April 17, 2024
Special Report

Win-Win Negotiation: A Sustainable Way Of Doing Business

When the objective of negotiation is not a zero-sum game where one side triumphs at the other’s expense, it is a win-win negotiation. This is the insightful lesson learnt from friend’s experience, writes Murugan S.

“Did you know that win-win negotiation is an art that contributes to sustainable business growth?” My friend, who operates his business in Chennai, asked me this question.

In response, a series of past experiences flashed through my mind, during which some of my bosses were seen bragging about their success in concluding deals at the lowest rates.

“While the concept sounds appealing, I’m sceptical about its practicality. From my observations, people always play hardballs during negotiations. Often, these negotiations devolve into a zero-sum game, where one party’s victory comes at the expense of the other’s loss,” I replied.

“It’s unfortunate that such adversarial negotiations are common in our industry. Many approach the negotiation table as a battlefield, solely focused on ensuring their own success regardless of the cost to the other party. However, not everyone operates this way. I once had a remarkable negotiation experience while dealing with the sale of a high-value item: the worsted carding machine,” my friend shared.

Knowing my friend’s knack for sharing captivating and insightful stories, I eagerly awaited further details.

He began to recount the experience:

The Dreaded Negotiation:
“While I typically don’t dread negotiations, one particular negotiation with a spinner in North India left me feeling apprehensive. Right from the outset, the spinner exhibited a stoic demeanour, making it challenging to gauge his reactions to my presentations. After presenting the details of my machine to all the other technical teams, I had the final meeting with him, the boss! Based on the report from my technical team, your machine meets all our requirements,” he began in a matter-of-fact tone.

I thought to myself, ‘Great, negotiation over! Time to seal the deal!’ But life seldom unfolds as we expect.

“Although replacing our current machine with yours promises energy and waste savings, the upfront investment appears steep to me and I’m struggling to justify it,” he stated, maintaining his poker face.

“Sir, our company supplied the previous machine to you ten years ago. Over the past decade, with lots of effort and money, our research and development teams have tirelessly worked to innovate, resulting in this latest model. We are one of the few suppliers offering this technology. Without your support, sir, it would be challenging for us to continue developing and serving you,” I replied respectfully, thinking I had played my trump card effectively.

A faint smile appeared on his face. “Allow me to present an alternative perspective. While we may be one of the few buyers of your machinery, if your pricing remains exorbitant, you may struggle to find buyers,” he responded calmly, but his words hit me like a bombshell.

Closing the deal:
At this point, both sides likely had a clearer understanding of each other’s positions, and a potential solution seemed within reach. I decided to offer my best price, with a minimal profit margin, which was 5% lower than my initial offer.

He remained silent for a moment, his expression betraying no willingness to concede. “Alright, let’s finalize the deal. An extra 3% to your offer, and we’ll proceed,” he finally said. I was taken aback. ‘Another 3% discount? This could significantly impact our company,’ I thought.

Seeing my perplexed expression, he smiled once more and explained, “I’m not asking for a further discount. Add 3% to your offer, and let’s close the deal.”

I couldn’t believe it. ‘Who increases their offer during negotiations? This is unheard of!’ I marveled silently. But it had happened for real!

“It’s a win-win negotiation. My objective isn’t a zero-sum game where one side triumphs at the other’s expense. Initially, I sought to gauge your sincerity, and with this additional 3%, both parties benefit, fostering a stronger relationship for the future,” he elucidated.

I commended him for not only finalizing the deal but also imparting a valuable life lesson.

After such an experience, who wouldn’t prioritize providing exceptional service to him? He would always remain a priority customer for us. And with such genuine support from the customers, we, the manufacturers, can plow back our earnings to make highly efficient machines. It’ll be totally a win-win situation for the industry as a whole!

As my friend finished recounting his story, he awaited my reaction. I expressed my gratitude for the insightful lesson learnt.

 

(The author is the Managing Director of Texdoc Online Solution Pvt. Ltd.)

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