As promised from last week, this is the first of five fundamental skills for effective negotiation. These skills aren’t rocket science, nor are they really much more than common sense. But they are oft forgotten when someone starts (or finds themselves in the middle of) a negotiation. These skills are presented in the order in which they will be used, but keep in mind that you will probably need to bounce between the skills once the negotiation starts.
Information Gathering, then, is the first fundamental. The process starts by understanding why it is that you’re coming to the negotiation table. You want something… but what, exactly? Is it a tangible item? Is it a service? Perhaps you’re selling something? Do you know how much it might cost? Do you know how you’ll use what it is that you want? Does it have a specific size, shape, color, texture, smell, etc?
In other words, you’re playing 20 questions with yourself to determine the boundaries
of your desire. If you do this stage of Information Gathering correctly, you will have a deep understanding of your true need as opposed to your “wants.” Or, put another way, you will know your “must have’s” versus your “like to have’s.” And, if you’re already thinking a few steps ahead, this becomes important when you’re making concessions. You ‘give up’ your like-to-have’s in favor of keeping a better outcome for your must-have’s.
The second stage of Information Gathering is flipping the coin and trying to go through the exact same exercise, only this time as if you were your opponent. Using a seller/buyer scenario, it’s easy to pick out the parts and figure out the basics. The seller has a product or service they want to sell. The buyer has a desire for a product or service similar to what the seller is selling. The devil is in the details.
From the seller’s perspective, they need to know the ins and outs of their product offering. What problem does it solve and in how many ways? How much does it cost and what are the potential for discounts? What add-ons are necessary or preferable to enhance the basic product? What timeline do they have with respects to making the sale?
For the buyer, the issues are similar: What problem am I truly trying to solve? What additional features would be nice but not necessary? How much money do I have (budget)? How much money would I like to really spend (cost)? How long will this product last?
You can see the Information Gathering process at work in this scenario, as well, if you think of a car buying example. One of the first things that the dealer’s salesperson will ask a new person walking onto the lot is “What kind of vehicle are you looking for today?” and “How much are you looking to spend?” They’re not trying to ask to help the buyer make up their mind – they’re trying to discover the boundaries for the negotiation.
If you, as a negotiation participant, fail to complete the Information Gathering process, the other side will, in many cases, be able to sway your decision because they will “sell” you on their position before you’ve had an opportunity to discover what your own position is. Additionally, they’ll possibly be able to convince you that something has an inflated value, which makes its concession more important or your desire to obtain it more valuable.
For example, if you haven’t researched my widget – which has an incredibly cool, expensive-looking case (yet cheap for me to include), you may want the case included and feel like you “won” if I let you have the case but don’t decrease the price much. But for me, it was an easy concession to make. I included something cheap from my perspective, gave you a pittance-sized discount, and you felt like you got something huge.
Think about this the next time you go cell-phone shopping and the saleperson gives you a case and car-charger “for free” but doesn’t discount the cost of the phone. I hate to tell you this, but the car-charger and case each are purchased from China for about $0.25, resold to distributors within the US for about $1.00… and sold to consumers for $10+.
Granted, having this knowledge won’t enable you to leverage it when you’re buying your next new cell phone – you lack one of the other Fundamental Skill results – Power. But if you’re a corporate buyer negotiating with the cell phone carriers for cell phones for your entire 4,000+ line organization, don’t let the ‘free case/charger giveaway’ stop you from getting a better price on the equipment and monthly charges.
But of course, having Information doesn’t mean you know how to use it. Next week, we’ll discuss the second Fundamental Skill: Strategic Thinking.