The concept of trading for something of equal or greater value avoids value-detracting concessions and expands the opportunity for all. Learning this was a good first step in helping the Key Account Managers (KAM) at Nalco prevent value loss. They practiced expanding the financial pie of a negotitation by adding in as many value-creating elements as possible. A more in-depth analysis taught them how to prioritize and articulate the risks (terms and conditions) and investments (prices) for both sides.  

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In the business negotiation field, acute, surface-level pain is often expressed as "our margins are down" or "our salespeople are giving in on price too quickly." Yet these are merely symptoms of a problem that doesn't contain enough information to stage an intervention.  There are many root causes of negotiation problems creating these symptoms and driving this pain - some selling-related, some cross-functional - such as:

If American corporations spend $7.2 billion* every year on sales processes, account management skills, negotiation, and opportunity management training, why aren't these training initiatives being interwoven into the "DNA" of the organization? Interestingly enough, three factors are cited most frequently in our research for failure to implement training initiatives:

"Let me check and I will get back to you ... "  How many times have you heard this phrase in a negotiation?  Better yet… how many times have you actually said it?  This phrase can be deadly.

At the risk of oversimplifying the relationship between selling and negotiating, the former is about meeting the customer’s stated needs while the latter is about capturing the value in a deal that benefits both sides. In other words, they go hand-in-hand, or at least they should. For example, even if a salesperson does a great job selling, that is, creating value, without a sound negotiation strategy it’s unlikely that full value will be captured, and the salesperson will probably end up with a deal that rewards him or her with less value than the customer receives. Alternatively when a salesperson does a poor job selling, even if he or she is fortunate enough to have a negotiation, it will almost always default to a price only discussion.

Unfortunately, even among those organizations that provide salespeople with training in both sales and negotiations, more often than not sales training is offered in one fiscal year and negotiation training in the next, so they appear to be separate and seemingly unrelated activities. As a result, the training fails to address the interconnection between the two processes. In effect, training salespeople in this manner is the same as training a carpenter to use a hammer one year and a saw the next. The salesperson (or the carpenter) would essentially be out in the market for a year with only one half of his or her toolbox. And to make matters worse, the supplier who provides the sales process training is usually different from the supplier who provides the negotiation training. So the sales team now has two disconnected processes designed to fill out two different kinds of blank forms. This is not only difficult for salespeople to deal with given their daily challenges, it’s also difficult for coaches to coach to, or for management to embed into the customer relationship management process.

Sometimes your company's approach to or attitude about business negotiation actually works against you at the negotiating table.

A very common trap, one that surprisingly enough is even taught by some business negotiating books, is that we make only one offer.  What does this accomplish?  Since deals always involve making multiple buying influencers happy, one offer most likely focuses on addressing the needs of only one buyer but not all of them.  It communicates that you have assessed their situation and are now in the best position to tell them what they need most.  And it immediately sets up a competitive atmosphere:  if they disagree, they have what they need to shop around, whether for a better price or more features for the same price.

Sometimes a few of your products or services - when compared at the product feature/benefit level - might actually be commodities.  So what do you do then?  Fortunately, when you look at the total business relationship (not just a piece of it) between your firm and the customer, this commodity problem usually goes away.

Sometimes when you're solving a problem, your assumptions are flawed or out-of-date, so problem solving suffers.  If you assume business negotiation is unpredictable, you will be more likely to lose control and lose the deal when the unexpected happens because you approached the problem as unpredictable.