Every day of our life, as we move around, and interact with people, we conduct one form of negotiation or the other. Negotiation is such an integral part of our life that we have even failed to realize we are engaged in it on a continuum – while boarding a bus, while buying at the market, while speaking with our children, and while talking with our boss. Indeed, we negotiate every day long. But how can we master this art better? How can we become more artful? How can we ensure we get the maximum benefit from a deal? These and many more related questions are worth pondering on if we all agree that negotiation is an everyday art for us.
When negotiating a condition, the major mistake we make is over-fixation on ourselves, what can I get from this situation? How can I get 100% of my request? How can I get this deal for the least possible price? We ask these questions continually and it is the bane of bad deals.
What our focus should be on is a win-win situation. To get a win-win deal, we cannot afford not to have an answer for the unselfish painstaking question that all counterparties always ask: What’s In It For Me?
What’s In It For Me (WIIFM)?
If you are entering a negotiation arena without having the answer to this question, you have most likely lost your strength even before the beginning of the negotiation. For every deal, there must be something for all parties, and if something you highlighted is valuable enough to the counterparty, then you know what area of ‘weakness’ to harness for your benefit.
WIIFM works in two powerful ways while negotiating
- If you are proposing/leading a deal, knowing what’s in it for the counterparty will help you in weighing your options if you are willing to offer the value or it will be a bad deal if you offer such value.
- For example, Dave is willing to buy a plot of land from Jenny for N200k, a land which will ordinarily go for N120K. It behoves Jenny to answer the question, what’s in it for me Dave? Is he seeing something about the land that I can’t see yet? Is there a treasure hidden on the land? Are Dave’s ancestors buried on the land and Dave will pay any amount to make sure he gets the land? These and many more questions will help you to know what’s in it for me Dave and why he is ready to accept your offer. It can then inform your decision about closing the deal (if the piece of land is precious enough to Dave as to pay any amount) or cut the deal (if valuable treasures are hidden on the piece of land that is worth more than any amount Dave can pay).
- If the other party is proposing the deal, it will be nice if you know what’s in it not just for yourself, but for the other party as well. While the other party might be proposing a juicy offer, you should understand that ‘it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.’ This realization should push you to know what’s in it for such party beyond what’s written in black and white.
- For example, Jenny is proposing to employ Dave for wages of N200k. If Dave considers this offer either too good to be true or too low to accept, then it behoves Dave to find the answer to the question, what’s in it for Jenny? What is the work culture like? Will Jenny take all my time and I won’t have time for other parts of my life? Does Jenny have a history of offering so much and defaulting? Does Jenny think lowly of my value to have offered such low wages? Answering these and many more questions will help you to understand why Jenny is offering so much or so little and in effect inform your decision.
You see the question WIIFM is a universal one, and it can remove a lot of hurdles and make negotiation position clear, if you are diligent and painstaking enough to find the answer(s) to the question.
Introducing BATNA – A Powerful Negotiation Tool
Whenever I talk about negotiation, another powerful tool I always like to mention is BATNA – Best Alternative To A Negotiated Agreement. While WIIFM will help you to remain critical about your negotiation, BATNA will help you know when it’s time to walk away, when it’s time to raise the bar, and more. Importantly, BATNA helps you to set a ‘price’ floor for your deal.
How does BATNA work?
When you are about to negotiate a deal, more often than not, you tend to have more than one option. Say you can do any of the following: sell your car or continue using it, or give it to your sister or donate it to charity, or more. You see options abound with corresponding benefits. Of all these, your BATNA will be the one you derive maximum value from (say giving it to charity) before going to negotiate the next one (say selling the car). When you set your price for sale, the minimum you will be ready to accept must be either equal to the benefit you will derive from the next best alternative or more than it, nothing less.
Understanding this will help you to know what price the buyer will mention that will make you say “I will rather give this to charity than sell it to you,” and there lies your power. If you don’t know your BATNA before going to a negotiation table, you might end up with a bad deal for your car.
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