Posted on October 13, 2022 by Camp Systems
Once you understand what a negotiation is and when you are in one, it’s time to erase the negotiation myths that allow your respected opponent to gain from you.
This is Part 2 of the transcript from Dave DeSantis’ webinar for GreenWave Commissions’ CEO Slava Isayev. (If you missed Part 1, listen here.)
Dave DeSantis: The first negotiation myth is that compromise is required. Now I know that flies in the face of we’re supposed to play win-win where everybody’s supposed to get along and have mutually beneficial agreements. The problem with that mindset is that you presume that you’re going to have to compromise before you even begin your negotiation and know what the other side wants.
Let’s give an example, you have something to sell, and you wanna sell it for $50. And the other side has a real need for what you’re offering, and they’re willing to pay a hundred for it. Okay, if you go into now, we’re going to negotiate for this. I’d love to get 50: what? If I got 45, I’d be happy. So all of a sudden, my mindset is, how close can I get to my magic number of fifty?
And the other side is saying, “I really want this thing. I can spend up to a hundred, but you know what? I’m not gonna put my first number on the table. I’m gonna let them go first.” And if they’re at least sophisticated enough to let you go first, you may come out with a number like 50.
You lost that opportunity that they were willing to pay much, much more – just because you went in with a preconceived notion of what your value was to you.
You didn’t Look at it from the point of view of the other side. And even worse, if you went in with the mindset that compromise is required, you’d said my dream is to get 50, but I’m willing to get 45.
So you say something like, “Our list price is 50, but of course, we’re willing to work on that,” which basically said your price is not 50.
Slava Isayev: In that type of negotiation sounds like everybody limits their value and the price by the level of their fear.
Dave DeSantis: Exactly. And that level of fear is a thing that we call your neediness.
Okay. So if you’re needy, you’re thinking about yourself. You’re thinking, “I need this deal, versus I want this deal. What you do is you speed yourself up, and you don’t let the deal show itself for its true value on its own pace. All right. So I said, the first myth is everybody thinks that compromise is required. Absolutely not required.
The second myth about negotiation is that it requires power and leverage. The guy with the most power and leverage is going to win. It’s another myth.
People say, “Dave, you’re crazy. Of course, if they’re big Company X and I’m just a little guy, how am I ever gonna negotiate against them? They’ll just squash me, and they won’t let me do anything. So I have to give what they say, or I don’t get anything at all.”
If that’s your mindset, I just wanna ask you to answer this question to yourself….If the other side is so powerful and can do whatever they want, why are they talking to you at all?
If they had everything they wanted, they wouldn’t be talking to you. If they are talking to you, they’re saying you have something that they want that they can’t control on their own. So now, who has the power and leverage? This means they have some, you thinking of it in the traditional context, because maybe they have the money that you want to get from them.
But the flip side is, you have something that they want, that they can’t control on their own. That’s why they’re talking to you. If you start with that premise, “Hey, you’re talking to me. Therefore, you have a problem that you think that I can solve.” And the value you’re gonna get for solving that problem is a function of the pain they feel for having that problem. It has nothing to do with the size of their company and the size of your company.
Okay. In many instances, if you’re negotiating against a very large company and you’re with some mid-to-senior level person but not an actual owner. They’re used to dealing with telephone numbers, meaning seven-figure deals, maybe. And so, to them, thousands is nothing; it’s a rounding error.
Maybe to you, thousands is a lot. So if you’re dealing with someone like that and you say, “Okay, I could solve your problem for you. It’s gonna cost five figures or six figures.”
To them, that may not even be a lot of money. To you, it’s a tremendous amount. So you have to know your context and have to know that power and leverage are not required.
The third myth about negotiation is that “No” is a bad outcome. Why do we say that? If they say no, I didn’t get the deal. And even worse, if they say no, they reject me and I’m a bad person. Or if I don’t give them what they want and they say no, they’re gonna say you’re gonna damage the relationship. “Never come back here again!” Just a concept. I want you to get out of your head because those are the two big fears of negotiation.
Okay. So back to the third myth, which is no is a bad outcome. No is not a bad outcome. In fact, no isn’t anything. No is just a decision, and it’s a decision that can be changed.
The same way, yes is a decision. And actually, no is a much better decision than yes, because everybody understands what no means. When someone says no to you, it stops. Status quo. Don’t go forward. Stay where you are.
When someone says yes to you. Great. You get all excited. Yes. Now you have to think about under what terms; how do we implement.
Yeah, you got the deal. Great, you show up with your entire team for three years and stay on site with us, and you pay all the expenses. That was an expensive yes.
If they say no to you, at least you understand what they mean. And that’s one of the reasons why we actually like to work with no, preferred to yes.
We’re gonna have to get to yes. And figure out all. Implications of implementation, but at least with no, we know what it means.
Watch out for our upcoming Video #3 on the “2 Negotiation Fears.”