In negotiation, and in life, everything that you do has repercussions – actions have consequences. It comes back to you one way or another.You cannot escape the consequences of your actions, and you will see the long-term effects of your actions. “What goes around comes around” as they say. Sometimes we get screwed over and there is nothing we can do about it – really? I have never subscribed to this view and a cold, hard look in the mirror by its proponents is generally very revealing. I want to look at this from two perspectives:
Of the four potential outcomes from a negotiation, two include the word ‘Lose’. Any agreement or settlement that leaves one party dissatisfied (the loser) is not clever and will come back to hurt you later, sometimes in ways you cannot predict. This is a typical ‘Win:Lose’ scenario which ultimately turns into a ‘Lose:Win’ scenario!
Let me explain more. A very tough negotiator told me about a hard deal he had wrung out of one of his customers. He had demanded and threatened and negotiated a deal that paid considerably more than any other customer his business had supplied. The customer was a major one (about 15% of the total sales revenue), but the supplier had a technological edge which they felt they could exploit to their advantage. So, he did, and he was proud of his achievement that he had ‘screwed the customer for every last penny’.
We happen to know the customer in question and enquired of the procurement team a couple of years later if the story was true. They told us it was and that, at that time, they had no option but to buy the items at the increased cost. However, they felt so manipulated and ‘trampled all over’ that they decided immediately after the price increase to find an alternative solution and to find a new supplier who would work with them to find a mutually attractive solution. It was difficult but they found one. 18 months later, they terminated the contract with the original supplier and shifted all their business to the new supplier where they felt there was a better level of mutual respect. They described a bitter sweet moment as they negotiated with the original supplier, who was completely oblivious of his customer’s back-up plans. The seller was ashen as he left having been told that the contract was terminated with immediate effect. He lost his job, his business was left with a catastrophic hole in its revenue, and a new competitor was introduced into their market with a cheaper but equally effective product. They certainly reaped that which they had sown.
In another real-life situation, one of my team had a notoriously difficult customer who was threatening to terminate the contract with us. I was told he was difficult, unsmiling, short of time, unfriendly, only interested in own agenda and generally tough on all aspects of our service. I was invited to meet him to defend our position. My account manager was tetchy about this contract – he found the relationship difficult. Consequently, he himself was unsmiling, curt and relatively cold in his dealings with the customer – he was on edge. His briefing to me initially led me to expect a similar scenario. However, I took the opposite view, and rather than leap straight into a confrontation, I decided to engage and disarm the individual. I would not talk about the contract, but only wanted to understand the Buyer’s situation. So, we talked about life, family and values. It was a very different conversation from the one I had been led to expect. The Buyer visibly relaxed and we built some rapport and trust in just one meeting. As a consequence, I changed the account manager for a person with more relationship building skills. This new person was warm, smiling and a good listener. The result was a step change in the relationship, the customer felt appreciated and consequently the revenue grew significantly as we gained an increased share of the spend. So, it transpires that our own behaviours impact those of our customers – and we reap that which we sow!
You see, all our actions have consequences, especially in the difficult world of commercial negotiations. The market can and will change from a Buyer’s market to a Seller’s market, and vice versa, in double quick time. Don't ever be fooled into thinking that your actions don't have consequences, or that there is nothing you can do to change the outcome. Don't think you can get away with bad, short term or tactical choices even if you don't seem to get caught. If the other party leaves the negotiating table feeling that they have lost, they will not forget and they will find an alternative solution even if it takes a significant amount of time and effort to do so.
We can and should still negotiate and strive to get a good deal while treating all involved with warmth, integrity and honesty. It’s amazing how discerning people are. They quickly pick up on this type of behaviour and, consciously or not, they start reciprocating the same way! Remember people are generally infinitely more valuable than any transaction, regardless of the size of the potential upside. Treating people right will always come back around to benefit you in the long run. You always get to reap that which you sow!
