Value Driven Negotiation - Set the Stage

Welcome to Value Driven Negotiation - Set the Stage

Welcome to Value Driven Negotiation - Set the Stage


There are a total of six tutorials in this learning series. This is the third tutorial in the series.

  • Value Driven Negotiation Overview
  • Discover and Prove Value
  • Set the Stage
  • Identify Interests Behind Positions
  • Clarify Issues and Values
  • Present Positions and Trades to Reach Decision (incorporates Stages 4 and 5)

Learning Objectives


By the end of the Set the Stage tutorial you will:

  • Understand the importance of value differences in creating an effective trading plan
  • Determine your own negotiation style preference
  • Learn how to respond accordingly to different styles of negotiation
  • Assess Nielsen and Client sources of power including determining the Client’s power limitations
  • Develop an effective lead-in statement to promote common shared interests with the Client

What is Set the Stage?


Once you have done your research to discover and prove value, the next action in the Value Driven Negotiation model is for the associate to set the stage to maintain or encourage the Client’s openness.

To set the stage we are looking for Clients to share more information to come to an agreement on common interests.

To do this we want:

  • Clarity around differences
  • Agreement on a process of discussing differences and solving problems
  • Agreement to the extent of collaboration needed to secure a good outcome

Set the Stage Components


The Set the Stage phase of the negotiation journey has four key components.

  • Value Differences
  • Identifying Negotiation Styles
  • Analyzing Negotiation Power Sources
  • Creating an Effective Lead-in Statement

Value - Differences

Definition - Value Differences

  • Value differences are differences of rating or priority given to an aspect or issue in terms of value to the Client or Nielsen
  • They can be tangible (Easy to agree on the basis of measurement) or intangible (This is more difficult to measure and relies on perception and experience, especially concerning risk and other implementation concerns)
  • Differences of value perception and quantification are the foundation of creating greater collaboration
  • Combining complimentary value differences builds momentum and relationships
  • Value differences takes the work done earlier where we discovered value, to identify:
           - Where does the Client rate our value in the same way as we do?
           - What does the Client value that differs from what we value?

Why are Value Differences Important?

The goal is to combine the identified value differences to create a trading plan where the intended outcome is:

  • Agreement;
  • Both parties get something of value;
  • A deepening desire to work together

Remember that value differences drive negotiation dynamics and are good.

  • They are the basis for trading
  • The optimal position for you to be in is to trade something that is of less value to you than to your Client for something that is of greater value to you than to your Client
  • The key to collaborative success lies in the assessment and validation of value differences

Value Differences Example 1

In a negotiation it is important to know and understand what you value as well as what your Client values. This assessment is a key component to developing a successful trading strategy.

In this example we are looking at Category Size and Complexity.

  • It is a high value to the Client – they want a read of the entire category
  • It is a high cost to Nielsen – it is dependent on category size and channels covered, but in this example the client is licensing a syndicated solution (not custom) and your client is not requesting any category customization

Value Differences Example 2

In this second example, having a longer term agreement is of high value to Nielsen and for the Client has less value/or cost.

As we continue in this course we will learn more about the different elements involved in Nielsen negotiations, and which we are more/less prepared to trade on.

Workbook Activity - Case Study - Value Differences

  • Open your local copy of the Value Driven Negotiations Workbook and turn to page 21.
  • Determine from your case study what the Client values highly, apart from price, and is of less value to Nielsen.
  • Decide on a key word for each issue and put them on the Value to Client line in their relative positions.
  • Now decide how to position the trade with the Client for the item that Nielsen values highly. In your notes explain your reasoning.
  • Next, take some time to reflect on your own Client. Think about what you are going to do differently in your approach to identifying value differences and establishing points of trade based on high and low value to you, the Client and the competitors. Answer the questions in your workbook on page 22.

Value Differences Summary

  • We have looked at those factors that help us to set up trading later in the negotiation process.
  • Trading is typically defined as a give and take process between two parties, each with its own aims, needs, and value priorities, seeking to discover common ground and to reach an agreement.
  • This give and take is based on identifying value differences and then combining them so that each trade is made up of:
           - One or more issues where the Client places a higher value than Nielsen and is linked directly to one or more issues where Nielsen places a higher value than the Client.
  • These trades can only be created if we understand how much care has to be invested in planning, preparing and executing a negotiation.

