services :
STRATEGY What we offer? What is
the value we offer?

Markets / Clients:
To whom we offer our
products and services?

Competitive advantage:
Products / Markets / Why clients buy services
Services from us rather than
Competitive Clients
from others?
Advantage
 PHASE 1: CLARIFYING THE “VALUE” WE OFFER TO OUR CUSTOMERS?
Setting GOALS Identifying Evaluation of Choosing the Signing the IMPLEMENTING
and PRIORITIES OPTIONS OPTIONS BEST CONTRACT & MONITORING
ALTERNATIVE
Focus on PRODUCT/SERVICE

Focus on SOLVING the PROBLEM

Focus on ACHIEVING BUSINESS OBJECTIVES

VÂNZARE VALUE PROPOSITION: VÂNZARE

TRANSACTIONAL
TRANZAC ? IONAL? “Through our risk management solutions, we offer CONSULTATIVE
CONSULTATIV?
APPROACH you the best value for money” APPROACH
“ Ceea ce pl?te ?ti pentru un “ Ceea ceyou
“What crezi c? prime
think you receive ? ti
“Whatprodus
you paysauforuna serviciu
certain service“” VALUE PROPOSITION: pentru
forceea
whatce pl?te
you pay” ?ti ”
“Through our risk management solutions, we help
qq Termen
Short scurt
term you to leverage the risk” qq Termen
Long termlung
qq Reac ?ie
Reaction qq Rela ?ie
Relationship
qq Nevoi punctuale
Specific needs VALUE PROPOSITION: qq Nevoi complexe
Complex Needs
qq Pre ?
Price “Through our risk management solutions, we help qq Valoare
Value
you have the desired impact on your customers”
PHASE 2: UNDERSTANDING WHO ARE CUSTOMERS APPRECIATING
PRODUCTS / SERVICES WE OFFER? – THE 4BOX MODEL
Big
VÂNZARE
BIG CLIENTS / STRATEGIC CLIENTS TRANSACTIONAL
TRANZAC ? IONAL?
PROSPECTS APPROACH
“ Ceea ce pl?te ?ti pentru un
• Check your resources • Invest resources for produs sau un serviciu ”
“What you pay for a certain service“
Value for sales representative

• Be prepared to building a relationship

qq Termen
Short scurt
term
negotiate • Build a long-term
qq Reac ?ie
Reaction
• Pay attention to your development plan for qq Nevoi punctuale
Specific needs
profitability each client qq Pre
Price ?

“Not our priority today” SMALL CLIENTS / VÂNZARE

PROSPECTS CONSULTATIVE
CONSULTATIV?
APPROACH
• Don’t invest time or • Prioritize your clients “Ceea ceyou
crezi c? prime
“What think you receive ?ti
resources for these pentru ceea ce
for what youpl?te
pay” ?ti ”
clients • Invest time and
qq Termen
Long termlung
resources for closing
qq Rela ?ie
Relationship
the deal as sooner as qq Nevoi complexe
Complex Needs
possible qq Valoare
Value

Small Value for customers Big

 PHASE 3: DECIDING OUR APPROACH

1. Where do you
stand TODAY?

2. Where would you

like to be?

3. What is the best

approach?

4. What is feasible?
 CONCLUSIONS: TRANSACTIONAL VS. CONSULTATIVE (1)
TRANSACTIONAL SELLING
• Short interactions in which the customer requests a certain service and the sales
representative provides it.
• The sale focuses on the personal interaction, price and / or characteristics of the offered
service.

CONSULTATIVE SELLING
• A close and proactive relationship in which the sales representative tries to better understand
the client's needs and circumstances.
• The sales representative generates a higher perceived value together with the service he
offers.

The Great Divide that separates the two types of approaches represents the challenges of the
current sales process, including crisis, globalization and the growing demands of customers.
Sales representatives can constantly overcome these challenges by developing sales skills that
support consultative selling.
 CONCLUSIONS: TRANSACTIONAL VS. CONSULTATIVE (2)

KEY LEARNING POINTS:

• You can be financially successful in any type of these approaches (transactional or

consultative).

• The level you are in any of the 2 “mountains” from the Great Divide model is the way that clients
are perceiving you.

• There is no need to practice transactional selling before moving on consultative selling.

• Transactional selling makes you more vulnerable to many challenges, including crisis, aggressive
competition, globalization and price obsession.
 CONCLUSIONS: TRANSACTIONAL VS. CONSULTATIVE (3)

KEY LEARNING POINTS:

• Consultative selling
• requires more time and effort on your part.
• helps you become a differentiating factor in making the buying decision.
• helps you analyse the client situation and develop effective relationships with each
client.

• It is important to be able to make consultative sales - even if it is not advisable to make an effort
to become a Trusted Advisor with all customers.

• The Need Satisfaction Selling process is the starting point for all levels of consultative sales. The
further you go on the peak of the “consultative mountain” of the Great Divide model, the better
you master the Need Satisfaction Selling process.
 CONCLUSIONS: THE BEST APPROACH?
What the customers want?

