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.