Arbitration & Mediation

More on Bargaining from a Position of Weakness

By Victoria Pynchon

Because I've been talking to a lot of people with services or products to sell in what they perceive to be a buyer's market, I've been giving a fair amount of advice about negotiating from a position of weakness.  That being the case, I'm just jotting down a few random thoughts on the matter.  None of the items below are meant to be exhaustive. 

Here's a previous post on the same topic.  And here's a great Malcolm Gladwell article on how weak nation-states and basketball teams can become the victors by playing the game on their own terms:  Annals of Innovation:  How David Beats Goliath.

PREPARATION

• assess everything you have of value to exchange with your negotiation partner
• assess everything your negotiation partner has of value to exchange with you
• assess everything you need or desire (minimum requirements to maximum benefit)
• assess everything your bargaining partner likely needs or desires

ASK DIAGNOSTIC QUESTIONS OF YOUR BARGAINING PARTNER

• what are their objectives
• how does your deal fit into those objectives
• what are their priorities
• when do they need to have the deal done
• are there any third parties who might add value to the deal
• what predictions about the future are they relying upon in setting their goals and priorities (business will go up/down; economy will improve/worsen)
• what metrics are they using to place a value on what you both have to trade
  

CREATE AND CLAIM AS MUCH VALUE AS POSSIBLE

• if the value you give to the deal is worth more in the hands of your bargaining partner than in your own hands, use the deal value rather than the trade value as the metric to measure the benefit you are providing
• when trading items of low value to you but higher value to your negotiation partner, use the higher value to anchor your offer
• when you are more optimistic about the post-deal future than your bargaining partner, consider building contingencies into the contract, i.e., if sales increase (as you expect them to) the value of the deal for you increases; if sales decrease (as your bargaining partner expects them to) offer to build contingency into the contract that will increase the value of the deal to your bargaining partner

NAME CONCESSIONS AND DEMAND RECIPROCITY

• when you make a concession, your bargaining partner should naturally feel the pull to reciprocate
• don't rely on your bargaining partner's natural tendencies
• when you make a concession, explain how valuable it is to your bargaining partner and how difficult it is to give up for you
• tell your bargaining partner that you expect proportional concessions from them

CONSIDER WHETHER YOUR WEAKNESSES MIGHT BE CHARACTERIZED AS STRENGTHS

If you're the smaller player, you may be in a better position to make novel offers; and you may also be more nimble, less burdened by bureaucratic red tape, and, better able to take risks.  You may also:

• pose a threat to a larger player, something your "deal" could lessen or eliminate
• present an opportunity to a larger player that it may wish to take advantage of while you are still small

Full post as published by Settle It Now Negotiation Blog on May 16, 2009 (boomark / email).