Transactional

Sale
SALES
What What
sales reps. Sale Relation sales reps.
want? want?
Consultative

Relation
SALES

What the customers want?

 CUSTOMER NEEDS CONCEPTS

• Circumstances: Facts, events or conditions in the customer’s

environment

• Need: A customer’s desire to improve or accomplish something

• Need Behind the Need: The more important objective underlying the
need
THANK YOU!
6. BUSINESS NEGOTIATIONS (2):
PROSPECTING
 Purpose
PURPOSE
• provide you with a structured approach and a set of core skills to
enable you to prospect more productively

WHEN?
• after deciding the business strategy, the next step,
• before SALES & NEGOTIATIONS

3 KEY PHASES / SKILLS:

• PREPARE
• CONTACT
• ASSESS & IMPROVE
 Phase 1:
Prepare
PHASE 1: PREPARE

1.1 Analyze your flow of business

1.2 Find prospects
1.3 Identify business issues
1.4 Plan your approach
WHAT ABOUT
YOUR BUSINESS
DEVELOPMENT FUNNEL?

Negotiations, if the case! =>

 1. Targeting Prospects

2. Earning the right

Business 3. Analyzing Requirements

Development 4. Internal Analysis

Funnel / 5. Recommending Solutions
Pipeline: 6. Delivering / Implementing
example of
phases 7. Maintaining & Expanding
1.1 ANALYZE YOUR FLOW OF BUSINESS
• Meeting your goal relies on a steady flow of prospects
through your funnel.
• Regularly assess the movement of prospects through your
funnel to ensure your focus is balanced.
• Calculate how many prospects you need to contact weekly.
 Determine if you have enough leads;
source more as needed

Ask for names of those who

might benefit.
Ask for
Ask permission to use contact’s
referrals! name.
Ask about lead’s business issues.
1.2 FIND
PROSPECTS Gather complete information on your
leads, review leads to identify
prospects.

Prioritize prospects - Evaluate leads

against characteristics of your best
customers to identify prospects.
 1.3 IDENTIFY BUSINESS ISSUES
• Types of business issues:
• External conditions
• Organizational responses
• Functional challenges

• Identifying business issues helps you:

• Pursue a prospect that you can help.
• Capture prospect’s interest.
• Target industries/companies that
would benefit from talking with you
 TYPES OF BUSINESS ISSUES
I. External conditions
-> include: II. Organizational Responses
• Economy - >can be in response to external conditions and include:
• Competition • Corporate goals and objectives
• Costs • Reduction in operating expenses
• Political events • Strategic planning
• Environmental issues • Re-organization, downsizing

III. Functional Challenges

- > usually result of organizational responses to external conditions and include:
• Staffing
• Space utilization and planning
• Acquisition and use of resources
• Department budgeting
 It is important to qualify before the call

Your overall plan:

• Establish a goal.
• Adhere to a schedule.
1.4 PLAN • Prioritize your prospects.

YOUR Your prospect - specific plans:

APPROACH • Identify who to call.
• Strategize how to get in.
• Conduct research.
• Plan what you will say:
• To the prospect
• To the screener
 PHASE 2: CONTACT

Request
Action

Explore

• Engage Engage

• Explore
• Request action
 SKILL 1: ENGAGE THE PROSPECT.

Request
1. Greet the prospect and introduce Action
yourself.
2. Make a purpose/benefit statement Explore
(linked to business issues).
3. Gain agreement to continue.
Engage
 SKILL 2: EXPLORE BUSINESS ISSUES.
1. Use open probes to gather Request
information. Action

2. Listen and ask follow-up

questions. Explore

3. Acknowledge the prospect’s

feelings and point of view.
Engage
 OPEN PROBES:
• Open probes elicit more than a yes/no or short answer
• To be most effective, open probes should:
• Evolve from your purpose/benefit statement.
• Link to prospect’s business issues.
• Demonstrate you are informed on prospect’s business issues.

Acknowledge:
• You can acknowledge the prospect’s:
• Logic or point of view:
-“Of course. The ability to control costs plays a critical role in maintaining a competitive advantage.”
• Feelings about the situation:
- “It’s terribly frustrating to be treated that way.”
 SKILL 3: REQUEST ACTION.
Request
Action
1. Summarize the reasons for
moving ahead.
2. Specify the next steps. Explore

3. Thank the prospect for

speaking with you. Engage
 Ensures you are investing time in the right
prospects

After business issues are confirmed

QUALIFYING Might be done over the course of several

conversations
PROSPECTS
Qualifying Criteria Categories

1. Potential
-> Make sure you 2. Authority
qualify on criterias: 3. Resources
4. Time
 ADDRESSING INDIFFERENCE:
Common Reasons for Indifference:
• Don’t have time to talk (not a priority).
• Are satisfied with current situation
(competitor, in-house solution, fear of change).
• Don’t need to make changes (don’t see issues).

