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TRADING WORDS
Negotiation Pack.

INTRODUCTION.

This "Negotiation Pack" is intended as an introduction to the use of English for negotiations: any negotiator will tell you that only experience can really teach you the best way to negotiate. It also, like the series, deals almost entirely with the language side of negotiation - negotiation "skills" and "tactics" are not discussed, except where they coincide with the language areas. This Negotiation Pack was compiled with the kind co-operation of Specialist Language Services, York. The pack is not intended as a vital study aid to the BBC English series "Trading Words", it merely highlights and elucidates some of the same points.

In any negotiation, there are four key points:

1. You must listen carefully to what your opponent says. The important thing is to find out what is in his mind; you know what is in your mind already.
2. Everything is always conditional: no agreement should be reached until you are satisfied with the conditions on offer.
3. Remember that your opponent is listening carefully to everything that you say. Think carefully about the effect of your words before you speak.
4. Whenever you are quoted a price, you should always ask one of two questions: what does that price include? or How do you arrive at that price?

Good negotiating!

THE PHASES OF A NEGOTIATION :

MESSAGE:What is really being said?
IDENTITY:Are you talking to the right person?
OFFER:Everything is conditional - don't commit yourself.
CONFLICT:Make certain your words have the desired effect.
SETTLEMENT:Agree what you have agreed.

THE USE OF THE CONDITIONAL.

As all negotiations are conditional, it's wise to make sure that your language should reflect the fact. The construction "If....... then....." is the simplest and safest way of ensuring that the conditional nature of y the agreement is maintained: it serves to link your offer with something that you want in return.
For example:
If you bought 3,000 units, then I would think about a discount.
If you offered me a 10% discount, then I would consider buying a larger quantity.
If you agreed to pay within 30 days, then we could offer free delivery.
If you offered free delivery, then I would consider paying within 30 days.

At times you may hear, or may find it more appropriate to use a "mixed conditional", a structure that is grammatically incorrect, but which helps in making your opponent's position firm, while keeping your position flexible. For example:
If you buy 3,000 units, then I would think about a discount.

MESSAGE.

In many ways, the MESSAGE stage of the negotiation continues throughout the negotiation. A MESSAGE is a signal sent, consciously or unconsciously, between the parties who are negotiating. It can be a response to an offer, or it can be an enquiry to try to find out what movement there might be on a particular issue. Their key point about the MESSAGE, though, is that it is never communicated in plain language - if you like, we could say that it is in code, and so needs to be decoded by the careful negotiator.

In its simplest form, it could occur in an argument between a man and wife who are discussing where to spend Christmas day. If the man says "I don't want a big family Christmas - it's so expensive, buying presents for everyone", then he is not only saying that he doesn't, want a family Christmas, but also why he is against the idea. The message here is obvious, and some movement towards a settlement could be achieved by his wife saying something like: "Okay - why don't we all agree not to buy any present costing more than 3.00 pounds, this year?"

MESSAGES in business negotiations tend to be more subtle, but careful listening will usually reveal an indiction of the speaker's feelings and will help the negotiation to be resolved. For example, when you are discussing this price, the words:

"That is our standard price" do not mean that the price cannot be negotiated - the meaning is simply that that is the starting off point: the price which is listed for the customer. There is similar room for manouvre in the statement:
"We never negotiate on price"
because hidden within that flat statement is the message that all other aspects of the deal can be negotiated.

In a negotiation, MESSAGES are passed constantly from one side to another, and the experienced negotiator listens carefully and decodes what he hears. Here are some examples of the kind of common messages in their coded and plain forms:

CODED: DECODED:
That is our standard price-Ask for a discount
We cannot negotiate the price-We can negotiate everything else
We don't normally deliver-We sometimes do
These items are difficult to produce-Make a bulk order and you'll get a discount
We don't want to pay that-We will if we have to
We can't agree that, as it stands-Something in the conditions has to change

There are hidden messages in all of these statements.
Consider what responses you might make in a negotiation:

1. You ask your boss for a rise, and he says:
You can't expect to be paid more than the rest of the team.
2. You discuss where to spend the evening with your partner. They say:
Let's not go to your parents: your mother is such a terrible cook.
3. The hotel manager says to you:
Air conditioning normally costs 10 pounds a night extra.
4. Your car mechanic says to you:
I've got so many jobs to do that you'll have to wait - regular customers have priority.
5. Your travel agent says:
We can't offer a discount on the price of this holiday, sorry.

ANSWERS:
1. Ask to be taken out of the team.
2. Eat out in a restaurant.
3. The key word is normally. Find out what the "special" price might be for you.
4. Find out what makes someone a regular customer - it might just mean opening an account.
5. Ask what "extras" might be available within the price of the holiday.

IDENTIFY.

