4 Most Emotional Terms in Negotiation

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  1. Price
  2. Value
  3. Fairness
  4. Leverage

Price:

The main reason this has so much emotion attached to it in a given negotiation, sales process, or interaction is because more often than not people think this is the only thing that matters. Due to this misplaced notion, price is highly misunderstood hence the reason for such an emotional context. What most don’t realize is that a back and forth over price with a counterpart is usually a cover for the actual issue that is bothering them, for example, autonomy, protection, or even a general hesitancy due to a previous bad experience with someone else in your industry. I have not ever met anyone in this world that is not willing to pay good money for a product or service, which in my mind almost makes price irrelevant. Another reason price is such an emotional term is because of the amount of time put into it, running numbers deciding what you can or cannot live with. All good business people know that the profitability of a deal is not realized at closing or when the “price” is agreed upon, it is realized during implementation.

When it comes to price we have several ways of teaching how to deal with it. There are 3 different bargaining systems we teach, each one designed to combat the one before it. Our approach is that we have our price that we are going to get and there is no changing that is based on the movements of our counterpart. Simply put price is a term, just one term in the plethora of moving parts that affect a deal. Spending too much time on it means you have not put enough effort into the other components. Along with that we have found you can have a positive influence on price by gently pushing on non-price terms.

 

Value:

This one is probably my favorite on the list! I transitioned from being tired of hearing the word value so much to making it a point to drill down on what counterparts mean by value, meanwhile doing my best to cut it from my vocabulary whenever possible. Everyone likes to harp on their uniqueness but no matter where you work or what country you are from, value propositions and identifying value has countless hours of effort put into it. What is value really? Can you define value without looking it up? Don’t worry so much about it. Every time this word is used in business or negotiation it has a different definition based on context and the person. Next time someone uses value ask them to define what exactly they mean, it might help you uncover a black swan in the conversation. People make decision based on what is of importance to them and people value the things they see as being important. Which by the nature of that system makes value an emotional concept. Now here’s the kicker: At least 66% of the time what they value will be different than what you value.

Fairness:

This is a really interesting one. Some people have a genuine regard for being fair and may even share your same view of fairness. Others use fairness as a trap or a manipulative tactic in negotiation. The real underlying factor here is that fairness, for one reason or another, is held in high standard by everyone but is defined differently by everyone. Due to this phenomenon and basic human nature reactions, people will walk away from deals that actually make them better off because they “feel” as though they haven’t been treated fairly – by whatever personal bias definition that that may be. One of the main negotiation sayings that we live by here at Black Swan is “Ignore human nature at your peril”.

 

Leverage:

Leverage is something that everyone wants but has no idea how to get. What’s worse is the people that feel they have it, deep down know that they didn’t earn it and that they just happened to stumble upon it. These individual are generally willing to exploit this so called strength out of fear of losing. People will hold themselves hostage because they feel they have no leverage. People will make inexcusable decisions based on the thought of lack thereof. As far as we are concerned at Black Swan there is no such thing as leverage. At the end of the day, no one can ever make you say yes. Just like in life when we say you always have a choice, there are always those people that want to say I have no choice. Well you always have a choice, not liking the alternative is a barrier you put in your mind without anyone else’s help. “Don’t believe everything you think”. This is the one term where people will hold themselves hostage over without even realizing it, which then affects a person's’ ability to think and problem solve. There is no such thing as leverage and the only leverage that matters is the leverage that they think you have on them. If someone is talking to you at all it is because you have something that they want.

These four terms are laden with emotional context and once you can wrap your mind around how they work in a given situation you can only strengthen your position. The real trick is every time one of these terms is used they have a different definition. They will never be defined in any interaction the same way twice in a row. Having the flexibility and balance to be able to foresee these things and adapt is what will set you apart. For those of you that are unfamiliar flexibility and balance they are the top two components of physical power. We at Black Swan would contend they are also to top two components for negotiation power as well.


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