Value Driven Negotiation - Present Positions and Trades to Reach Decision

Welcome to Value Driven Negotiation - Present Positions and Trades to Reach Decision

Welcome to Value Driven Negotiation - Present Positions and Trades to Reach Decision


There are a total of six tutorials in this learning series. This is the final 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 Present Positions and Trades to Reach Decision tutorial you will:

  • Create your negotiating plan and establish your trading ranges.
  • Assess your anchors to determine whether you should make the first move.
  • Establish best and worst case for each negotiable issue as well as your walk-away position.
  • Identify and employ tactics that support a collaborative negotiation strategy.
  • Understand common tactics used by Procurement and how to best respond.
  • Learn how the power of working as a team can help to strengthen your negotiating position.

Positions and Trades

Positions and Trades


At this point in the negotiation stage, the Client will be evaluating your positions. In this section you will learn about how best to present your positions, by understanding trading ranges, effective sequencing of offers and anchors.

Understanding the Trade Range

A trade range is the monetary value, for a package of services, between your opening offer, and your walk away position. It is critical to determine this prior to starting negotiations. 

Ensure that you understand and follow Nielsen Proposal Review processes. Ask your manager if you are unsure.

Trade Range - The Limits

Both ends of the trade range (or trade limits) need careful consideration to ensure:

  • You don't "give away the business" by offering too much service or product for a particular return.
  • You don't "leave money on the table" by not getting as much money as you could.

The sequence that you plan for these limits is important.

  • You always plan your worst limits first and then, your best position. After that, you calibrate your acceptable position. Your target position is where you think it is realistic to agree and move forward with the Client.
  • You will always use your best offer as your opening position. Your worst offer is there as part of your trading navigation system and is a position of last resort.
  • Staying within defined trading ranges can protect you from making decisions that are harmful to your interests.

As you decide what your walk-away position is before the negotiation, also plan an alternative.

  • Sometimes this is called the best alternative to a negotiated agreement, or BATNA.
  • By seeing what limits they have, you should begin to see a range of target agreements between your BATNA and the customer’s.
  • If you each have a good alternative to fall back on, both you and the Client will have to work hard to meet one another’s prioritized interests.

Sequencing Your Offers

In a negotiation it is important to understand what sequence you will use to present your offers. Best practices are:

  • Order your options from lowest to highest value.
  • Focus on analysis of interests and issues.
  • Use the Trading Matrix to sequence only the issues in the upper two quadrants of the Trading Matrix.
  • Offer a planned and credible series of moves to preserve Nielsen's best positions as long as possible without risking deadlock.
  • Sequencing your trading positions is crucial to set the frame work for trading, provided that you ensure no one trade is agreed upon until all offers have been made.
  • Sequencing enables you to stay in control as much as possible.

Trading Matrix 

Sequencing - What Happens If?

Click each question 'i' to reveal the answer.

Sequencing Example

You have already set your best and worst limits to establish your trading range for your Client. Now, you ask yourself:

What is linked to what? What am I not prepared to concede without getting reciprocal value in return? 

Negotiating is a lot like playing chess or cards. Each move you make in your sequence then requires a move back from your Client. This is called the Law of Diminishing Moves. Here are two examples: Below are the differences between the two examples and why they are important? 

Workbook Activity - Case Study - Sequencing Your Offer

 

  • Open your local copy of the Value Driven Negotiations Workbook and turn to page 60.
  • Complete the Sequencing Your Offer worksheet based on what you know about the Client's and Nielsen's positions in the case study.

Anchors - When to Make the First Move


An anchor (also known as the first move or initial offer)is a number or offer that focuses the other side’s attention and expectations in line with your objectives. If you get the Client to move first you can get valuable information that tells you where they are coming from. Or, you could make the first move to take control.

The decision to make the first move depends on......

  • If you believe you have sufficient information, go first.
  • If you suspect you have relatively minimal information, go second.

If you decide to make the first move, remember:

  • Asking for too little – you will not know what you could have received.
  • Asking for too much – you will never know if a deal was possible if no deal was made.

