You may never have used the expression Consequences of No Agreement, but chances are that you've thought about them. After all, you know that something is going to happen if you don't make a deal. As the seller, your Consequences of No Agreement - your alternative to making a deal - is most likely going to be losing the sale. Your customer generally has three possible alternatives to reaching agreement with you. He or she can:
- go to a competitor
- build the solution himself or herself
- do nothing
It's only when negotiators obtain something that's at least marginally better than their alternative that they prefer agreement to impasse.
Understanding the Consequences of No Agreement, both for yourself and your customer, is easily the most important aspect of constructing a blueprint of a negotiation. The reason is that, in any negotiation, the other side always sees your offer as a gain or loss based on their perception of the consequences of not reaching agreement with you. Simply put, if the other side believes that making a deal with you will be to their benefit, they will do it. But if they believe that they'll be better off not making a deal with you, regardless of the alternatives, you're going to lose the sale.
Note that I said the other side makes a decision based on its perception of the consequences. The truth is that in any given negotiation, more often than not, one or both sides haven't taken the time to analyze their true Consequences of No Agreement, or they have, but have misdiagnosed them. In either case, even if one or the other side is putting a great offer on the table, chances are the two sides won't reach agreement if the consequences are misdiagnosed or misunderstood. That's one of the reasons it's so important to answer this question first - "What are the consequences if we do not reach agreement?" - by accurately determining those consequences. Making that determination is the first step in blueprinting a negotiation. Then, diplomatically educate those on the other side about their true Consequences of No Agreement.