The Art of Bargaining, Positional vs. Interest-Based Negotiation

https://f3fundit.com/the-art-of-bargaining-positional-vs-interest-based-negotiation/

by loscoconuts • 7 years ago

140 23 7 years ago

To add to this (writing too much today), most people you will encounter have a positional bargaining approach because it's the default position of a buyer mentality. Persuading them to see value in an interest based approach is a lot of work and the biggest risk is they will walk away and find someone else they can bully. You dodged a bullet, but also the value was destroyed.

The more recent work on negotiations includes things like salience models, which are more about building coalitions to apply leverage on a point person instead of persuading them with reason and principle. It reflects reality better.

Enterprise sales are a good example, where instead of just winning a feature bake off or doing a good pitch, you need a full coalition of parties to prevail over the alternatives and move the sale forward. This makes sales more of a complex political campaign than arguing and demonstrating to win a judgment and verdict.

The strategy in these negotiations is different, and more about eliciting information about needs and motives of coalition parties to align them toward your decision. The tactics involve some traditional negotiation techniques like inventing options and proposing if/then points of incremental agreement, but they are part of a more abstract play.

So, learn negotiation , but short version: the map is not the territory and the fastest way to select-out is to go in with expectations that people conform to a map.

wenc3• 7 years ago

How does one learn more about these topics outside of googling -- which I just did? (i.e. salience models and building coalitions)

I have to do this daily -- and I'm learning as I go -- but I'm finding books like Getting to Yes (with BATNA and all that) to be a little too theoretical.

motohagiography2• 7 years ago

DeMesquita's predictioneer papers and books, Pfeffer's books on power and management, then more old school would be cialdini's influence. a16z's more pragmatic guide that includes this idea of using upstream interests to close the sale (https://a16z.com/2014/05/30/selling-saas-products-dont-sell-...)

scottm012• 7 years ago

I’m certainly just learning myself, but quite enjoyed Never Split the Difference...

https://info.blackswanltd.com/never-split-the-difference

biolurker1• 7 years ago

There is a nice coursera or edx course on negotiations

a13n• 7 years ago

It sounds nice in theory, but in practice when you're negotiating dollars (whether with a street vendor for $20 or a procurement department for $200k), their "interest" is in making/saving as much money as possible.

wenc3• 7 years ago

Well, not always. Personally and professionally I don't optimize for expense alone (often the wrong KPI) but the ratio of value / expense, subject to constraints around expense, cash flow and specifications.

If you optimize for expense alone, you can get things for cheap but you trade off other things like quality and time. Also, ensuring business continuity for good suppliers is an important KPI -- and if you don't take care, in the end you'll end up with only bad suppliers where it's a race to the bottom and everyone loses.

gav• 7 years ago

On that second point it's important to differentiate one-off or recurring items. It's great to beat up a car salesman as you'll likely never see them again, but not somebody that provides a critical service, say IT support.

I used to work for somebody who would negotiate until the other side wasn't making any money, and I'd talk to vendors who'd lost money dealing with us. No surprise that they would be attempting the minimum required to get paid.

AcerbicZero• 7 years ago

The goal is to appear to be a "integrative" bargainer, while actually bargaining for your own position. There is no "1 size fits all" negotiation strategy, and while I appreciate the article for what its attempting to do, going into a negotiation with the intent on making everyone happy is likely going to end with you being the unhappy one.

This is why when you buy a car, (In the US anyway) you usually "negotiate" with a sales person, who will be running to a back office to relay the negotiation with the manager who is actually the decision maker. The sales person will attempt to (or sometimes even genuinely try) to be the "integrative" negotiator while the manager will act as the adversarial negotiator in the process. This can actually work in your favor on occasion, as I've had a great deal of success by understanding the mechanics of the process, and leveraging the sales persons desire to sell the car against the managers desire to make the dealership (more) money. (Usually by establishing myself as a serious buyer, walking away from a bad deal and then getting a call ~3 days later when someone needs to hit their monthly/quarterly number)

lotsofpulp• 7 years ago

I would say your ability to walk away is the leverage. The manager is always making the final call, and the sales person is just there to enable price discrimination so they can feel out who will cave or not.

rahimnathwani• 7 years ago

The interaction between the salesman and manager is often just a performance to make you think you're getting a good deal. After all, if the manager is thumping his fist on the table (which you can see through the glass), the salesman must be giving you too good a deal, right?

wenc3• 7 years ago

I learned recently that there was a word for that: "kayfabe"

Kayfabe [1] is a concept from wrestling, where an adversarial appearance is staged but portrayed as reality in order to get viewers interested.

Kayfabe is also commonly employed in politics.

[1] https://en.wikipedia.org/wiki/Kayfabe

diN0bot• 7 years ago

"The goal is to appear to be a "integrative" bargainer, while actually bargaining for your own position."

Yes! I negotiate compensations on behalf of engineers (as an engineer --> tech leader --> and now technical consultant working for engineers (and tech adjacent professionals) directly, and not as a recruiter paid by companies).

While accepting a job offer in terms of the total package might be "integrative" in some sense, when discussing any one component, say salary, it is very much "positional."

Job negotiations tend to be among the most impactful negotiations we make, so if you're curious for my take: you absolutely want to be polite and work with the recruiter to find the offer package that works for you, but it's more about effective self-advocacy and making constructive, intentional statements than either "positional cageyness" or "integrative creativity."

In my experience, general negotiation advice doesn't generally apply to heavily imbalanced job/salary negotiations. Companies have more information, authority and experience when it comes to job negotiations, so leveling the playing field means increasing your information, leverage and practice in specific ways. It's not like buying a car or selling a rug... you're beginning a long-term relationship with extremely high stakes!

This comment is maybe less helpful than I intended, so if you'd like to learn more, send me a note and I'll make a better attempt at sharing more concrete tips and scripts.

bitcoinmoney• 7 years ago

Can you share the tips here for everyone to see?

Ididntdothis2• 7 years ago

I always thought the sales man/sales manager thing is just an act. I wouldn't be too surprised if the sales manager didn't even exist or care about about the deal. I have heard this described as "higher authority". The person who does the talking never makes a decision directly but always defers to a real or pretended higher authority like a wife, boss, company board or whatever. Seems like a variation of good cop/bad cop.

Walking away while keeping the door open is almost always the most powerful negotiation technique.

smogcutter• 7 years ago

I’ve gotten some entertainment out of browsing r/askcarsales on reddit, and if the folks there are to be believed it’s definitely not an act (at car dealerships, at least). While there are definitely times where the salesman goes into the office and pretends to talk while they check fantasy football scores, it’s also true that the manager needs to approve every deal and he often has very different incentives than the salesman.

techslave• 7 years ago

no, GP is correct. only in the tiniest 2-3 man lots does the salesperson also set the price.

tvladeck• 7 years ago

This article really, _really_ needs to cite Getting to Yes, or at least their authors, William Ury and Robert Fisher, who developed these ideas, and even this terminology.

ribs• 7 years ago

Quite; their Harvard Negotiation Project was the incubator for this line of research and their book one of the outcomes. It’s strange not to see it cited.

tempguy9999• 7 years ago

Seems like it's stating the obvious, then it says "One other thing that can be used in negotiations is neuro-linguistic programming..."

ISTM the comments here have more value than the article (thanks, commenters).

The Art of Bargaining, Positional vs. Interest-Based Negotiation

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