Tag Archives: Rebecca Stowe

Moving on from a “No”

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Senior Consultant Rebecca Stowe offers this advice on how to manage the dreaded “no” within a negotiation. Read what she has to say here…

Q. Sometimes, despite my best efforts to understand a customer’s needs and to come up with creative options, my counterpart rejects even my best offer and decides to go with our biggest competitor. What do I do when I am faced with a firm ‘no’ after ongoing attempts to come up with a deal that will be good for both of us?
Great question. You’ve described a very common dynamic in negotiations. The challenge is what do you do now? Should you just accept the rejection and not be too disappointed, knowing you haven’t agreed to something worse for you than your best alternative to a negotiated agreement (“BATNA”)? Or is there still scope for you to refine your options, or learn valuable lessons for future negotiations?

My advice is never let the negotiation end with a ‘no’. You may think the solutions you’ve suggested are the best ones to meet both of your needs, and often you will be right – but not always. It pays to check with your counterpart to find out why they’ve rejected your offer and what would it have taken to reach an agreement. Be sure to acknowledge their prerogative to walk away – if they give you a firm “no”, you want to be careful you don’t look like you refuse to take “no” for an answer. By acknowledging their right to say no, it makes it safer for them to answer your questions.

For example, you might want to ask, “Obviously we are very disappointed at not winning your business. Can you help me understand why you’ve decided to go with our competitor?” Or, “Can you help me understand what we would have needed to offer you for us to win your business?”

The answers to these questions will help you in three ways:

  1. You might find out that they have key needs/concerns that either you weren’t aware of, or perhaps ones that you assumed weren’t as high priority as others. Once you have this information, you may be able to re-open negotiations and put forward new solutions to meet these needs and as a result, win their business!
  2. You might find out that there was really no scope for you to create extra value without agreeing to something worse for you than your best alternative to a negotiated agreement. And in that case, you can confidently walk away from the negotiation knowing that you did everything you could to win the business. It’s important to recognise that sometimes it’s really better for both parties not to make a deal.
  3. The answer will also provide you with invaluable information about your competitor’s offering which may get you thinking about your product/service and what you could do to differentiate yourself in the market.

So next time you are faced with a “no”, make sure you follow up with some good questions. Great negotiators invest the time after the negotiations to review and reflect on the outcome and learn ways to improve for the future.

Good-luck!
Best wishes,

Rebecca Stowe
Senior Consultant

Agents aren’t necessarily adversaries

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CMA Senior Consultant Rebecca Stowe offers her advice in response to a recent query on a property purchase:

Q. I’m trying to purchase a house, which has been advertised as “private sale” by a real estate agent. The price the vendor has specified seems ambitious, and as a purchaser, I’m keen to pay as low a price as possible. While I know the agent’s priority is to represent the vendor’s interests, what can I do so that the agent will assist me in reaching an outcome I’ll be happy with?

Sometimes we make the incorrect assumption that agents are solely driven to represent and meet their client’s interests. Reality is, agents always have interests of their own, and in order for the agent to view your offer favourably and even support it, it’s critical you take into consideration the agent’s interests and the state of your relationship. If you want the agent to help you, you need to think about what you can do to help the agent as well.

Think about the agent’s interests

The agent needs to represent the interests of the client, but it doesn’t stop there. The agent will also have his own personal interests. Don’t assume that the only driver for the agent is high commission. The agent presumably has a strong interest in reputation and securing future clients too.

Put forward options that meet the agent’s interests

You may be looking to sell your house if you are going to purchase a new one. One option might be for you to offer a price for the house (in line with market value), and then incentivise the agent to influence the vendor to accept this offer by proposing that if the vendor accepts, you will commit to getting the agent to sell your house. You may also mention that you are regularly discussing property with friends and colleagues at work, and would be happy to recommend them as an agent.

Make sure your offer is justified with objective standards

While of course you’d like to get the lowest price possible, in order for the agent to take you seriously and to avoid damaging the relationship, it’s important you come up with a price that is fair and reasonable. You should do your research by looking at auction results from other similar properties in the area, as well as general trends in the market.

Building the relationship
The type of relationship you build with the agent will strongly influence whether they will want to work with you. Remember that all relationships are based on assumptions. Often we make assumptions that agents are the ‘enemy’ and are ‘untrustworthy’. These assumptions are likely to influence the way we communicate with the agent and may lead to a hostile and adversarial approach to negotiations, however the agent is likely to better respond if they know that you are trying to work with them.

Your behaviour will also influence the assumptions the agent is making about you, so be careful! Indicate a desire to work with the agent and set the tone for joint problem solving by demonstrating an understanding of all parties’ interests, and signalling a willingness to explore a range of options together. Help them understand that you are facing the issue together and are trying to come up with options that will meet as many of each party’s needs as possible.

So, next time you’re in negotiations with an agent, think broadly about ways to build a positive working relationship. Consider their interests and how you can create extra value for them, and meet more of your own interests in the process!

Good luck!

Rebecca Stowe
Senior Consultant

P.S. If you’re interested in improving your or your team’s negotiation skills, our next Getting to Yes course is running in Melbourne on Tuesday 21 & Wednesday 22 June. Register here or contact us for more details.

Reflections on a recent negotiation

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I am in the process of organising my wedding , and recently had an interesting negotiation over the final contract with our preferred photographer.

Part of the package that they put forward included 100 thank-you cards. We had already organised to get our thank-you cards printed with our invitations, so had no need for this.

We certainly didn’t want to pay for something we didn’t need. So I expressed this interest and asked what he could do. I put forward an option of a 10 x15 inch framed photo instead of the thank-you cards, and they agreed to this substitution. I looked up the value of the 100 cards ($370) and the 10×15 ($280) which meant that there was $90 left. Referring to these standards I asked what else I could get for the $90 and the photographer didn’t have any suggestions. So I proposed a couple of smaller framed photos – for example, a 10 x 8. The person who I was speaking to didn’t have the authority to make that commitment, but agreed to run that idea past his boss.

I then expressed concern with the terms of the contract which said “75% of payment needed 2 weeks before the wedding” and “balance on collection of proofs.” I asked the standards question, “Why is it due on collection of proofs rather than collection of the album?” and also mentioned some other objective standards: “Based on my previous research, other photographers ask for balance at receipt of album.”

He responded by saying that some couples leave their album for months and months and this means he doesn’t receive his money in a timely way. So he effectively expressed his interest behind the terms stipulated in the contract as well as a standard. I then asked if there is flexibility in this requirement, and he assured me, ”If you have concerns about this, we are happy to speak about this further.”

So what was agreed to? Payment upon receipt of album and proofs to be handed over with the final payment. A great outcome – one that reflected our respective interests and relevant objective standards, and which was reached efficiently and amicably…now on to trying similar strategies with the florist, the dressmaker and the caterer. Wish me luck!

Rebecca Stowe
Senior Consultant