Top 8 Negotiation Tactics

What is Business Development?

Want to win a negotiation?

It comes down to 3 key ingredients...

Wikipedia states, “The aim of negotiating is to build a shared environment leading to long-term trust.”

Neuroscience shows that Trust consists of...

Trust = Purpose + Empathy + Truth

Negotiation Theory shows how they interplay for a win...

1. Empathy

2021 study published in the Journal of Marketing discovered that corporate profits are higher when the business developer advocates for the prospect during contract negotiations.

2. Truth

“Trust but verify.” Use objective criteria like industry standards, market value, and replacement costs as evidence-based metrics.

3. Purpose

Dr. John Nash’s "Nash Equilibrium" famously explained in "A Beautiful Mind" movie scene states the best decision occurs when each party pursues a common purpose.

Business Developers should ensure prospects clearly understand the common purpose for all parties by using the Value Triangle.

Each side of the Value Triangle represents a constraint...

• Resources: Labor and material costs to make and deliver the product.

• Scope: The quality and quantity of products to be provided.

• Schedule: Schedule is the timeline of major milestones

Value fills the inside of the triangle.

• Value is the amount of Purpose, Empathy, and Truth delivered.

The price of your product represents the entire value triangle...

Price = Costs + Profit

• Costs cover the extrinsic value of the 3 sides of the value triangle

• Profit covers the intrinsic value of Trust inside the value triangle

The constraints of Resource, Scope, and Schedule are interdependent. The three constraints must be balanced to avoid the risk of project failure.

For example, if your buyer adds more requirements (Scope), you must increase the amount of time (Schedule) and/or Resource costs.

If constraints are unbalanced, the contract terms must be negotiated to return the constraints to equilibrium. Failure to achieve Value Triangle equilibrium injects risk into the contract.

Both parties must negotiate to remove risk from the contract to avoid failure.

See slides for top negotiation tactics.

It's important to note some tactics may be used to manipulate cognitive bias or emotions. In some cases, these tactics are untruthful.

A business developer must avoid using tactics that dilute or destroy the fundamental foundation of BD success...

Trust.

Tony Gray, BDP
Author of the Business Development Body of Knowledge

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