Negotiating Like a Trained Expert The Easy and Effective Way

We all have to negotiate; it’s a simple truth and you ought to just accept it. You might be in a position where negotiation is part of your job description, or you might have a role where you don’t think you have to negotiate often, but the truth is we have to negotiate not only at work but in every part of our lives! We are all negotiators. Some love it, some hate it, but nobody can avoid it. Sometimes we’re negotiating for small things like what to have for dinner and other times we’re negotiating for huge things like buying a house or negotiating a job offer. Since you have to do it anyway, and it can have huge effects in your life and career, you should probably get good at it!

Whenever you find yourself in a negotiation, you face a dilemma: should you be friendly and negotiate softly, or should you negotiate hard. If you negotiate softly, you’ll protect the relationship from damage, but you might give more than you had to and get less than you need. Most people have a natural tendency, either to be a soft negotiator or a hard negotiator, but sometimes they might flex to the other style. The problem with soft and hard negotiation is that they’re ineffective, they become a contest of wills and lead to “agreements” that don’t make anybody happy. Or at least they don’t usually maximize overall happiness of the participants.

But, there is a better way, that is neither extreme. It’s called Principled Negotiation, and it was developed by the Harvard Negotiation Project. In this article, I’ll give you a nice little intro to it and point you to further resources. This is the first of two or three negotiation articles that we’ll post over the next few weeks. This one sets the theory, and the future articles will apply it to important career issues like salary negotiation!

Don't negotiate over positions

Negotiation methods should be judged for their effectiveness in three key areas:

  1. It produces a wise agreement if one is possible.
  2. It should be efficient.
  3. It should improve or, at least, not damage the relationship.

A wise agreement is one that meets the true underlying interests of the parties (not their positions) and resolves conflicts fairly.

The traditional way of negotiating over positions tends to produce unwise agreements. So, what do we mean by positions? If you’re organizing a conference, and you want me to deliver my AWESOME session on Millennials in Insurance, our negotiation might look something like this:

“Hi Tony. I saw your presentation at the RISC Trends Conference in Richmond, Virginia and loved it.”

“Thank you! I love giving it.”

I’m organizing the 2018 Insurance Awesomeness Conference in Anchorage, Alaska and would love to have you be the keynote speaker.

I’d love to!”

“What kind of speaking fee do you look for?”

I aim for $2,500 plus first class plane round trip Delta ticket from Atlanta, a five star hotel and limo service while I’m in town. Total for Anchorage should come in around $5,000.*

“Wow. That’s a lot. I can only do $1,500 total.”

I’m sorry but I can’t do it for that. How about $4,000 total. I guess I’ll do without the limo.

*grumble grumble*

“I can go to $2,000 but it’s pushing it.”

I’ll meet you halfway at $3,000. I’ll have to fly cattle class, errr, I mean, I’ll fly coach.

“$2,000 is literally all the budget I have. I’m sorry but it looks we can’t afford you. I’ll have to try a different speaker.”

*Note: Tony doesn’t actually ask for all of those luxuries to do a speaking gig.

Since those numbers didn’t overlap from the beginning, there was simply no way to come to an agreement if we both negotiated hard, which we did. If one of us had negotiated softly, then that person would’ve given in, and an agreement would have been reached within their range, but the other person would’ve been unhappy, and the relationship might have been damaged.

Basically, the more you focus on the positions, the less you’ll be able to focus on the underlying concerns of the parties. And, ultimately, what matters is the underlying concerns! If you focus too much on the positions, an agreement might happen mechanically; we’ll just split the difference, but the result will be less efficient and less satisfactory to both of us. It also won’t help us grow the relationship.

So, what is the difference between your position and your interests? “Your position is something you decided on. Your interests are what caused you to decide.” Negotiating based on interests instead of positions works because there are usually several different positions that can satisfy each interest and because behind opposing positions you might find compatible interests.

Separate the people from the problem

People have emotions. Tony cries in movies (sometimes even in commercials) and is on an emotional high about 92% of the time. You don’t like rejection, want to get good bang for your budget and don’t want to be taken advantage of. The key is to try to work side by side to solve the problem in a way that works for both, instead of seeing as a competition to see who pushes harder. Working together to find a solution also makes you more creative.

Negotiating positions makes it hard to figure out what the other person really wants, even to figure out what you really want. Your ego gets wrapped up in hitting the number you have in your head and not giving in.

