I often get questions regarding negotiating on the phone. Is it different from negotiating in person? Is there a different process to follow? If someone does negotiate frequently using this medium, are there any tips, or is there a better way to go about negotiating if the other party is not in the same room?
Being skilled at the negotiating process, I find the question interesting as the venue or medium in which you negotiate should not materially impact the process used. However, I appreciate that in an increasingly globalized world, the opportunity to be in the same room as the party with whom you are negotiating, or simply the commercial pressure to do so, is becoming increasingly rare. Sure, video conferencing has come a long way, but in my opinion there is no substitute for negotiating with a party in real time and in person.
As this question keeps coming up, I have started to reflect more, both on my behaviour on the phone, and the importance of being ready to negotiate on the phone when the opportunity arises.
The process of negotiation is as important for internal phone negotiation, like a project management decision, or departmental priority around resources, as it is for external ones, such as those experienced by teams in customer service interfacing with clients.
The first thing is to consider is whether or not this is an opportunity to negotiate. Does the other party want something from you? Can you realize a better outcome from the information shared during the conversation? If that is the case, this may well be a negotiation opportunity.
(This, of course, is aside from any conversations where you are knowingly going into a negotiation; customer service or purchasing departments and their interactions with clients and customers come to mind.)
I’d like to share a few tips that come in handy once the opportunity to negotiate has been established. These are equally relevant to larger telecom negotiations as they are to quick internal ones where you may find yourself on the phone to someone wanting your time or expertise.
Firstly, if the latter happens, and you are not prepared, find out what they want specifically and then ask if you can call them back - if that is appropriate. Take a quick moment to prepare for the return call. What do you want in exchange for what they have requested? Do you require resources for another project? Do you need help getting approval on a proposal? Do you want to be invited to a meeting with your boss and their boss (if fitting) or a seat on a special project? Once you have established something to trade, that is low cost to them and high value to you, call them back and engage in the conversation.
If you know you’re entering into a phone negotiation then the same applies in terms of any negotiation. You need to spend time preparing. What is your objective? Will you have a strategy? What information do you need, and what information are you going to share? Are you the only person on your team on the call? If not, how will you manage the communication; who will lead, who will remain quiet? Finally what concessions are you going to make, if necessary, during the negotiation?
One “watch-out” is where someone is on the telecom playing a silent role and not introduced. I’ve been part of this awkward scenario in a previous business, and when the other party found out later that I was silently participating in a specific call, it damaged trust and relationship between the two parties. Everyone on the call should be introduced.
If you’re undertaking many negotiations over the phone, I would recommend having a long wish list to give you the ability to trade during your negotiations or call. Some of these will be easy ‘go to’ items you may use over again with a variety of customers.
The core principle of the call is to try not to deny the other party what they want, but to give them what they want on your terms. So being prepared prior to your conversation will assist and most likely help build the relationship and the trust between parties.
One of the big disadvantages of telecom-negotiating is that building relationships and trust with your counterparts can be quite difficult. It is simply challenging to forge a bond with the other party over the phone. Therefore your ability to trade with the other party with wish list items will help you establish this relationship without making unilateral concessions. These types of concessions will only make them think that they can take advantage of your generosity in future. This is especially important as phone negotiating can sometimes feel transactional and so making such concessions will keep the relationship transactional rather than build towards a more productive one by trading with each another.
Take, for example, if you’re having a conversation with a customer who wants an urgent order, or perhaps forgot to submit an order on time. While there may be penalties or surcharges that apply internally, is there something you could request of them in lieu of these things? Even worse, what if you accept the order without consequence just to be “nice” or because processing the penalty is too hard? This will encourage behaviour that can become unmanageable and have serious consequences for your business.
If we take the above example, we could apply items from a wish list, like:
- paying all accounts before shipment is released
- paying particular month end account early to hit quarterly targets or cash flow
- percentage increase in share of business
- commitment to forecast accuracy percentage
- introduction to affiliated business
These are simple items that can be traded over the phone, and thus build on the relationship rather than keeping it in the transactional domain.
Finally, as in all your negotiations, it is essential that you confirm with the other party what has been agreed. My recommendation is that you send an email to them after the call confirming the details; this may be in the form of minutes for an on-going negotiation, or a simple email that outlines the specifics of the agreement. It is an important step, as often phone calls do not start as negotiations, but once you are negotiating you must make sure that everyone knows what has been discussed and agreed.
So, in conclusion, when you are negotiating on the phone you must:
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