• Be prepared for indifference before you call!

• How you respond to indifference can
distinguish you from your competitors!
 ADDRESSING INDIFFERENCE:
• Steps for Addressing Indifference:
• Acknowledge the prospect’s indifference.
• Provide a reason to continue.
• Gain agreement to continue.

• Examples of acknowledge
• “I can appreciate that you are busy.”
• “I respect your position.”
• “I can appreciate that you are satisfied with your
current situation.”

• Avoid words like “but” and “however”!

• Maintain positive attitude regardless of outcome!
 WORKING WITH SCREENERS

Think of screeners as an extension of prospect.

Plan ahead – know what you will say.

Use the following model of steps :

• Introduce yourself and ask to speak with the prospect.

• If asked, state the purpose of your call.
• Ask for help in making contact with the prospect.
• Thank the screener for his or her help, time, and courtesy.

Remain courteous & positive, regardless of outcome.

Before making a call…
• Draft your voice mail message.
• Edit the message.
• Practice speaking the message.
USING
Voice Mail VOICE MAIL
• Plan voice mail message before calling &
prospect.
E-MAIL
• Practice message to ensure proper content,
tone EFFECTIVELY
E-mail
• Draft e-mail; keep it brief.
• Ask colleague to review and provide
suggestions.
• Keep up to date on spam filters, opt-in laws.
 PHASE 3: ASSESS
2 Levels of assessment:
Assess both:
• Individual prospecting calls
• Overall prospecting approach
to increase prospecting effectiveness.

Steps:
1. Track your calls
2. Assess your skill use.
• Review your strengths
• Identify best practices
3. Plan for improvement and set new goals
4. Practice!
THANK YOU!
7. BUSINESS NEGOTIATIONS (3):
SELLING
PURPOSE THE PAYOFF
To help you understand how to World-class sales professionals
build long-term, mutually beneficial score significantly higher than
customer relationships, one sales other salespeople in key
call at a time metrics, including:
• New account acquisition
KEY PHASES / SKILLS: • Average account billing
1. OPEN • Year-on-year existing
2. DISCOVER customer growth
3. SATISFY • Quota achievement
4. CLOSE
 CUSTOMER NEEDS CONCEPTS

• Need: A customer’s desire to improve or accomplish something

• Circumstances: Facts, events or conditions in the customer’s environment

• Need Behind the Need: The more important objective underlying the
need
 Customer Inventory: examples
CIRCUMSTANCES => NEEDS
Many employees
To increase employee
leaving company for =>
satisfaction
other opportunities
New competitor has To implement a new
=>
entered the market marketing campaign
Production costs
=> To reduce labour costs
continue to rise
=> NEED BEHIND THE NEED
To maintain consistent
relationships with
=>
customers
(PERFORMANCE)
To be known as a
supplier of the highest
=>
quality products
(IMAGE)
To reduce costs and
=> improve the margin /
profit (FINANCE)
SALES PROCESS APPROACH
COLLABORATIVE TECHNIQUES
• Listen

• Acknowledge

• Transition

• Confirm

• Check
 LEVELS OF LISTENING

Level 1: complete attention; careful listening

Level 2: attention varies from full to partial to none

Level 3: attention is elsewhere; not listening

 ACKNOWLEDGE
Show respect or empathy:
• Acknowledge customer needs
“Many of our customers have similar financing needs.”
• Acknowledge general customer statements
“I see. That’s a good point.”
• Acknowledge customer concerns
“I can see how you might think that we wouldn’t be able to deliver.”
 TRANSITION
Provide context for a statement or question:
• Transition to questions
• “So, I can be sure I understand your expectations, I’d like to hear
what you think about …”
• Establish links
• “Earlier you mentioned … I’d like to know a little more about that.”
• “We’ve covered a lot. Let’s take a minute to summarise what
we’ve agreed.”
 CONFIRM

Summarize what you’ve heard and verify that your understanding is

correct.
• “So, what you’re telling me is … Do I have that right?”
• “It sounds like you’re looking for … Have I got it?”
 CHECK

Determine if the customer understands or accepts what you’ve said.

• “Is that what you had in mind?”
• “Does that help answer your questions?”
• “What do you think?”
MUTUALLY BENEFICIAL COMMITMENT
A customer commitment that moves the sales process
forward in a way that benefits both you and the customer

Examples:

 Agree to a product demonstration.

 Sign a contract.
 Schedule a future meeting with other decision makers.
.........................................................................

WHAT MAKES A COMMITMENT

MUTUALLY BENEFICIAL?

 Value to you and the customer in making the commitment

 Helps both parties progress toward a mutually
beneficial outcome
 Moves the sales process forward as efficiently
as possible
 1. OPEN
Transition to your opening.

Agenda Propose an agenda.

Value State the value of the agenda.

Check for acceptance.

 OPEN: EXAMPLE
“When we spoke on the phone, you mentioned an interest in
equipping your organization with a state-of-the-art system.