It is essential to IDENTIFY the person that you're negotiating with. If you don't, then you could waste a lot of time before you find out that they don't have the necessary authority to negotiate. At the same time, it is important not to underestimate the value of talking to a subordinate, and it is also crucial that you should not alienate them or make them feel unimportant.
Here are some useful phrases to discover the precise position of the person you're talking to:

Could you tell me something about the purchasing arrangements in your company?

Perhaps you could draw me a little organigram (organisational chart) of your company, and show me
where you fit in.

If we should reach agreement, what other stages would we need to go through before finalising the deal?

Do you think there might be anyone else who would find our conversation useful?

All of the above are very neutral enquiries that do not embarrass your opposite number, but should still give you the information you require.
If you find that you are talking to the wrong person, this is not the best comment to make:
My Goodness! Is that the time? I really must be going!

That won't make you any friends!
A better line of action might be to ask to make a return visit, during which you could meet your opposite number again, together with his boss:
Perhaps there would be a time when you and Mr. Smith will be free to discuss this.

Or, if you'd rather not make a return visit:
Do you know whether Mr. Smith would be able to join us now?

These responses don't make the subordinate feel that he is of low status, and at the same time they serve to get the appointment with the man you really want to speak to: Mr. Smith. Here are some other examples:

Do you think you could ask Mr. Smith to give me a call about this, if you think he'll be interested?
Perhaps you could tell Mr. Smith about what we've discussed, and give him my number?
Perhaps you could talk to Mr. Smith, and tell him to expect a call from me.

Consider what you might say in these situations:

1. You discover that you've been talking to the manager's assistant, and that he doesn't have authority to negotiate. He says:
Well then, what terms are you offering?
2. A similar situation to that above, and the comment is:
What kind of discounts would you offer for large orders?
3. The same situation, the same character, who says:
Can we talk about money? Your prices seem to be very high.
4. You discover that you're talking to someone of quite low status, with no real authority at all. They say:
Your product list looks very interesting. What do you have that would suit our needs?
5. The person you're talking to does not have authority to negotiate, and is not being very helpful. He says:
I'm not sure that you have anything that interests us.

ANSWERS:
With all of these situations, you need to be careful not to embarrass the person you're talking with. Your answers need to make it clear that you wish to talk to someone with the authority to negotiate, but at the same time, you, must keep the subordinate on your side.
1. Perhaps we could reach final agreement on terms together with Mr. Smith?
2. Could we leave the discussion of discounts until we can speak to Mr. Smith?
3. Perhaps Mr. Smith and I could come to some arrangement about the price when we talk about this.
4. I think that Mr. Smith would be especially interested in one or two of our products. Perhaps he might like to join us?
5. Perhaps if I could speak to Mr. Smith, he might like to decide for himself.

OFFER.

The OFFER stage of a negotiation is the one in which each side puts forward its most favoured position. What you ask for should be the most you could reasonably expect, without being obviously much more than the other side is able or willing to pay. In a typical negotiation, the offer stage will be returned to several times in the course of the discussion with the offers changing as the negotiation continues and the two sides move closer to agreement.

During this stage of the negotiation it is especially important to remember two of the key points mentioned in the introduction. It is during this stage that:

(1) You will learn more about what is in the mind of your opponent.
(2) You must take care to keep everything conditional.

A comment like:
We will give you a discount of 10% on the list price if you buy 5,000
is a statement, not a clearly conditional offer. At best, it could lead to an argument if your opponent takes it as a general offer of a 10% discount and tries to hold you to it.
In general, it is a good tactic to be firm about what you expect from your opponent, while keeping your own position as flexible as possible. It is also wise to remember the "If.....then" construction. Bearing this in mind, a better alternative might be:
If you agreed to buy 5,000, then we would consider a discount.

The amount of this discount is unspecified, and you can leave the percentage unstated until you get clear information about the quantity being ordered.

Consider your response to the following situations in a negotiation:

1. Your opponent is a much-valued regular customer, but is experiencing cash-flow problems. You want 5,000 pounds paid within 30 days, but would accept 5,000 pounds within 90 days if your opponent agrees to a service contract. He says:
Sorry, there's no way we can pay within 30 days.
2. Your boss knows you want to leave, and has offered you a rise of 500 pounds a year. You want 1,500 pounds a year and an extra week's holiday. He says:
So, congratulations. How are you going to spend the extra money?
3. You're about to buy a car which has a price of 6,000 pounds on it - and you also want a service agreement for two years. When you ask the question: "What does the price include?" the salesman replies: "Delivery and a full tank of petrol".
4. You're interested in buying a holiday in a Pacific paradise. At 3,000 pounds the price is more than you want to pay, and you also want to have extras like free travel to the airport and free breakfast included in the final deal. Your travel agent says:
Ten days in the sunshine. You'll love it.

ANSWERS:
1. If you agreed to a service contract, then we would consider giving you more time to pay.
2. If you give me an extra 2,500 pounds a year and two weeks' extra holiday, then I might be happy to stay with the company.
3. If you give me three years' free servicing, then I'll think about paying 5,000 pounds.
4. If you arrange free travel to and from the airport, free meals in the hotel, and make it a fourteen night holiday, then I might be prepared to pay 2,500 pounds.