Anchor - FAQ

Click each question 'i' to reveal the answer.

Four Tactics to Deal with Anchors

Ignore the Anchor:

When confronted with an aggressive opening position:

  • The best thing is to deflect it and not to respond directly.
  • You have to acknowledge hearing their opening.
  • Here’s an example of how you can respond: “… I think we may be looking at this contract renewal in very different ways. Let’s try and find some common ground by discussing…..”.
  • In this way, you shift away from the topic and you get back some control of the negotiation.
  • Alternatively, you can counter offer quickly to offset the anchoring effect of the Client’s first offer.

Separate Leverage From Information:

  • Every Client’s opening includes attempts to use “leverage” and provides “information”.
  • The Client tells you what they want (information) and why you should accept it (leverage).
  • If you are not mentally prepared, strong openings erode confidence in your strategy. Here’s where listening carefully comes in. You need to filter out the information from the way it was used. Knowing this helps you stick to your plan and not theirs.
  • Questions to ask yourself:
           - Do I ask for an adjournment? or
           - Do I ask for more information in preparation for an adjournment?
  • Do not fall for the pressure to continue. Get an adjournment, even five or ten minutes helps, to collect your thoughts and recalibrate.
  • The key is to pay attention and distinguish between what is information and what is leverage.
  • If you are unsure test your understanding:
           - “Could you go over that again?”
           - “I am not sure what it is you are asking for...”
           - “What commitment have you made to my competitor?”

Clarify But Don't Dwell on Their Anchor:

  • Information is power and planning questions in response to their likely opening position is essential.
  • Plan questions where you know they have gaps in their positions and motivations.
  • Alternatively, you should plan a response to an aggressive opening with an equal and opposite opening of your own.
  • Always mentally prepare yourself for a surprise, especially when you know the Client is going to be aggressive.
  • Always probe for more information about their position and then change the subject.
  • Don’t respond by giving more information yourself. If you give up information, their anchor will be doing its job – keeping you on their agenda not yours.

Prepare to Say Their Anchor is Not a Basis for Discussion:

  • If the Client’s position is so extreme that it is far outside your planned positions and outside your authority to negotiate, you have to be prepared to say that their opening position is not even a basis to negotiate.
  • Naturally, you have to back this position up with one or two reasons and propose what would be an acceptable basis from which to negotiate.
  • If you judge that you have surprised them and they indicate a softening of their hard line stance then you should be prepared to suggest an adjournment to allow them to “go over the numbers” and suggest more information sharing at a later time.
  • Key Point: When reacting to any “aggressive” or extreme opening positions your focus is re-anchoring the negotiation by finding ways to save face and move away from their demands.


If you want to learn more about anchors, click here to go to a blog post on Harvard Law School's website for their program on negotiation.

Negotiation Tactics

Negotiation Tactics

As we plan for the negotiation we need to consider the sorts of negotiation tactics that will be used and how we will respond. 
 

Tactics Definition and Examples


Tactics:   what people say and do to carry out a strategy or to gain advantage during negotiation. Types of tactics fall along a continuum from transactional to collaborative. The philosophy behind this course is that collaborative negotiation is the best strategy. Collaborative tactics are often good ways of countering transactional tactics.



Please refer to pages 61-63 in your workbook to review the variety of tactics on the continuum along with how you can counteract them with countermeasures. Collaborative tactics are often good ways of countering transactional tactics so keep them in mind as you look at transactional tactics.

Transactional Tactics Frequently Asked Questions

Click each question 'i' to reveal the answer.

Handling Tough Negotiations

An important part of your negotiation preparation and planning is be prepared for transactional tactics and tough negotiators. There are six strategies to consider. We use the acronym "TACTIC" to help remember them.