Identifying Negotiation Styles

Identifying Negotiation Styles


The next step to Set the Stage is to understand your Client’s negotiating style and consider how this will impact the way in which you present your offers.

Our goal is to seek collaboration with our Client and this is why we look at negotiation styles to ensure we can identify the styles our Clients use and how we can complement or counter such behaviors.

Recognizing and responding to negotiating styles is a key element of the preparation skills we mentioned earlier.

What is Your Negotiation Style?

The first step is to identify your negotiating style. Knowing your style and your Client’s is important because:

  • Style indicators help you to focus on behaviors, not personality
  • It enables you to make realistic judgments about yourself and those with whom you negotiate
  • Identifying style indicators is not an exact science but provides you with a framework to help you understand behaviors
  • All styles are useful in the right situation and one style is not inherently better than another
  • The key is to be able to adjust your style to changing situations
  • Always be aware of the degree of assertiveness present in the negotiation, both yours and your Client's


Please refer to the Negotiating Styles Questionnaire on pages 23 - 37 in your workbook to take a brief assessment to determine your style.

The Four Degrees of Assertiveness

We define style by degree of assertiveness. Identifying whose interests the negotiator cares about in a given situation differentiates the four styles. Here are the four degrees of assertiveness:

Click on each 'i' to learn more.

Using Styles to Your Advantage

Be flexible. It is important to remember that style classifications are guides and people will be a mix of all four, with one or two styles being more dominant. Consider these three factors:

  • Style Preference: How often and consistently a negotiator demonstrates particular levels of assertiveness in different situations over time. This may also indicate the level of comfort a person has in dealing with conflict
  • Style Flexibility: A negotiator’s ability to change the level of assertiveness as situations change
  • Style Effectiveness: A negotiator’s ability to assert interests appropriately in a situation and influence favorable outcomes

You need to identify the style of the other negotiator and be flexible in your use of styles to come to an agreement and protect both the relationship and your interests. We want to try to stay in a collaborative mode to drive mutual value for Nielsen and the Client.


Can all of the styles be used successfully in a single negotiation?

Yes, of course, because it is necessary to give and take during a negotiation. If we are only accommodating, others would take advantage of us. If we are only adversarial, we might make short-term gains, but we might also ruin relationships and offend others. Even if we always try to be collaborative, in some situations we must take a stronger stand to protect our interests.

Styles FAQ


What happens when someone with an adversarial style negotiates with an accommodating negotiator? 

Typically the adversarial negotiator dominates the accommodating negotiator, taking advantage of them and getting the best deal. This typically results in the accommodating negotiator feeling taken advantage of and resenting the deal. This is not good for the long-term relationship.


What happens when someone with a persuasive style negotiates with an adversarial negotiator? 

The persuasive negotiator will try to “sell” the adversarial negotiator on their position, but unless they seek common ground and attempt to collaborate to some degree with the adversarial negotiator they won’t typically make much progress with the adversarial negotiator.


What would be your plan if you were negotiating with an adversarial negotiator? 

Take a breath, and then clarify the adversarial negotiator’s position and work to understand their interests – seeking common ground and shared interests as a way of finding something to agree on.


Is it always a good thing when you’re negotiating with a collaborative negotiator? 

Typically collaborative negotiations result in the best outcome for both parties – however there are times when a persuasive or adversarial approach is best to protect your interests over those of the other party. In contrast, it may be appropriate to be more accommodating if you are trying to protect or improve your relationship at the cost of giving up more than you normally would.

Styles - Considerations

Given below are some considerations about Styles.

