The Four Magic Words Of Negotiation

Business school negotiations classes are often promoted with this promise: you can pay for your whole education with one negotiation. If that’s true – and it certainly can be – then the next five minutes of reading this article might provide the best return on investment of any time you’ll spend this year.

Do I have your attention?

Then without further ado, we present the Four Magic Words of Negotiation: “We don’t need it.”

Your success in getting the most value and best prices will depend almost entirely on the degree to which your team believes that you DON’T need what you are buying. The converse is true: the more you are persuaded that you DO need a specific service or product, the more you will overpay and the less value you will capture.

 

Is it really that simple?

There is far more to the process and tactics of applied negotiations. It’s worth studying because the payoff is so high and because everyone can improve (congratulations – you are on your way by reading this!).

Most negotiation training covers these key areas:

  1. Knowing your Benefits – where you derive value
  2. Understanding the seller’s economics
  3. Alternative scenarios and creative outcomes
  4. Communication tactics

There’s a world of depth on any of those and different approaches, but virtually all schools of thought will grant that the POWER behind negotiation comes from the BATNA – the Best Alternative to a Negotiated Agreement. The better your BATNA, the more power you have. Having great alternatives means you can negotiate from strength; you can credibly convey “we don’t need it.”

 

If you NEED to buy it then you’re not bargaining. You’re begging.

Any leverage when you’re buying comes from your ability to walk away from the table – in a huff, preferably – and not come back. Hence the classic and refreshingly realistic advice on shopping for a house: “Don’t fall in love with one, fall in love with three.”

The concept is simple… the application can be tricky. What does your company truly need? There are certain things required to fulfill your mission and bring your products to the market, but almost no individual transaction rises to the level of a true NEED. If it does… be prepared to pay for it.

 

A Word About Want
This doesn’t mean you have to greet every sales rep with cool detachment and feigned self-sufficiency, as if no one can offer anything to help you. There’s nothing wrong with wanting, and expressing enthusiasm the right way can be helpful when you’re buying. What is the right way versus the wrong way? You can usually feel it when want tips to need:

When you WANT IT à it reflects ENTHUSIASM à which is WINNING à and attracts PARTNERS

When you NEED IT à it reflects DESPERATION à which is PITIFUL à and attracts CHARITY (or SHARKS)

 

But what if we DO need it?
It’s easy to get trapped in false constraints and perceived needs that are simply outsized preferences. Before you give your team permission to NEED anything, rule out the possibility that it’s just a nice-to-have.

Whiteboard-Need-v-Nice-to-Have

 

If you have to Fake it… Don’t.
If you are headed into a purchase or negotiation and you cannot define your position of strength – i.e., you or others on your team are still convinced you NEED to buy it – my advice is to cancel the meeting. Sleep on it, get some outside input, take a mulligan, try coming at it from a different angle on a different day.

Reject the idea that you need to buy it. Even situations that seem to be iron-clad (monopoly suppliers, exclusive agreements, governments, family relationships) often have wiggle room and creative solutions (though you may need to invest in some legal help to find them).

Trying to fake strength or bluff is dangerous, especially with multiple people on the team. A skilled seller on the other side of the table can ask the right question and read the answer in your faces, no matter what your words say.

 

It’s Your Money. It’s Your Choice.
There are numerous industries devoted to convincing you that you need what you really don’t, and they won’t let up. (Think of the tractor beam on the Death Star). Escaping that that pull requires commitment and effort (and maybe the Force, or at least a contrarian mindset).

Once you can say “we don’t need it,” you will certainly save money. You’ll probably also find options you didn’t know you had.

 

Here are some other excellent articles on our site that will help you with negotiating with vendors:

A Negotiator’s Checklist: What You Must Get In Writing Before You Buy

Mastering Confidence And Humility In Business Can Save Money

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