Goodwill is a Bottomless Pit
Walking past our marketing colleague’s desk, I noticed she was working on a blog with the title “The A-Z of Negotiation” and it caught my eye. If you haven’t seen it yet, it’s coming.
I thought it was a great topic and I offered to help knock it in to shape with her, to which she snapped my hand off and accepted. We finished the piece off and five minutes later I received an email from her that asked if I could write another blog. It was in that moment I realised I gave something of value out of goodwill. I gave a little and marketing wanted more.
Now I'm not suggesting that you need to negotiate everything. You'll quickly turn off family, friends and colleagues if you always require something in return.
In commercial negotiations be careful as generosity produces greed not gratitude. So, if you give something up, the other party will probably ask you for more and you’re then setting precedent.
So, here I am writing another blog because of my goodwill. With that in mind I thought I would share with you some recent examples of goodwill creating greed and setting precedent. I’ll keep the organisations anonymous for this piece.
Goodwill Story 1 – Lounge access for everyone!
A sales person from a large sales team of about 200 people approached her manager and asked for airport lounge access when she travels. She has quite a lot of travel coming up and doesn’t have the required status with the airline yet. The manager replies “That makes sense, no worries”. Goodwill. Word of the lounge access approval travels quickly amongst the team. Guess how many requests for lounge access then follows? 18, some of which have little travel requirement. The issue is still not resolved as yet but many more team members have been given access and now there is policy writing on what is a ‘fair’ amount of travel in order to be awarded lounge access.
Goodwill Story 2 – Can we have a discount?
This is a common and reoccurring situation for sales teams across all industries and it seems unlikely to end unless negotiation skills are built more effectively. I was working with an IT sales team who revealed that whenever renewal time rolled around their customers would relentlessly hit them up for large discounts. As a result, they perceived the customer to be greedy. After a few questions about the initial deal, I discovered that the team would typically discount 10-20% when put under price pressure. Yes they would trade for the deal, but it is not surprising to hear that the conversation had proceeded as it did... The customer has learnt to put price pressure on the sales person and they always give in. In this instance it’s the sales person who has set the precedent and who has shaped the behaviour of the customer. It's therefore no surprise to me that at renewal the customer continues to ask for a 25% discount to renew.
Goodwill Story 3 – Just Wait And See What Happens Next…
This industry is under massive political pressure at the moment. The government laid out a big stick this month, that if the major players do not review their pricing to the public, the government will ‘look’ to intervene. It’s probably not possible for this stick to be used but feeling the pressure, one of the major players then follows by giving a fairly chunky discount to over 100,000 of its customers. Goodwill. Let’s see what happens but here’s my prediction: The other major players will have to follow suit from the ‘goodwill’ offered by their competitor to its customers. The government’s use of a sanction got a result without little effort. They will apply it again and get the industry to jump again. Bad precedent set.
To wrap up, if you ever hear yourself say “Happy to” or “No problem” or “No worries”, that’s giving something up in goodwill. Don’t expect a thank you, be prepared that they will just ask for more. Have a list of variables ready to trade to stop this happening.