Agenda
I suggest that we spend some time discussing the challenges
you are experiencing that led to the decision to upgrade.
Value Then I’ll be able to suggest possible solutions that would get
you the results you want.
Is there anything else you’d like to cover?”
 Indifference

WHEN DO
CUSTOMERS
EXPRESS
INDIFFERENCE?
.........................................................................

WHY ARE CUSTOMERS INDIFFERENT?

 Needs are already being met by:
• A competitor
• An internally developed solution
• Products or services you are already providing
 Need does not exist:
• No need to improve current circumstances
RESPOND TO INDIFFERENCE

Acknowledge the customer’s indifference.

Gain agreement to discover.

Gain
Agreement

Copyright MHI Global 2015. All Rights Reserved.

 RESPOND TO INDIFFERENCE:
EXAMPLE
I agree that it does not make sense to make
unnecessary changes. I wonder if we could briefly
discuss the way you currently organise projects.

Even though you’re satisfied with your current

Gain
Agreement supplier, we might find ways in which we could help
you at some point in the future. Would a few
minutes be all right?”
 2. DISCOVER

Build a clear, complete, mutual

understanding of the customer’s:

 Circumstances

 Needs

 Need behind the need

CLEAR, COMPLETE, MUTUAL UNDERSTANDING
CLEAR:
 The cause of a need (circumstances)
 Specifically, what the customer wants to accomplish (needs)
 Why the need is important (need behind the need)

COMPLETE:
 All the customer’s needs
 The priority of the needs

MUTUAL:
 You and the customer share the same understanding.
 OPEN AND CLOSED QUESTIONS
OPEN Questions: CLOSED Questions limit a response to:
 Encourage customers to  A “YES” or “NO”:
respond freely “Have you ever used an outside
research service?”
“What are you trying
to achieve?”  A CHOICE among alternatives:
“Tell me more about “Are you interested in leasing the new
computers, or do you plan to buy?”
that.”
 A single, often quantifiable, FACT:
“Why is that important?”
“How many field representatives do you
have?”
 CONFIRM A NEED
TO CONFIRM A NEED:
 Use a closed question that:
• Contains the language of needs
• Elicits a yes or no response

“So, it’s important to …?”

“Would it be helpful if you could …”
“It sounds as if you need… Am I right?”
 WHEN TO CONFIRM A NEED

 The customer has expressed a problem but has not used the
language of needs.

 The customer has expressed a need, but you want to be sure you
have a mutual understanding of it.

 You want to demonstrate that you understand the customer’s need.

 RESOLVE INDIFFERENCE
Build AWARENESS of unrealized needs by asking questions to:
Understand CURRENT circumstances.
What is the customer doing now?

Identify opportunities to IMPROVE circumstances.

What, if anything, isn’t ideal about the current situation?

Discuss CONSEQUENCES of current circumstances.

What is the risk of continuing with the current approach?

CONFIRM a need.
Does the customer want to take action to improve the situation?
QUESTIONS TO CREATE AWARENESS
OF UNREALIZED NEEDS
 3. SATISFY
.........................................................................

Acknowledge the need.

Features
Benefits Describe relevant features and benefits.

Check for acceptance.

.........................................................................

WHEN TO SATISFY
 The customer has expressed a need.
and
 You both clearly understand the need.
and
 You know how your product and/or organisation can address the
need.
.........................................................................

ACKNOWLEDGING VERSUS CONFIRMING

 Acknowledging a need:
• A statement
• For the customer
• Shows respect or empathy

 Confirming a need:
• A question
• Ensures you understand the customer’s need
 .........................................................................

SATISFY: EXAMPLE
“Having accurate information about your competitors is
critical to your ability to plan your product strategy.

Our researchers will gather and analyze information about

Features
Benefits your competitors’ products. This will help you develop
targeted, competitive strategies that increase your market
share.

Is that the kind of help you’re looking for?”

 CUSTOMER CONCERNS
o SKEPTICISMS: The customer doubts your ability to provide the features and
benefits you say you will: “It’s hard to believe the product will last as long as you
say it will.”

o MISUNDERSTANDING: The customer thinks you cannot provide features or

benefits that you can actually provide: ”I only work with companies that provide
round-the-clock service.” (The customer does not know you provide 24-hour
service.)

o DRAWBACK: The customer has a need you are unable or unwilling to meet:
“Your manual is only available in English. I need it in three other languages as
well.”
 RESOLVE CUSTOMER CONCERNS
Discover
Discover

Acknowledge the concern

Resolve Resolve the concern

Check for acceptance

 RESOLVE SKEPTICISM

Offer relevant PROOF:

• Referrals
• Demonstrations
• External research

Example: “I’d be happy to provide you with the names of

customers who’ve implemented the system. I’d expect them to tell
you that they’ve seen savings of 15 to 25 percent”
 RESOLVE A MISUNDERSTANDING
Provide accurate information:
• Explain the correct feature.
• Ideally, include a relevant benefit.

