People focus

May 21, 2018

 Generally speaking, people are not very good negotiators—not because they do not care or try; but because the traditional methods of negotiating that are available today do not work very well. In fact, in most cases they actually cause more harm than good. The reasons these methods do not work very well is they are based on the following four myths instead of the facts:

myth 01: negotiation is all about reaching an agreement

This kind of thinking suggests that once the agreement is reached, the negotiator’s job is finished, and somehow, the agreement automatically translates into performance. The problem with this logic is that agreements do not perform; only people do. If agreements, in and of themselves performed, we would have had peace in the Middle East many decades ago. When you think about it, over the last half century, a number of peace treaties have been agreed to in the Middle East, but still there is no peace.

Again, agreements do not perform, only people do. Not that agreements are not an important part of the process, but agreements are basically worthless if they do not have the commitment of the people who put them together. This being the case, the fact is that negotiation is all about people.

myth 02: people are rational

Since negotiation is all about people, before we can effectively deal with them—which is what negotiating is all about—we have to understand what drives their behavior. Are people driven by reason in that they exercise sound judgement and good sense when they make decisions or are they driven by emotions? The answer is emotions. A recent review of all the research conducted on emotions and decision-making concluded that emotions are the dominant driver of most meaningful decisions in life. The problem with this is, it is not what we were taught in school. The business classes many of us took in the fields of economics, management, finance, and accounting assumed that people are rational but, as it turns out, they are not. To their credit, the cosmetics industry has long understood this. For example, Revlon does not sell make-up, it sells ‘hope’. L’Oréal does not sell make-up, it sells ‘dreams’, and Philosophy does not sell make-up, it sells ‘miracles’.

That people make decisions based on emotion is a fact that must be taken seriously if you expect to be a consistently successful negotiator. If you ignore this fact, you run the risk of trying to reason with someone who is making decisions based on their emotions, and that just does not work. For example, try to reason with your significant other or child when they are angry or upset and you will see what I mean. You have to deal with emotions directly; you cannot ignore them and hope they go away.

myth 03: there is no such thing as win-win

Since negotiation is all about people, the entire process must be win-win. People do not follow through on their promises solely out of the goodness of their heart; they do it because they see a win in it for doing so.

Let me use a cat example to illustrate. Mostly, everyone understands that it is nearly impossible to herd cats. Picture yourself in a bedroom at the far end of your house with three cats sleeping on the bed and your job is to herd them into the kitchen at the other end of your house. How successful would you be? The answer is: you would be wasting your time.

Now, picture yourself standing in the kitchen holding a can of cat treats while the same three cats still sleeping in the far bedroom. When you shake the can of cat treats so the cats can hear it, what happens? They immediately come running into the kitchen, meowing like crazy and start nuzzling your legs.

Let us examine these two methods of motivation. With the first method (herding), you focused only on your win (getting the cats into the kitchen); there was nothing in it for the cats. With the second method (shaking the can of cat treats), you focused on a win for the cats. As a result, you succeeded in connecting what the cats wanted (their getting a special treat) with what you wanted (getting the cats into the kitchen). Thus, through almost no effort on your part, you were able to get those same stubborn, independent cats to do exactly what you wanted them to do exactly when you wanted them to do it. And what was their attitude when they did exactly what you wanted them to? They were happy, they were excited, they were running, and they loved you. This is how win-win works.

When it comes to negotiation, people are a lot like cats. They do not get all that excited about chasing something that is important to someone else, but they get really excited about chasing something that is important to them.

myth 04: trust plays no role in successful negotiations

Since negotiation is all about people, establishing trust, before you try to work out the details of an agreement is of paramount importance. The reason is that once the trust is in place, information gets shared. And, when information gets shared, the process of negotiating gets easy and becomes fun because you and your negotiating partners are working together instead of against each other.

The process of establishing trust is called relationship building. It is like the dating that takes place before two people start to talk about getting married. Very few people talk seriously on their very first date with someone they hardly know. The same thing is true when it comes to negotiation.

I came across a study in the San Francisco Chronicle that dealt with salespeople making first-time sales calls on new customers. The study found that it took an average of five to seven sales calls over a six- to nine-month period of time before a salesperson got anywhere with a new customer. Why does it take five to seven calls over a six- to nine-month period? This is how long it takes on average for trust to develop between a salesperson and a customer. The lesson here when it comes to building new relationships is to relax, enjoy the ride, and let the relationship evolve naturally—do not try to force it.

success story

Joe Girard was a car salesperson for Merollis Chevrolet in Detroit, Michigan. For twelve straight years, Joe was listed in The Guinness Book of World Records for being the world’s best new car salesperson. During his final year of selling cars, Joe sold 1,425 new Chevrolet cars and trucks. That is 1,425 new Chevrolet cars and trucks sold by a single salesperson during one calendar year.

How did Joe do it? The answer is simple. 65% of his sales were to repeat customers and the other 35% were to customers who were referred to him by his repeat customers. So, the year that Joe got into The Guinness Book of World Records for selling 1,425 cars, how many cars did he actually sell? The answer is none! His customers sold them for him. Why? Because Joe understood that the process of negotiating with customers was all about people. He further understood that if your customers trust you and you treat them right (win-win), they are not only going to buy their cars from you, they are going to tell their friends to do so as well. As Joe put it, “I stand in front of my product as well as behind it.” In other words, before you could buy a car from Joe, you first had to buy Joe. He would not let you buy a car from him until he turned you into a friend. Then, after you bought a car from Joe and you experienced a problem either with the car or someone at the dealership, Joe became your personal advocate and saw to it that the problem was resolved to your satisfaction. Joe also made it a point to stay in touch with his customers after they bought a car from him; he did not forget about them and he made sure they knew it.

Yes, Joe truly loved his customers and they loved him back by providing him with enough repeat and referral sales to make it possible for him to sell more than 13,000 cars in 15 years. As Joe said in his book, How to Sell Anything to Anybody, “All of my customers these days are people who ask for me by name. All of them.”

You too can enjoy the same level of success in your negotiations as Joe once you stop focusing on the four myths listed above and start focusing on the fact that negotiating is all about people.

 Reference

*https://hbswk.hbs.edu/item/the-role-of-emotions-in-effective-negotiations