Deal + Negotiation = Contract (or the Four Modes To Get You There!)

by drjim on July 11, 2008

There Are Four Different Modes To Each Negotiation

There Are Four Different Modes To Each Negotiation

Too many people look at a negotiation in a negative way. They sigh, and instantly become tired whenever the prospect of entering into a negotiation shows up. What they are missing is that a negotiation is not necessarily a contest. When there is a deal to be done or a contract to be signed then negotiation skills are required.

The secret to getting the best deals from your next negotiation is to realize that just like the different roles that you have to play as a skilled negotiator, there are four modes of negotiating that arise during each negotiation session. If you can learn to recognize these modes and come up with ways to deal with them, then you’ll know how to deal with them. Here are brief descriptions of the four modes, let’s see how many you recognize:

  • The Cooperative Mode (Both Win): During this phase, both parties realize that there is a better deal available to both of them if they are both willing to take the time and make the effort to look for it. They will know that they have found it when both sides have increased their profit and/or their satisfaction without harming the other side.
  • The Competitive Mode (Defending Your Interests): During this phase you are locked in a competitive battle with the other side. There will be a winner and a loser and you’ll be darned if you are going to be the loser! During this phase, you should say as little as possible because information is power and you don’t want to give too much power to the other side.
  • The Organizational Mode: This is very much like the “channeling” that mystics do for folks who have passed on to the spirit world. The other side is really representing their organization and because of this their hands are tied on some matters. When they say “No” it may not be the other negotiator that is saying it, but rather his/her organization that is saying it. During your preparation for negotiation make sure that you know the other side’s organizational structure and what pressures they will place on their negotiator.
  • The Personal Mode: The ultimate goal of any negotiation is for both parties to walk away feeling satisfied. What it’s going to take to satisfy the other side may lie buried beneath the actual issues that are being discussed. Your job as a negotiator is to be aware of your “satisfaction issues” and to uncover the other side’s.

There you have it. You’ve probably seen all four of these modes in play during your past negotiations; however, you may not have seen yourself in these modes also. Knowing that they exist and molding your reactions to them will help to make you a more successful negotiator.

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{ 2 comments… read them below or add one }

Ted Linklater April 7, 2009 at 12:59 pm

I have just left the “Dark Side”, (sales and marketing), and I am now pursuing my C.P.P. accreditation in Supply Chain with a focus on purchasing.

From a sale perspective the pressure is almost always greater on the sales side, when dealing with Purchasing.

Some of the reasons:

The Buyer knows exactly what benefits he/she needs, the salesperson can do the research but there is no certainty that the salesperson is pushing the “correct button”.

The buyer, in most cases, has substitute products or services, including the incumbent product or service , that the buyer can go to. During the negotiation process the salesperson only has one alternative.

Many companies have functional departments that are “silos”. Thus, even if the salesperson has convinced other departments on the merit of his/her product or service, those results may not reach purchasing.

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Dr. Jim Anderson April 11, 2009 at 2:09 pm

Ted: The trick to good sales negotiating is to never believe that the buyer has more power than you do (they might, but don’t think that!) This can take a great deal of effort. You have to REALLY believe that your solution is the best one for your customer and that they would be making a huge mistake if they substituted for your product. As you probably well know, this mindset can be very tricky to hold on to as the end of the quarter starts to approach…!

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