Agreeing Through Negotiation

Negotiation is the agreement style that partners use. It is designed to make sure that every partner wins something and that no partner loses everything. If any of the partners come away without a win, they have not been negotiated with; they have been commandeered. They have been mastered, not partnered.

What is it that each partner in a partnered negotiation must win? Each must win new, improved profits. Customer partners must have their profits improved by coming away with a lowered cost or higher revenues or earnings. Supplier partners must have their profits improved by coming away with a lowered cost of sale and a higher margin.

In vendor selling, negotiation centers on price. As soon as a price is proposed, discounting begins. Vendors often mistake this process for negotiation. They call it "negotiating price" when they really mean "discounting price." Discounting price is not negotiation because the suppliers cannot win. They can only limit their losses. If their margins are not directly attacked, they will be subjected to other forms of price pressure such as requests for free goods and services, advertising or promotion allowances, free carrying of inventory, and so on.

Because price does not exist in Consultative Selling, partners do not include it in their dialogues. Instead, they negotiate about the yield from the consultative substitute for price: investment. How much can it earn? How soon can it start to flow? How sure can we be—how can we be even surer—that we will receive the muchness we have planned as soon as we have planned for it?

These are the three subjects of partnered negotiation. Both partners want to maximize the sureness of their deals together. Without sureness, everything else is fanciful; Profit Improvement Proposals will be fiction, like a midsummer night's dream. Within the constraints that sureness imposes on the partners, how much return can they manage from their investments, and how soon can they hold it in their hands?

In your role as a consultative seller, you must always be ready to propose more muchness or soonness. The way you do this is by constant what-ifing: What if we add this positive value to our proposal: What effect will we have on return? What if we subtract this negative value from our proposal: What effect will we have on return? With PIPWARE, each option takes only a minute to answer.

The best partnerships consistently earn the highest returns from their investments. They realize that each of them is making an investment of money, time, and resources, and that each must maximize its payoff. As a result, it is not just the consultative partner who proposes and the customer partner who disposes. Both propose to add the maximum value to their mutual proposals. Both what-if each other so that their proposals are true joint ventures. Joint proposals, in which each partner is invested both personally and professionally, are the outcomes of partnered negotiation.

If you are asked how you know you are practicing partnered negotiation, a joint Profit Improvement Proposal is not only your best answer; it is your only answer