Hello, negotiation enthusiasts! 🌟 We're back with more gold from our series, "5 Things to Help You Stop Leaving Money on the Table." 🤝 Here's a deeper dive into one of the most powerful ways to craft better outcomes on every deal!
Let's get after Part 3: Openings
Today, where we're diving into the impactful world of Opening Positions - the daring first steps that can chart the course for a career-changing deal. 🚀
Imagine a map of your negotiation, and you're the one setting the initial coordinates. That's your Opening Position! 💰💎 Whether you're buying or selling or simply negotiating the exchange of value, your opening position has a massive impact on the outcome. Throw out a strong starting point, and watch as it influences the negotiation tides in your favor.
How does this play out?
If you're negotiating in a competitive style, it may make sense to open well beyond what you believe your counterparty can do. By doing this you have the chance to change the other party's perspective on the outcome of the deal and you leave yourself room to move.
Conversely, if you are striking a deal in a collaborative or creative style, you might choose openings that reflect that. In that situation, you might even open with something they want to hear regarding a contentious item, so that you can engender trust and gain movement in other areas of value.
Be strategic, not stubborn! 🧠💡 Your Opening Position isn't set in stone; it's the first of many proposals you are likely to make as you craft a deal. Stay flexible, choose your style appropriately, and be ready for your next proposal.
Story
I worked with George a while back when he was a regional V.P. for a specialty chemicals company. The specific products he represented were highly commoditized, but the service his company offered was sought-after. It made them the dominant player in the marketplace.
Unfortunately, he had a habit of opening with numbers so extreme, his customers completely discredited them. These were highly collaborative relationships with 3-5-year agreements in place and many items to be negotiated. His opening positions were completely inappropriate. It was costing him business.
After some time together, we reconfigured George's strategy. He could command a premium for the service, but his products were commoditized. So, he tied the product price to an index and opened at a much more credible number on service, one that still gave him room to move and make a significant profit.
Over time, George developed a subtle and strategic approach to his opening positions and the profitability of his deals increased dramatically.
Stay tuned for Part 4, where we will take a look at the impact that your responses to their proposals have on the outcomes. 💪💰