Example:
”Our service desk is open 24 hours a day, seven days a week, so
any problems that arise at night or over weekends can be
resolved right away, minimizing downtime.”
 RESOLVE A DRAWBACK
 Refocus on the bigger picture.
 Outweigh with previously accepted benefits.
Example:
“From what you’ve told me so far, there are other aspects of this
implementation that are also important to you. Let’s consider
everything together. Our technicians will work with yours to ensure
that the integration with your current system is seamless, resulting
in uninterrupted work for your employees. We also discussed how
24-hour support will provide your staff with access to experienced
help at all hours, so that software issues can be resolved without
delay.”
.........................................................................

CLOSE
Transition to your
close.
Commitment Propose a mutually beneficial commitment

Check for acceptance.

 TRANSITION TO YOUR CLOSE
.........................................................................

 Review accepted benefits: “As we discussed, our market analysis will enable you
to segment your market more effectively and target your advertising accordingly.
Our focus group research will clarify the most important features to your
customers and allow you to make product development decisions that will result
in improved sales and increased market share.”

 Suggest it’s time to wrap up: “We’ve covered a lot. Let’s take a few minutes to
wrap up and confirm the next steps.”

 Highlight something positive about the customer, you or your organisation

or the sales call: “Thanks so much for sharing information on your challenges. I
believe I have all the information I need to develop a solution that will deliver the
value you are looking for.”
 CLOSE: EXAMPLE
.........................................................................

“As we discussed, our market analysis will enable you to

segment your market more effectively and target your
advertising accordingly. Our focus group research will clarify the
most important features to your customers and allow you to
make product development decisions that will result in
improved sales and increased market share.
Commitment
As a next step, I’d like to prepare a full proposal for your review.
If that makes sense, I’ll ask you to coordinate a time when I can
Commitment

present it to you, your CEO and other colleagues who would

contribute to the decision.
Do those next steps make sense for you?”
WHERE MIGHT NEGOTIATIONS OCCUR?

Negotiations?
THANK YOU!
8. BUSINESS NEGOTIATIONS (4):
PLANNING AND CONDUCTING
NEGOTIATIONS
 Purpose

PURPOSE:
To help you – once you’ve
identified the other business partner
needs and priorities - understand
how to negotiate successfully
DELIVRABLES, PRICE, TERMS and
CONDITIONS to achieve a win-win²
agreement
 3. PREPARING 5. LEADING the
for business business
negotiations 4. INFLUENCING and negotiations
2. Negotiation developing
STRATEGIES the right ATTITUDE
1. What is
BUSINES in negotiations
NEGOTIATION?

KEY NEGOTIATION SKILLS

1. What is BUSINESS NEGOTIATION?
▪ It’s NOT JUST selling
▪ It’s NOT JUST procurement
▪ It is NOT JUST influencing
▪ It’s NOT JUST 2 ways of acting
(“internal” clients vs. “external”
clients)

But... what is business negotiating?

The way we eliminate the
DIFFERENCES between
what you want and what the
other business partner
want in order to conclude
an AGREEMENT
 Understanding sales negotiations

• CUSTOMER COMMITMENT – Agreement to pay a price, in return for deliverables, under

specified terms and conditions

• SALES NEGOTIATION – Process by which differences in price, delivrables, and terms &
conditions are resolved in order to gain customer commitment

• SUCCESSFUL NEGOTIATION – A win-win² agreement that satisfies the customer, the

salesperson and sales organization
 Variabiles of negotiation
• WHAT do you negotiate?
• How flexible are you
regarding:
o Deliverables
o Terms and conditions
o Price
Negotiating is the process by which you:
• Resolve differences in deliverables, terms and conditions, and/or price.
• Transform conditional negotiations commitments into final
commitments.
Transactional Negotiation WIN - LOSE
• An agreement outcome in which one side in a negotiation
gains at the expense of another
• Only one of the parties comes to gain;
• There is a risk of giving up too much to speed up the
conclusion of the negotiations;
• It can lead to negative results for the organization,
especially in the long run;
• Competitive approach based on short-term gains;
• It may be useful for situations where the long-term
relationship with the other party involved in the
negotiation is not important or the subject of the
negotiation is of relatively low value and importance;
• Negotiation time is usually lower than in consultative
negotiation.
 Consultative Negotiation WIN - WIN
• An agreement outcome in which all parties – both seller / supplier and buyer - perceive that
equal value is gained from an exchange of variables;
• Collaborative approach;
• Both parties consider the final agreement a success;
• It focuses on solving problems and developing strategies together with all other party involved in
the negotiation: seller/supplier, buyer, theirs colleagues (“internal” clients), etc.
• Keeps a comparable value;
• The negotiation time is sometimes longer than in the case of transactional negotiations
• It is useful especially in negotiation situations involving complex agreements with many
variables;
• Have positive impact for all parties involved in the negotiations;
• All parties understand that the value in a bargaining is obtained from a mutually beneficial
exchange of variables (e.g. deliverables, terms and conditions, price, etc.)
 Preconditions for WIN-WIN Negotiations
• Mutual trust • Meeting the needs of both parties