  • Long/Short-Term IssuesWhen business is transactional or a relationship is not important, people may be much more persuasive or adversarial.  But when long-term issues are important, you may accommodate the other party today to build the relationship or to win something better tomorrow.
  • Leverage/Power: Who has the leverage? Who thinks they do? Greater power makes some people more adversarial.
  • NeedsWho has the greater need? How well do they present their needs?
  • Styles: Are your personal negotiating styles compatible or ill-matched? A more assertive person with fewer resources can often sway an accommodating person who is uncomfortable about negotiating.
  • Knowledge/Expertise: Information is power. Who is more knowledgeable? Someone with knowledge and expertise will win against a negotiator who is less knowledgeable but more persuasive and articulate.
  • Nature of the Relationship: The nature of your relationship with your Client can greatly influence the degree to which you may use any of the styles. If it is a transactional sale, you can be adversarial because you don’t want a long-term relationship. But if you value the relationship, you should avoid an adversarial style.

Process to Manage an Adversarial Style

  1. Recognize it is all about them.
  2. Start with a collaborative style.
  3. Then, try a persuasive style.
  4. Engage you Client Advisors.
  5. Assess the risk of an adversarial or accommodating style. 
  6. Emphasize common interests.

Workbook Activity - Styles Reflection


In your workbook on page 39, think about the style of your client. From your experience with them, what style have you experienced negotiating with them? How will you flex your style to best work towards collaboration when negotiating with them?

Analyzing Negotiation Power Sources

Analyzing Negotiation Power Sources


Power in a negotiation is a critical factor because the more powerful party is likely to “win” more. 

Analyzing power sources helps you identify things you can do to balance power with your Client. 

A sense of power helps you feel confident in your ability to set the stage and to influence the Client throughout the negotiation.

Who Has the Power?

Click each question 'i' to reveal the answer.


Ultimately, even experienced negotiators can be disarmed by Client ultimatums and surprise demands. Often, this is due to poor preparation. Turn to page 40 in your workbook and take a few minutes to consider what sources you have for Nielsen’s power and the sources of and limitations of your own Client’s power.

Sources of Power

An important part of your negotiation preparation and planning is to assess the level of your and your Client's power. There are 10 power sources to consider. We use the acronym "MASTER TACK" to help remember the 10 types.

Power Sources Description
Motivation The essential question here is who needs this sale more, you or the Client? The more motivated the Client, the more power Nielsen has. The more intensely Nielsen needs to make the sale, the more power your Client will have.
Alternative Who has the best alternative solution or BATNA (Best Alternative to a Negotiated Agreement). Some Clients have few options because of timing, deadlines, or unique needs. If you offer discounts too early you may communicate weakness and desperation.
Skill Who is the most skillful negotiator? Clients are making more buying decisions today, and are getting better at it. Many Clients have attended seminars to improve their negotiating skills, which means they're gaining more skill power. You must constantly improve your skills, just to keep up.
Trust A common mistake Nielsen makes is overlooking trust. With an existing Client who is renegotiating a contract, assuming things have gone well, your track record of delivering OTIF (On Time and In Full) is something your competitor can’t have. It’s something that will hold Clients to you – the risk and uncertainty they feel in changing away from Nielsen is too often underestimated.
Expertise It is easy to be intimidated by Clients who have a great deal of expertise in many areas, but do they have expertise in your solution and its varied applications? Remember, you have probably been involved in more implementations of your product/solution than they will ever be.
Relationship Do not underestimate a good relationship. Major deals have hinged on “I think I can work with these people/you”. Remember, you have spent all that time building strong relationships with key associates at your Client. As a result, the more the Client has invested in your relationship the more reluctant they will be to change. Therefore, the relationship is a source of Nielsen’s power.
Time This refers to any impending events that place a deadline on either the Client or Nielsen. If the Client is under time pressure, it usually gives Nielsen negotiating strength.
Advantage Of all the possible solutions it is easy to focus on where your offering is the same or in some cases inferior to your competitors. It’s important to establish the following up front with the Client if applicable: unique features, customer service, specialization, and/or leading brand in the market.
Competition Both you and your Client have competition who, at different levels, exert pressure and can create feelings of having less power. On other occasions, if you know you are up against inferior or less skilled competitors then your power increases.
Knowledge The old saying “Knowledge is Power” is still a potent weapon in negotiating. For example, you could identify what really matters to the Client including discovering their needs and problems. Use the Client Perspective Tool to help you in researching your Client.

