Negotiation is never about price

(This is a repost from Filip’s original blog)

Participants in my lectures and workshops seem to truly enjoy the “a-ha moments” where their existing beliefs about negotiation, influence or human interaction are modified (and sometimes shattered). So I thought perhaps such insights or nuggets could make up an ongoing series of “busted myths and misconceptions about negotiation”.

So let’s start with one of the most common ones: price. It certainly seems to be part of many negotiations. I agree. But we don’t care about the price on its own – the price is always for something in return. Think about this for a second…

  • We get a salary, in exchange for adding some form of value to the company.
  • We pay a price for a contract because we want services or goods delivered.
  • We pay a price for a car because owning that car will add value to us.
  • We pay a bridge toll because we value the time saving of using the bridge.
  • We even pay a fine for something in return… we pay to avoid having to pay a larger fine later, or to avoid going to jail, or perhaps for the motivation to drive safer in the future!

This insight is one (of many!) that allows us to create more value. E.g. we could either try to pay less for the same thing, or pay the same but negotiate for more in return. In fact, elite negotiators realize that a 3rd option exists; to ensure that we get so much in return that we are actually prepared to pay more for it.

  • Thus we could be prepared to pay employees more, provided they deliver more value.
  • We may be prepared to pay more for a contract, provided that we need and get better or more service.
  • We may be prepared to pay 10% more for a more luxurious, reliable or versatile car with fewer kilometres on the dial and greater re-sale value.
  • And we may wish to pay a higher bridge-toll for a bridge that cuts 20min from our daily commute time.

So elite negotiators don’t negotiate about price – they negotiate based on the value they get in return on everything that goes into that negotiation. Yes! That’s a good insight; we want HigherReturn ONegotiation.

If only we could capture that insight with a suitable acronym? H.R.O.N…? ☺