• No negotiation can be mutually • Both sides believe that the

advantageous if any party is success of the negotiation is
only interested in maximizing its generated by meeting the
own gain against to the other important needs for both players
 Negotiating is challenging
• Apart of business cases, whether it be over
priorities, activities, money or other resources,
everyone faces situations in which they must
negotiate with others within their work environment

• In BEST cases negotiations result in the identification

of solutions that meet the needs of both parties
(superior solutions), more positive interpersonal
interactions and a great productivity

• In WORSE cases negotiations lead to one-sided, or

inferior decisions, destroy relationships and
disrupt productivity
2. Negotiation STRATEGIES
HIGH

ACCOMMODATING CONSTRUCTIVE
Integrating, Collaborating,
Obliging, Smoothing, Openly
Problem Solving, Win-Win
Subordinating

Concern for the COMPROMISING

RELATIONSHIP

WITHDRAWING FORCING
Avoiding Competing,
Dominating

LOW Concern for the HIGH

OUTCOMES
3. PREPARING for business negotiations
▪ It is the negotiation phase with the greatest impact on the final result
▪ At this phase of the negotiation process, parties define their negotiation
parameters, interests, limits, strategy and type of approach: consultative, or
transactional.

THEY US
To increase the chances of a win-win agreement, a considerable amount of
time is devoted to understanding and preparing the negotiation
 When to negotiate?
▪ Leading negotiations should be a small part
of your time, as long as they are prepared,
implemented at the right time and effectively
conducted.
▪ One of the first conditions for an effective
negotiation is to negotiate at the right time.
▪ If you negotiate too early the risks are:
• to negotiate with people /
organizations that do not meet your
criteria (do not qualify);
• do not have enough information about
the people you negotiate with;
• do not have enough information about
the needs and priorities of your
internal clients.
It’s the right time for negotiations if…
1. As a prerequisite, you have already understood what your
colleagues / internal clients want and their motivation:
What? and Why?
2. You’ve scanned the market and have reached a short list
of potential business partners (buyers or suppliers)
3. You have proposed a concrete offer, or your partner
proposed you a concrete offer (e.g. deliverables, terms and
conditions, price)
4. You are clear about all the differences between your
position and the position of the other partner in negotiations
5. Gain a conditional commitment from other partner in
negotiations, so that if you find an advantageous solution to
“fill the gap” between the both parts requirements/positions,
the other is ready to conclude the negotiation and sign the
contract
6. You’ve already tried to overcome the other’s drawbacks,
highlighting what you offer in that deal is comparable with
what you can’t offer (the drawback itself)
 Insight
▪ Assess the other partners in negotiations and the
business facts
▪ Negotiation Players (Who is involved?) – title /
organizational responsibilities; role in negotiations;
authority in decision taking; negotiation style; what
motivates them (e.g. issues, pressures, etc).
▪ Negotiation Parameters:
• The WHAT of needs (for Must-Have Needs and
for Would-Like-to-Have Needs)?
• The WHY of needs, as well as their priorities
• What constitutes a “WIN"?
• What is the WALKAWAY position?
▪ Plan to TEST your assumptions regarding negotiation:
• Needs?
• Flexibilities?
• Feasibility?
 How to ANALIZE SITUATION

▪ Identify the other motivations and objections to your initial proposal

▪ Identify your motivations and objections to the implied other part counterproposal

▪ Describe a win-win² agreement:

• the other part WIN (organization and person)
• your organization WIN and your WIN, as negotiator.
 Strategy of NEGOTIATION

• DIFFERENCES • GOALS • ALTERNATIVES • DEFINE PLAN

• Define DIFFERENCES • Set negotiation • Agree on • PLAN your approach

between the initial GOALS: ALTERNATIVES for and take into account
proposals of both ▪ for solving each ▪ Which differences
parties: relationship difference identified will you address
▪ What was you ▪ for at the beginning of first?
initially proposed? negotiation / ▪ Which alternatives
the process
▪ What is your transaction will you propose
proposal? first?
 From initial proposals towards
COMPARABLE VALUE exchange
 How to develop alternatives

• Identify variables
• Generate alternatives
• Evaluate alternatives according to how well they satisfy
• your negotiating partner
• you and your organization

4 Alternative of negotiation
• Trade off (exchange)
• Adding an enhancement
• Splitting the difference
• Concession
• walk away
Negotiating Alternatives
When to use?
• Anytime – the best choice for a win-win²
agreement
• No flexibility to meet customer need
• Unimportant difference – to expedite
resolution
• Trivial difference at end
• One or more parties will lose
 TRADE OFF (EXCHANGE)
The seller offers the buyer what it needs, and, in exchange, it receives something of a similar value. By
this exchange, both parties maintain the balance of the initial offer.