Workbook Activity - Case Study - Sources of Power


In your workbook on page 42:

  • Using the case study, reflect on the sources of power from Nielsen's and the Client's perspectives.
  • Score each Power Source from 1 to 10 for both Nielsen and the Client.

Power - FAQ

Click on each question 'i' to reveal the answer.

Power Summary and Reflection

  • Build power through developing intangible power, e.g. show consistency and remind the Client how consistent you have been over the life of the current contract.
  • Do not give away power by making unsolicited concessions.
  • Do not inadvertently give away information that will empower the Client – e.g., recent quality issues, and special discounts.
  • If you and your client have value differences, be sure to use this when planning what and when to trade.

 

 

 



In your workbook reflect on the questions asked on page 43.

Create an Effective Lead-In Statement

The last step in Setting the Stage is to create an effective lead-in statement. This should only be done once you have determined your Client’s negotiation style and their power position.

Effective Lead-In Statements

However you start to Set the Stage, it has to have impact by creating an effective lead-in statement.

Your Lead-In Should.....

  • Initiate or renew a Client’s motivation for collaboration as a tangible benefit to their business.
  • Set a framework for addressing major issues and achieving objectives.
  • Set the tone for joint problem-solving and conflict resolution.
  • Restate your Value Proposition.
  • Set expectations of how the negotiations will be conducted.
  • Set an anchor to constrain or widen the negotiation’s scope.
  • Request a Client’s response (a question).

A Good Lead-In Will....

  • A lead-in can help you postpone a discussion of issues that you are not ready to discuss.
  • It will help you resist the temptation to argue with the Client or to be drawn into a test of wills in which you try to get the upper hand in the negotiation.
  • Overall, a lead-in can work well whether you or the Client initiates the negotiation.
  • Even if a Client seems to ignore or resist your lead-in, you have “planted a seed” or established an important theme.
  • You can refer to this theme during a negotiation to reinforce trust and maintain openness.

Lead-In Statement Example

Given below are the benefits of the words chosen (in italics) in this lead-in statement.

 We both have an important, shared commitment to be working together using this insight service by the end of the quarter. It will provide value and benefits for both organizations. 

My objective for this meeting is to find a way to resolve your pricing and specification concerns by looking at the total picture
 

How does that sound?

We both have - a collaborative statement

will provide value and benefits - potential gain

find a way to resolve - highlights the main objective

looking at the total picture - ways to resolve differences

How does that sound? - a prompt for the Client to confirm or modify the statement

Words in Italics Benefits
We both have a collaborative statement
will provide value and benefits potential gain
find a way to resolve highlights the main objective
looking at the total picture ways to resolve differences
How does that sound? a prompt for the Client to confirm or modify the statement

Workbook Activity - Case Study - Lead-In Statements

  1. Review the case study in your workbook.
  2. On page 45, write a lead-in statement for a negotiation based on the information in your Case Study. Use the parameters described in the Lead-in example.
  3. Remember:
  • What you say and do depends on your knowledge of the situation and the Client Negotiator.
  • ​While thinking about what you might say and do beforehand helps, effective lead-in statements are planned but not rehearsed and should not sound false.

Summary

Summary

The first action in the process for the Nielsen Negotiator is to set the stage to maintain or encourage the Client’s openness.

To set the stage we are looking for Clients to share, or be prompted to share, more information that will help us to come to an agreement based on common interests. To do this we want:

  • Clarity around differences.
  • Agreement on a process of discussing differences and solving problems.
  • Agreement to the extent of collaboration needed to secure a good outcome.

These outcomes can occur naturally especially with Clients you know well. But often there are elements that need proper planning and execution.

Set the Stage - Reflection


In your workbook, on page 46, is the Negotiation Checklist. Take a few minutes to rate how ready you are to negotiate, in relation to Set the Stage, with the case study Client.

Next, consider and answer the following questions related to your own Clients:

  • How will you determine and adapt to the Client’s predominant negotiating styles?
  • What are your sources of power?
  • How will you create an effective lead-in statement for your Client?

Next Steps

The next tutorial in this series will cover how to Identify Interests Behind Positions. 

 


During this tutorial you completed several activities in your workbook. Be sure to save your changes on your local computer. You will use this same file again in the next tutorial.

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