CONFLICT.

Although this area of negotiation has been called CONFLICT, that is not to suggest that it necessarily involves fierce argument or friction between the two parties. It is obvious that in any negotiation there are going to be differences of opinion on what the price and conditions should be, and these differences need to be resolved before the negotiation can be concluded. The CONFLICT stage is this stage of disagreement, during which the two sides attempt to reconcile their conflicting ideas of what is an acceptable deal.

It is an area in which one must be very careful about the effect of the language being used. You may not wish to appear too weak or to be giving too much away; you may wish to appear constructive - or you may wish to force the negotiation into deadlock with a very strong approach.
The most positive way of looking at this stage is to see it as a bridge back to the OFFER stage or onto the SETTLEMENT stage. Only by keeping the door to agreement open can you hope to reach any satisfactory conclusion in the negotiation.

To an aggressive comment from your opponent like:
"If 10,000 pounds is the best you can offer, I'm going"
the possible responses are many, depending on what you want to happen next.
If you response is:
"Goodbye"
then it means either that you don't really need to do business with him, or that you are confident that he is bluffing and will make another offer just as he rises from the table to leave.

One almost certain "loser" in this situation is to preface a new offer with the words "how about", as in:
"How about 11,000 pounds?"
This sounds very weak, and can all too easily be dismissed with a simple :
"No!"
The same can be said of the following phrases:

"Would you accept...?"
"Shall we say...?"
"What if I offered...?"

What might be a good comment in response to aggression is something like:
"What about a coffee?"
This can give the two sides time to cool down and consider their next move. If things do get heated and it seems little progress is being made, get back to the OFFER stage by saying something like:
"Let's just look again at what we do agree on, shall we?"

SETTLEMENT.

The SETTLEMENT phase of the negotiations covers both agreement on individual items in the package, like the price, and final agreement on all aspects of the deal. Once again, this part of the negotiation has to remain conditional, and the language of this area should enable you to clarify and summarise what you have agreed. It is important that you should not commit yourself to something without being entirely clear on what it is. You may not be committed until the contract is signed, but a lot of time and confusion (and bad feeling) can be saved by making the language of this area help the two sides understand not just that they have agreed, but what they have agreed.

If the meeting ends with your opponent saying: "That's settled then. I'll fax you with the details", and you aren't exactly sure what the fax is going to contain, then you haven't managed this phase of the negotiation successfully.

It is important, too, that there should be no ambiguity in the agreement: if the deal states that any Repair and Maintenance contract should take account of "reasonable" wear and tear, then it is vital that the definition of the word "reasonable" should be agreed.
As any SETTLEMENT must be conditional, then it is important to repeat the conditions and clarify them before the negotiation is completed. In effect, you must agree what you have agreed, so there is no confusion. This applies both to points of agreement as they arise, and to the final settlement at the end of the negotiation.

Consider the different effects of the following replies to the salesman's offer:
"If you order 350, we could consider a discount of 10%."

1. Fine, we'll take the 350.
2. I agree.
3. If you offer a 10% discount, then we would agree to order 350.
4. So you're offering a 10% discount on an order of 350, is that right?

And compare these responses to the buyer's proposal:
We'll take 300 at list price less 15%.

5. Fine, when do you want them delivered?
6. If you placed an order for 300, then we'd offer a 15% discount on the list price.

ANSWERS:
1. The buyer has agreed to buy 350 - but has not linked his order to the agreed discount.
2. To what? Is the buyer certain? Much safer to restate what the deal is.
3. Safe and sound: a restatement of what the agreement is, to avoid confusion.
4. No commitment here, at all. Just a careful confirmation of the offer.
5. Once again - is the seller certain what he has agreed to?
6. Safer: a reiteration of the offer which is linked to the agreement.


How would you react to the following situation in a negotiation?

1. You have returned from a party to find your son has invited his friends for dinner, and that they have made an incredible mess of the house. He says:
"Sorry - just go to bed and I'll clear up, Okay?"

2. After a long and exhausting negotiation, you have succeeded in reaching agreement. Before you have a chance to summarise and clarify each point, your opponent says:
"That's all settled then. I'll get the contract to you by tomorrow."

3. After several hours of bargaining, you get your daughter to agree that she will only go out three nights a week with her friends - after she has completed her schoolwork. In return, you will give her an increase of 100% in her allowance. She says:
"Can I go now?"

ANSWERS:
1. Sounds Okay - but make sure that all of your conditions are agreed: will he put things back in the right place, without breaking them, etc.
2. Just take the time to go through everything that you've agreed, before leaving the office. It might also be wise to prepare a brief written summary of the agreement.
3. Yes, she can: but only after she makes it clear that she understands the terms of the agreement.

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