During an exchange process, two or more aspects of the initial offer are involved. For example:
- If the difference is about price, both the price and the products/services can be changed. The seller
can reduce the unit price if a larger volume of products is ordered;
- If the difference is about shipment date, the seller shall change both the shipment date and the price.
The seller can accept faster delivery on the condition the price is increased. This increase is
generated by higher shipment costs.
 ADDING AN ENHANCEMENT
To add an enhancement means that the seller increases the value of the initial offer. By offering
something extra, the seller makes more steps to reach the final agreement. Ideally, it should be a low-
cost element for the seller with a high added value for the buyer.

Usually, the seller changes the initial offer once and the amendment is not related to the difference.

This method stimulates creativity and extends the negotiation area, making both parties think of several
solutions.
 SPLITTING THE DIFFERENCE
When two parties share the difference in a negotiation process, they meet halfway, making an
acceptable compromise between the initial offer and the requests of the other party.

Frequently, the difference shall be equally shared between the two parties, but it is not mandatory.
 CONCESSION
To make a concession means to offer the other party what it expects without asking for anything in
return. The exchange and value-adding activities are win-win solutions (each party concludes a
mututally beneficial agreement).
 WALK AWAY

• When none of the alternatives leads to results.

• Each of the party involved in a negotiation process can cope with situations when one party’s needs
are not compatible with the other party’s needs. If it is the case, the repective party can withdraw from
the negotiation process. It shall be concluded no agreement in order for neither of the two parties to
lose.

• Walk Away shall not be perceived as a negative action and it shall not be an impediment to do
business together in the future. Actually, the relationhip between parties shall be maintained in case
the transaction is not concluded for the moment.
 Agree on alternatives
Initially, GENERATE possible alternatives.
▪ What are several TRADE-OFFS you might make for each
difference?
▪ What ENHANCEMENTS are you prepared to add for customer
needs you cannot meet?
▪ Is there a difference of low importance to you where SPLITTING
THE DIFFERENCE would expedite a resolution?
▪ If you make a CONCESSION on any of the differences you have,
what impact will that have on your negotiation goals?

Secondly, EVALUATE the alternatives with win-win criteria:

▪ Do you have enough alternatives that fall in the win-win² boxes of
the Alternatives Evaluation Matrix (see next slide)?
▪ Will any alternatives violate the walkaway positions?
▪ What combination of alternatives will guarantee a win-win²
agreement?
Alternatives
Evaluation Matrix
 • Identify the other negotiator enhancements

• Identify acceptable combinations of alternatives

• Establish a walk-away position

How to optimize
• Identify benefits to emphasize
the outcome?
• Identify assumptions to test
4. INFLUENCING and developing the
right ATTITUDE in negotiations
Starting from the premise that each of us communicates
with others using one or more behavioral types, the
development of a win-win² mentality is essential to
planning and conducting constructive negotiations.
Taking all these into account:
▪ relying on our positive intent
▪ understanding the most important psychological need
of others and becoming aware of their personal profile
and
▪ using the various influencing / persuasion
techniques
we will use those behaviors that help us in planning and
conducting constructive negotiations, maximizing chances
of obtaining a win-win² agreement.
Mindset Assessment
Assess and Improve your Mindset

To ASSESS your mindset:

• Complete the Mindset Assessment.
• Ask yourself:
• Am I feeling confident?
• Am I able to walk away?

To IMPROVE your mindset:

• Identify and improve your no-deal options.
• Prepare for counterproductive behavior of others.
The 5 SCARF psychological needs
Status Fairness

Certainty Relatedness

Autonomy
 Status
• The need to be respected
and to be top / first /
performer / winner
• Watch out for opportunities
• Appreciates recognition
• Accepts challenges
• Appreciates competition
Certainty Autonomy
• It is based on tested • Wants to be on the
approaches "pilot seat“
• Prefers planning in advance • Does not accept fixed
• Prefers to avoid the risks fees and rules
• Does not like the unexpected • Needs to be his/her
changes own judge and make
• Needs precise clarification of decisions
roles, steps, expectations independently
 Relatedness
• It is open and responsive to
the needs of others
• Concerned about the impact
of change on people
• Needs empathy and
reciprocity in dealing with
others
Fairness
• Prefers that everyone
contributes equally and obeys
the same rules
• Has aversion to breaking a
system's rules
• Disturbed by any favoritism
Principles of influencing
Liking
Reciprocity
Social Proof
Consistency
Authority
Scarcity
 Principle of LIKING
People are easily persuaded by other people that they like.
Physically attractive people are more persuasive, being seen as
more as kind or intelligent, called “the halo” effect.
People are more likely to be persuaded by you if they like you.
So be nice in arguments (and in life, it’s short)!