Category To do
Take a Deep Breath When confronted by a transactional tactic, first take a relaxing breath and a moment to think before you respond.
Acknowledge the Disagreement Acknowledge the negotiator’s comment; rephrase it so that you can open the dialog.
Clarify Concerns Spend time clarifying the position and motivations by using open questions to ensure you have a shared understanding with the negotiator.
Transfer Focus Transfer the focus so that you can reframe the discussion on shared motivations. Defer any points of disagreement until later.
Investigate Alternatives Investigate alternative ways to get to an agreement. Seek the Client’s input or input from other team members. Brainstorm creative ways to reach an agreement. Use this opportunity to increase the value your solution brings to the company.
Confirm Next Steps

Confirm next steps, even if you only summarize areas of agreement and disagreement. Get the negotiator to agree on the current points and next steps.



Below is an example interaction with a client to see TACTICS in action.


TACTICS In Action

Client states:  I need you to increase the client service team size from 4 to 6 full time people, working on-site at our offices, or we have no deal.

Nielsen Response:

  • Take a deep breath!
  • It sounds as though you really value the client service team and I hear that you want to increase the number by 50%. (Acknowledge)
  • I wonder what you want Nielsen to additionally deliver for you that will help you to grow your business. (Clarify)

Client replies:  We need to be more effective in our retailer negotiations and create retailer proposals that will help us improve our distribution and ranging.

Nielsen response:

  • We understand that your products have sometimes suffered from store related issues and can see that helping to address this will be a big focus for you in driving growth. (Transfer focus)
  • I suggest that we talk more in the next few days about how we can help you become more effective in driving sales. Are there any specific issues that you are looking to address? (Investigate Alternatives)
  • We will schedule a meeting for Thursday or Friday this week, does that suit you?(Confirm Next Steps)

Common Tactics Used by Procurement

Oftentimes during the negotiation process you will be asked by the Client to work with their Procurement department rather than directly with them for the negotiation. It is important to be aware of some common tactics used by Procurement and how to counter those tactics. Procurement just like everyone else has a job to do, and it is your job to be ready to work with them through the process.

Click each box 'i' below to see how you can respond to people in Procurement who use these tactics:

Workbook Activity - Tactics Reflection


In your workbook on page 64, consider and answer the following questions related to your own Clients:

  • Consider which tactics you have used successfully.
  • Consider which tactics have been used against you and how you countered them.
  • Think of examples from your experience of a tough negotiator who came across as adversarial or who employed various tactics. How did you react?

Teamwork

Teamwork


Often we go into negotiations alone when we could have the power of a team working with us to strengthen our negotiating position.

While there are definitely times when it might be more appropriate to negotiate alone, let’s discuss when you might want to negotiate as a team and how to put together a strong team for negotiating effectively.

Team Negotiating


When should you consider using a team to negotiate a deal?

  • When the negotiation has a high level of complexity and needs diverse knowledge, abilities or expertise.
  • There is a need for creative, integrative solutions.
  • Diverse constituencies and interests must be represented at the table.
  • There is a need for a display of strength.
  • You need to signal that you are taking the negotiation seriously and with a high level of importance.

As a team you need to:

  • Trust and respect team members.
  • Have sufficient time to organize and coordinate a team strategy.
  • When a deal is very important, you should spend at least twice as much time on preparation as you devote to the negotiation itself.

More team strategy tips: 


Your team must achieve complete unity on your trading strategy:

  • Brainstorm a list of issues that the Client is likely to find most critical.
  • List information that you wished you knew. You may be able to find some answers before the actual negotiation, or else seek them out during talks.
  • Estimate the Client's priorities, BATNAs (Best Alternative To a Negotiated Agreement) and Trading Ranges. This is where a team can be extremely helpful; be sure to explore your full range of knowledge and expertise.
  • Agree on your BATNA and trading ranges.
  • Agree what information your team is willing to reveal and what must never be revealed. Make sure that everyone is clear on this before the negotiation begins.
  • Be confident of the information you have about the other party.

Additional team negotiation coordination considerations:


Key Negotiation Aspects to Coordinate


Coordinate key aspects of the negotiation:

  • What opening offer should you make?
  • When should you make the first concession?
  • How many concessions should you make?
  • When to call an adjournment and how to signal?

During adjournments you should have a process for:

  • Raising new issues.
  • Resolving internal disputes.
  • Having someone play the role of a Financial Analyst, analyzing and assessing new elements under negotiation.
  • Agreeing on concessions or tradeoffs.

