The bottom line is what drives most negotiations

The bottom line is what drives most negotiations

Image Credit: Philippe Put

So how is that negotiation going? Generally, speaking, no matter what negotiation styles or negotiating techniques are being used, we judge our negotiating success with how the bottom line is looking. The bottom line is more often than not evaluated in financial terms. This is how most of us have been trained to evaluate a bottom line and therefore a negotiation. However, it turns out that we might be doing this all wrong. There are other things that we need to be considering…

A Financial Bottom Line Has Many Different Aspects

Ok, so hopefully we are all on board when it comes to understanding just exactly what a financial bottom line is – the price that one side of the negotiation is going to agree to pay. It turns out that if you look at it correctly, the financial bottom line actually includes much more than this.

Sure the price is included in the bottom line. However, what is also included but what is not always considered as much is the financing that will be used, the payment terms that have been agreed to, and any extra conditions that have been included. Reaching an agreement with the other side of the table can be difficult not because of the bottom line price, but rather because of all of these other factors.

From a negotiator point of view, when we are thinking about the financial bottom line it is possible that we’re thinking about the wrong thing. Sure, the price does matter. However, what might be even more important than how much something costs is what does this deal include?

How To Use Marketing To Make Your Bottom Line Even Better

When you are involved in a negotiation where the other side has its attention fixed on the price, you may find yourself with a unique opportunity. In this type of negotiating situation, you may be able to negotiate a number of concessions that you would not normally be able to get in exchange for being flexible on the price.

You need to keep in mind that any deal consists of a lot more than just the price. Marketing and all of the things that are associated with it are things that lend themselves to being included in any negotiation. What you are able to get the other side to agree to in terms of marketing issues may end up having a greater impact on the deal than the price did.

When you are negotiating, you always need to be keeping your eyes open for new opportunities to make the deal even better for you. Keep in mind the fact that you may need to convince the other side that doing business with you is their only option. Get them to agree to this concept, and they will become less focused on the financial bottom line and more focused on reaching a good deal with you.

What All Of This Means For You

Negotiators always want to know how a principled negotiation is going. One method that we use to accomplish this is by taking a look at the bottom line in financial terms. However, it turns out that by doing this we may be short-sighted. It turns out that there are a number of different aspects to the bottom line that we need to account for.

The bottom line is important in any deal; however, what may be even more important is what the deal includes or does not include. Part of this might be how and when the money will exchange hands. If the other side of the table is focused on the price, you may be able to use this to your advantage. You may be able to get a number of additional concessions as a result of your willingness to be flexible on the price.

Yes, the financial bottom line of any negotiation is important. However, it turns out that if you focus too much on just that part of a negotiation then you’ll quickly run into problems. Keep in mind that a bottom line has many different aspects and that you may really want marketing concessions instead of a lower price. Watch your bottom line and you’ll be able to get the best deal possible.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What steps should you take if you don’t like the way the bottom line currently looks?

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What We’ll Be Talking About Next Time

When we enter into a negotiation, it can be very easy for us to focus our attention on the deal that is on the table before us. After all, this is why we are spending the time on this negotiation and getting the deal that we want is what we have spent our time on collecting information while we prepared. However, it turns out that if we can shift our thinking from the short-term to long-term we may end up walking away from the negotiations with a much better deal.

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Every Negotiating Issue Has Multiple Solutions

by drjim on January 16, 2015

When it comes to solving negotiating issues, there are always multiple options

When it comes to solving negotiating issues, there are always multiple options
Image Credit: Rilind Hoxha

Although I’m sure that many of us have heard about negotiations that got hopelessly deadlocked, it turns out that in most cases a negotiation can always be kept on track so that you can reach a deal with the other side no matter what negotiation styles or negotiating techniques are being used. The key is to understand that you always have the power – you could walk away from the deal if you had to. Since we never want to do that, what we need to do is to understand how to work flexibility into our next negotiation so that we can find the multiple solutions that will work for us.

Keeping The Other Side At The Table

In order to conduct a successful negotiation, you are going to need to have both parties come to the table and stay at the table. That may sound easy, but during a heated negotiation, one or both parties may decide that it’s time to throw in the towel. As a negotiator, you need to take steps in order to make sure that this doesn’t happen.

Look, if during a negotiation you reach the conclusion that the situation is hopeless – you are never going be able to reach a deal with the other side, then yes, you need to give up and walk away. However, before you do this you need to realize that both disagreements with the other side and actual deadlocks are really opportunities for you to create a different type of deal. You need to remain flexible and keep an open mind when you encounter these situations.

It is entirely possible that during a negotiation things will start to go off the track when the other side starts to become angry. You can tell that this is happening when they start to interrupt you, raise their voice, or start to lose patience with what is going on. If this happens, then you need to start to communicate to the other side that you are flexible; you are willing to search for different ways to resolve the issues. As long as you can keep the discussions going, then both sides will be in a position to remain flexible.

Different Aspects Of Flexibility

I’m often asked by novice negotiators what flexibility actually looks like in a negotiation. The answer, of course, is that it depends. There is not one thing that you can point at and say “that’s evidence of flexibility”, rather it has a tendency to sneak into a negotiation from around the corners.

Flexibility can enter into a negotiation in several different ways. The first is in how you choose to define the bottom line. The definition that you use when the negotiations start may not be the definition that you’ll be using when things wrap up. Additionally, we need to understand that in any negotiation there is both an apparent and a real bottom line. What both sides may see as being the bottom line may only be the apparent bottom line at the start of the negotiations. Based on the discussions that you have, the real bottom line will emerge.

Different kinds of flexibility may be used during a negotiation. What many of us don’t realize is that a negotiation is really an opportunity for us to use our trial and error skills. If we are trying something and it’s not working out for us, then that is a message that we need to go back and try something else. Your goal has to be to keep trying different things until you achieve the deal that you’ve been looking for.

What All Of This Means For You

The wrong way to approach your next principled negotiation is to go in thinking that there is one and only one solution that is going to provide you with the deal that you want. What you need to do is to negotiate with flexibility so that you are able adjust your approach and stay on track.

The first thing that you’ll need to do is to remain flexible when the other side of the table starts to become upset. You’ll need to find ways to keep them talking and get them to calm down. Keep in mind that there are a number of different aspects to negotiating flexibility and each can be used when appropriate.

The most important thing to keep in mind when you enter into your next negotiation is that there are many different ways to reach a deal that will meet your needs. You need to retain the flexibility that will allow you to adjust your position and work with the other side to take new paths that will lead you to a deal.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What’s the best way to calm the other side of the table down?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

P.S.: Free subscriptions to The Accidental Negotiator Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

So how is that negotiation going? Generally, speaking, no matter what negotiation styles or negotiating techniques are being used, we judge our negotiating success with how the bottom line is looking. The bottom line is more often than not evaluated in financial terms. This is how most of us have been trained to evaluate a bottom line and therefore a negotiation. However, it turns out that we might be doing this all wrong. There are other things that we need to be considering…

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