Techniques:

• Use similarities and praise

• Emphasize the merits of others
• Discover common interests from the beginning to create links
 Principle of RECIPROCITY
Give first what you want to get. People tend to return a favor,
thus the abundance of free samples in marketing

Positive perspective - Rewarding services

Negative perspective - An unpleasant sense of indebtedness
Additional positive perspective - Obligation to make concessions to a person
who has made you one

Techniques:

• Provide help sought by the other before asking for something

• When you are refused, react positively and propose something else
• First prove the behaviors that your client would want to prove
Principle of SOCIAL PROOF
People, being socially fine, follow the example of others.
People will do things that they see other people are doing

Techniques:

• Identify people or groups with whom the others identify themselves and give
them as example
• Use relevant statistics « Number Strength »
 Principle of CONSISTENCY
People align with their own commitments, wanting to be
consistent with themselves.
If people commit, to an idea or goal, they are more likely to
honor that commitment, even if it no longer makes sense to.

Techniques:

• Make sure the others takes a public position

• Determine others make a commitment aloud and with their own words
• Convince others make a written commitment
 Principle of AUTHORITY
People lean towards expert opinion - expose your expertise, do not
assume it is obvious.
People will tend to obey authority figures, even if they are asked to
perform objectionable acts

Techniques:

• Build your credibility through figures, titles, and diplomas

• Build your credibility by exemplifying your expertise – successfully resolved
cases
 Principle of SCARCITY
People want more what they can get less.
Perceived scarcity of a product makes consumers want it more.

Techniques:

• Suggest the other unique opportunities

• Use "Loss Language" - only, up to max in....
• Emphasize what the other may lose if he does not use the opportunity, not just what he
may win
• Highlight the competition, if any
 5. Leading business negotiations

5.1 POSITION 5.2 Resolve 5.3 Secure Final

the Negotiation DIFFERENCES AGREEMENT WIN –
WIN²
• Frame the • Define the • Summarize
negotiation difference the new
• Establish the • Exchange proposal
agenda alternatives • Highlight the
• Gain benefits
provisional • Clarify steps to
agreement finalize an
agreement
 5.1 POSITION the negotiation
To establish clarity, structure, a positive atmosphere and
provide context for the negotiation conversation:

• Frame the negotiation • Establish the agenda

• Tips for restating the proposal and • Tips for defining the topics of
concerns: discussion and the order in which
▪ Briefly review summarize the they will be covered.
history of the negotiation to date
▪ Express your own concerns
▪ Confirm the other part regarding the other part
concerns/objections
▪ Emphasize the benefits to other proposal (or vice versa,
part of reaching a win-win check the other’s concern, if
agreement the case)
▪ Highlight the areas of ▪ Confirm that no new
agreement in your proposal and concerns have come up.
the other parts’ needs they
satisfy.
Position the Resolve Secure Final
Negotiation Differences Agreement
 5.2 Resolve DIFFERENCES
To identify an acceptable alternative for resolving each difference

• Define the difference • Exchange alternatives • Gain provisional

agreement
▪ State the WHAT and ▪ Use hypothetical questions ▪ Confirm acceptability of

alternatives
WHY of your needs. to check general interest / idea the resolution (“If…

Test your
(What if..) then…”)
▪ Clarify / confirm the ▪ Propose a specific alternative
WHAT and WHY of the once the other shows interest ▪ Put it aside as a viable
other needs. option rather than

other to offer
suggestions
Invite the
▪ Seek mutually beneficial committing to it.
ideas
▪ Continue to resolve
▪ Collaborate on new additional differences
alternatives.
alternatives
Discuss the
Impact of
▪ Emphasize the benefits
▪ Stress the difficulty

Position the Resolve Secure Final

Negotiation Differences Agreement
 Hypothetical Questions to Check
Interest and Test Alternatives
▪ What if we were to...? ▪ Would it help you if we were
▪ Would you consider...? to...?
▪ Suppose we could...? ▪ “Assuming we could…?”
▪ Would you be willing to...? ▪ ”What would you say if...?”

To progress successfully in a negotiation

Working
1. Acknowledge the impasse.
through an
2. Establish reasons for persevering.
Impasse
3. Suggest a temporary change of pace.
 5.3 Secure Final AGREEMENT
To bring closure to the negotiation
• Summarize the new • Highlight the benefits • Clarify steps to finalize
proposal an agreement
▪ Refer briefly to the ▪ Make sure the other part ▪ Review actions required to
differences you views the outcome of the finalize the agreement, such
resolved. negotiation in a positive as cutting a purchase order
▪ Outline the revisions in light. or signing a contract.
a matter-of-fact way. ▪ Clearly describe how your ▪ Verify the other's
You are seeking new proposal meets both commitment to these action
confirmation of the parts needs not satisfied by steps and the entire
changes, not asking the initial proposal. agreement.
permission to include ▪ Help the other truly feel that ▪ Be specific about. time
them. he/she has won. frames and commitments

Position the Resolve Secure Final

Negotiation Differences Agreement
 3. PREPARING
for business 5. LEADING the
negotiations business
4. INFLUENCING and negotiations
2. Negotiation developing
STRATEGIES the right ATTITUDE
1. What is
BUSINES in negotiations
NEGOTIATION?

KEY NEGOTIATION SKILLS

THANK YOU!