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Negotiating The Final Agreement


By: Linda Richardson | 2003-04-17

Question:
When I am negotiating a final agreement, should I do my negotiating by e-mail or over the phone?

Answer:
Face-to-face is usually best, but your question leads me to feel that may not be an option for you. Telephone discussion is next best since in negotiation psychological factors play a role. You need feedback, a sense of give and take, and it is also important to maintain rapport - all of these require two-way dialogue and e-mail is only one-way. An e-mail limits the interpersonal aspects of the exchange and is more open to misinterpretation.

Some tips for phone negotiations:

  • Be fully prepared - identify your opening terms and your bottom line. Know your client's needs. Know your expendables to trade and your must haves (not negotiable). Be prepared to trade for value.
  • Have your important points written on a piece of paper in front of you.
  • Take notes.
  • If you have a number or term on the table and are calling back, don't negotiate against yourself. Let the client make the next move. Ask the client for feedback, i.e. if your price of $8,000 is on the table, say, "What thoughts have you given to the fees I have presented?".
  • If you don't like the counter-offer, acknowledge and ask how the client arrived at the price or term to understand your client's thinking; listen and use what you hear to position your value.
  • Once you state the terms you want (proceed with a benefit to the client), be SILENT. Avoid unilateral concessions. The first to speak is the first to fold.

    If it is important, negotiate in person. If that's not possible, use the phone. It is the one time the phone can be preferable in finalizing one last term as a way not to make a big deal out of the change or concession. For that matter, beware of Friday afternoon phone calls from your clients seeking a "small" term change.


    About the Author: Linda Richardson: President and CEO of Richardson, training consultants to corporations, banks, and investment banks globally. Richardson has 110 professionals, 15 regional offices in the United States, and presence in London, Australia, Singapore, Latin America, and Asia. Clients of Richardson include KPMG, Federal Express, General Mills, Tiffany & Co., Dell Computer, JP Morgan Chase & Co., Citibank, Chubb Group of Insurance Companies, and Kinko's. Visit http://www.Richardson.com.