Win-Win Is Not Good Enough
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You Need to Know Why Win-Win Is Not Good Enough
Transcript of Win-Win Is Not Good Enough
You Need to Know Why
Win-WinIs Not Good
Enough
Win-Win Is Not Good Enough
The idea of seeking a win-win solution was a great idea when it first became popular.
We were reminded to look out for the other person’s interests as well as our own. Do this and we both win.
The Reality
In reality, the customer isn’t interested in your side.
That’s not a bad thing. It’s the reality.
Think About It
When you are working on a deal for your company, do your first thoughts go to, “is the other party getting enough?”
Probably not.
Think About It
When you are making a major purchase, do you struggle with, “I hope the salesman is making enough. Maybe I should pay a little more.”
Probably not.
“Win” Is the Wrong
Word
“Win” is the wrong word. If someone wins, someone else loses. Sure, we can spin the meaning to imply that we both win. You know better. Someone always comes out ahead.
Win-WinIs
Knot
Win-Win is really a tie.
Do we want to negotiate to a draw? Well, sort of.
Nobody wants to “lose”.
Fear of Losing
Your Counterpart in Negotiation Fears:
• Making a bad deal (Paying too much)
• Entering into a bad arrangement (Stuck long term)
• Buying something that doesn’t solve a problem
There Is a Better Way
Game Theory offers us a better way.
Let me introduce a term: Payoff
Payoffs
A payoff is what the parties to a transaction get. In a simple sale, the seller gets money; the buyer gets a product.
Both parties receive payoffs.
Wait!There’s More To Payoffs
The concept of payoff is a lot deeper than:
Seller gets money. Buyer gets product.
This is where we need to do more thinking as negotiators.
Beyond the Obvious
Payoffs extend far deeper than the superficial exchange.
The seller may need cash now to meet an obligation.
Beyond the Obvious
The buyer may need to negotiate a great discount to save his job.
The seller may need to liquidate old inventory.
The buyer may need the item immediately.
Not Just Sales
We need to think about all the possible payoffs for the other party as we negotiate.
Note: This applies in all negotiations, not just sales.
Their Payoff
Hold on. I said that we need to consider all the possible payoffs to the other party, right?
What about your payoffs? Hang on.
YES!Put Their
Payoffs First
Before entering the negotiation, consider what the payoffs to the other party might be.
I say “might be” because you will never have complete information.
Incomplete Information
We might think “they really need this deal” when they closed a huge deal yesterday. Be careful. Think deeply.
Never forget that your information is incomplete.
Make a List
List the payoffs you know about. Then list payoffs that might be possible.
Like this…
Payoffs
They want this dealIt’s a large deal for them (could strain cash flow?) so…A deposit with the contract would help them and could be used to reduce our price
Subtle Payoffs
Bob has a huge ego. Let him win a concession. What can we let them ‘take’? (Satisfying Bob’s ego is giving a payoff)
More Payoffs
Because they are a small company, filling a large order may be difficult. Let’s let them ship to us in “lots” so they can free up space. We still need the goods in 60 days, but we could let them ship (and invoice) every 2 weeks. Payoff? Space and cash flow for them.
There Are Many
Payoffs
In every transaction, there are many, many overlooked payoffs.
Here’s another example.
Salary Negotiation
You are deadlocked in a salary negotiation. You want $200k and a company car. The company cannot offer you more than $175k and a car.
Win-Win says we split the difference. No!
Lose-Lose
That’s not a win. You get less than you want and the company pays more than it wants to.
How about you accept $87k for 6 months. If you achieve that big goal, you are raised to $205k. (Annually)
Their Payoff?
They get you at the price they set. You get more than you originally required. (Get it in writing)
That’s the way a bonus system works but note that I’m negotiating a permanent salary increase.
Stress the Payoff
You must, in that situation, remember to stress the payoff!
They get you at their price. They realize the benefit of the goal you deliver. And, you take the pressure off the person who wants to hire you. (At least 3 payoffs)
Add More Payoff
If you believe you can deliver, add a provision that says they can terminate you within 90 if they do no see progress toward that goal you’ve set. (Reducing their risk of making the wrong choice is another payoff!)
Get It?
Can you see how important payoffs are?
List as many as you can think of and be ready to add them to the list of real benefits ‘they’ have in working with you.
Maximize Their Payoff
Consider the examples. From offering a deposit to reaching a goal before taking a raise, all have value that you can use to support your offer. (Payoffs)
Fast payment, for example, is always worth a discount.
Stop Worrying
About Yourself
Don’t worry about your payoffs. You will not “give away the farm”.
Payoffs like this are smart and cost very little. AND…
Take the Focus Off
Price!
Too often, negotiation becomes a wrestling match around one point: usually price.
Or, it can be some other sticking point.
Get Off the Dime!
Arriving prepared to maximize the other party’s payoff gives you a huge advantage and reduces the tendency to fall into a showdown over a single point.
Many agreements fail over one point.
Summary
Forget about Win-Win. You’re not going to battle. It’s not a game.
Get what you want by maximizing payoff for the other party. They won’t expect it.
Practice and
Training
You can do a lot with this information. I guarantee you will be a better negotiator if you use this technique.
It’s only the beginning. There’s much more to learn and it takes practice. (We can help)
Contact Me
A short seminar for your team will increase the payoffs to your company. Education pays forever.
Call or email to discuss how you can benefit:
(530) 467-5690 Or [email protected]
TeachU3Es
Chris Reich of TeachU™ is the creator of the 3Es™ System of business improvement. We help companies improve profitability through cost-effective training and education programs.
We believe that Education, Ethics and Excellence are the keys to long term, sustainable success.
(530) 467-5690
You Need to Know Why
Win-WinIs Not Good
Enough
