Inexperienced negotiators fear rejection. They see 'no' as the end of the negotiation and immediately start working on an improved proposal. A skilled negotiator welcomes rejection and sees it as an opportunity to gain a better deal, rather than seeing it as a roadblock to success.
Let’s try to understand what lies behind these different approaches. In many cases 'no' doesn’t mean never and if we probe what lies behind it, we may discover that we have failed to understand something, so then we can address an important issue for the other party.
Once we understand what the inhibition or obstacle is, we can address it in a revised proposal. If we do not understand what’s driving the rejection, then we automatically try to improve the deal, rather than repackaging the existing variables.
The following examples illustrate repackaging.
1. A company acquired a large medical practice and as part of the deal the owner was given a one-year contract for consulting services to the practice for $20,000. After signing, the former owner requested that the contract be extended to two years. The buyers thought this was a request for more money and were about to reject the demand.
However, in response to the question why, the former owner revealed that they had been offered a two-year term as a delegate to an international research organisation. A condition of being a delegate was that they had to be currently employed in the industry. The extension was not about money. Once this was understood, a two-year contract was offered at $10,000 per year.
2. A training company made a proposal to a client for a course priced at $50,000 plus venue costs, tutor travel and accommodation. The total cost would not be known until after the training was completed. This proposal was rejected by the client and the assumption was that the course was too expensive. The seller then attempted to create more value for the client through customization and additional benefits. The client continued to reject the proposal.
Eventually when asked why the proposal had been rejected the client revealed that their internal system required each participant to be billed for the total cost prior to commencing the course. Once this was revealed an estimate was made of the additional cost and the client was told the course cost was $65,000 with no more to pay. The client was then prepared to proceed.
The message? Negotiators should always attempt to ‘repackage’ before improving the offer. More money is not always the key issue for the other party.