Let’s take a little bit at what the underlying needs and wants might be for the speaking gig negotiation scenario:

You:

  • Want to put on a great conference
  • Need to stay within budget
  • Want to get the best speaker you can
  • Want to be recognized by the rest of your team for your great work
  • Need to feel respected during and after the negotiation and the event

Tony:

  • Needs his travel to be covered
  • Wants to give his beloved session in front of a new audience
  • Wants to sell some copies of his book
  • Wants to be recognized for his thought leadership
  • Wants to get the word out about InsNerds

It’s important to attack the problem without attacking the people. Try to be supportive of the people, show them respect, listen to them, show them courtesy, appreciate their time and effort. Make sure they know you care about them and care about making sure they’re happy with the results of the negotiation.

Invent Mutually Beneficial Options

By working together and focusing on interests instead of positions and sitting on the same side of the table, so to speak, you can work on finding mutually beneficial options. Basically instead of fighting over how to split the pie, instead work together to grow the pie, so you can split the bigger pie in ways that make you both happy.

How do you get to a place where you can be creative together? One big way is to first agree to allow each other to come up with stupid ideas. Brainstorm first, then judge the ideas. Use this method to come up with better win/win solutions.

Here’s what the negotiation about getting Tony to speak might have looked like using these tools:

“Hi Tony. I saw your presentation at the RISC Trends Conference in Richmond, Virginia and loved it.”

“Thank you! I love giving it.”

I’m organizing the 2018 Insurance Awesomeness Conference in Anchorage, Alaska and would love to have you be the keynote speaker.”

I’d love to!”

“What kind of speaking fee do you look for?”

I aim for $2,500 plus first class plane round trip Delta ticket from Atlanta, a five star hotel and limo service while I’m in town. Total for Anchorage should come in around $5,000.

“Wow. That’s a lot. I completely understand why you ask for that much, because you’re absolutely worth it, but we don’t have that much budget for this event. Let’s see if we can find a way to make this work for both of us.”

Ok, what do you have in mind?”

“Well, in Virginia you mentioned that you have a book coming out, is the book available now?”

“Yes, it’s out. We’re very proud of it, and it’s selling well! It’s also getting great reviews!”

“Awesome. I can’t wait to read it! We might be able to figure out a way to make this work using the book. Can you lower your price a little if we give you a table to sell at the event and encourage people to buy copies?”

Yes, that would be fantastic. I’m happy to reduce the speaking fee to $1,800 if you do that for me. I can make up the difference in books sales.”

#LlamaSelfie

“Fantastic. That gets us a lot closer to being able to agree. You mentioned during the last session that you really love doing the session and that you want to get it in front of as many people as you can. This is the largest insurance conference west of the Mississippi, and in the opening session, we’re expecting 3,000 people.”

Wow, that’s the biggest audience I’ve ever had!”

“Given that number of people, and potential book sales, would you be willing to accept coach roundtrip flight on Delta and a four star hotel?”

Yes, to get my presentation in front of that many people I can absolutely do that. I also don’t really need a limo, I’ll take an Uber.

“Perfect. Thank you for working with me. We are almost there, I think. At $1,800 speaking fee, plus economy travel costs that’s putting us about $600 above the budget I have for this. However, I do have a separate budget for conference giveaways. How much do you normally charge for the book?”

$20 per copy.”

“Do you offer bulk pricing?”

Yes, $15 per copy if you buy more than 50.”

“I don’t have enough budget to buy copies for all attendees, but I could raffle some copies. What about if I commit to buying 50 copies at $15 a piece. That’s $750 which I can afford from my giveaway budget. Would you be willing to agree to a speaking fee of $1,000 plus economy travel costs, a table to sell your books and an agreement that we’ll buy 50 copies to give away at $15 a copy?”

Yes, I’d be happy to do that.”

“It’s a deal!”

By finding the real interests behind the positions, working together to creatively expand the pie, and treating the negotiation as a search for win/win solutions we were able to find an agreement that we’re both happy with, that serves our needs, and that strengthens our relationship.

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To dig much more in depth into the theory of Principled Negotiation we highly recommend the book Getting to Yes by Roger Fisher and William Ury.

If you buy the book using our link we get a small commission.

About Antonio Canas

Tony started in insurance in 2009 and immediately became a designation addict and shortly thereafter a proud insurance nerd. He has worked in claims, underwriting, finance and sales management, at 4 carriers, 6 cities and 5 states. Tony is passionate about insurance, technology and especially helping the insurance industry figure out how to retain and engage the younger generation of insurance professionals. Tony is a co-founder of InsNerds.com and a passionate speaker.

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