Assess Skills and Assign Team Roles

Prior to assigning roles, you should assess your team’s skills. Key negotiating skills include listening and other relationship building skills, a skill for observing and analyzing behavior, acting ability (to convey toughness, for example), questioning skills, creativity and past negotiation experience.

You should then match those skills with the following essential roles below:

Role Skills
Leader
  • Ultimate decision maker.
  • Sets strategy.
  • Calls time out.
Spokesperson
  • This person will be the primary negotiator.
  • Needs to be articulate, not easily disconcerted.
  • Able to follow the team leader and the team negotiation plan.
Financial Analyst Obviously must be comfortable with numbers and have in-depth understanding of financial implications of Client demands.
Technical Specialist Has deep understanding of Client’s business and needs and related Nielsen offerings.
Observer
  • This person takes notes to record progress of negotiations, open issues and so on.
  • They have the ability to listen, observe, and read other people.

Present Positions and Trades Summary

 

Presenting positions is best done by combining issues based on your bargaining platform into what are called “Trades”.

  • For each trade you need to explain why the issues are linked and what movement on one issue will mean to movement on others within the trade.
  • For example: “We are prepared to lower price provided you reduce the frequency of delivery.”

    You will also be expected to specify the limits of what you will offer or ask for. This is your trading range.
  • In other words, you plan ahead to decide what your first offer will be, what your last or best offer will be, and the progression of offers in between the two.

    Combining issues into trades provides room for movement for you and your Client. It is also an opportunity for you to maximize potential gains.

Workbook Activity - Positions and Trades Reflection


In your workbook, on page 65, is the Negotiation Checklist. Take a few minutes to rate how ready you are to negotiate, in relation to Positions and Trades, with the case study client.

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

  • How will you determine your best and worst case as well as your walk away position?
  • How can you turn a concession into a trade?
  • How will you deal with tactics by the other party?

Agree, Withdraw or Continue

Agree on Collaborative Solution


At this point the Client should be ready to make a decision. If the negotiation has advanced to a collaborative solution for both parties, and an agreement is reached, then you can close the deal.

Alternatively, if the Client has persisted in an adversarial way, you may:

  • Accept terms and conditions that will best protect your interests.
  • Withdraw from the negotiation if there is no advantage in continuing.
  • Postpone it until there is an advantage.
  • Continue to negotiate if neither you nor the Client is ready to agree on a solution.
  • Revisit a previous stage of the collaborative process to further explore motivations or positions.

NOTE: Ensure that you understand and follow Nielsen Proposal Review processes. Ask your manager if you are unsure.

Summary

Summary


Let's revisit the learning objectives for this learning series. As a result of these lessons you will have:

  • Improved your skills in clarifying, confirming and prioritizing customer value.
  • Looked for interests behind positions to develop creative options for negotiation.
  • More effectively planned for cost concessions and value trades.
  • Built confidence in developing collaborative tactics.
  • Become better at identifying, negotiating and minimising Client tactics.
  • Applied your knowledge of negotiation skills and approaches through an interactive case study.
  • framework and resources for future negotiations.

Value Driven Negotiation Tutorial Series - Personal Action Plan


In your workbook, on page 66, consider and answer the following questions and complete the required actions:

  • Reflect upon what you’ve learned during this tutorial series and determine three actions you will take as a result. Make your actions SMART (Specific, Measurable, Actionable, Realistic, and Time-bound).
  • Set yourself a deadline, a date for completion or date you will do the task.
  • Consider who you will need to work with to help you achieve your actions.
  • Fill out the Personal action plan in your workbook and bring it, as well as your completed workbook, with you to the instructor-led workshop.

Next Steps


You have completed the Value Driven Negotiation Tutorial Series. You are now ready to complete your training by attending the 1-day classroom workshop. Please register to attend the next available session in your location.

Are you interested in more topics related to Negotiations? Check out these articles to continue your learning!

 


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 classroom workshop.

Congratulations

Congratulations! 

Thank you for participating in this training. Your completion will be recorded in your learning plan and your manager will be notified.



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