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Identify your preferred negotiation style
by Michael Cooney
Almost without exception, organisations are experiencing massive pressures to reduce costs.
Staff who are involved in any type of selling or purchasing, no matter how small the value, can make a real difference if they seize the opportunities presented to them.
Knowing an individual's preferred negotiation style can help in the development of better negotiating skills - adding another skill to the toolkit needed for managing in a recession. Better negotiation skills can deliver significantly better margins on sales and drive down your procurement costs.
Here’s a quick self-assessment activity to give you insight into your current preferred negotiation styles.
To enable you to answer the questions it is based on the following scenario.
Negotiating Scenario
In this scenario, you are the operations manager of a large laboratory services company and one of your areas of responsibility is the yearly renewal of the out-sourced lab equipment maintenance contract. This is a major expenditure so cost is very important. The quality and reliability of the supply both for spares and the maintenance work are also critical.
By the time the new contract starts in six months time two new additional laboratory units will have been commissioned on your site. This will bring an increase of almost 40% in capacity and the annual spend on maintenance will also have to go up substantially.
You are meeting with the Area Manager of your current contractor as he is the person with whom you agree all contract arrangements and whom you know and like. He is aware that the service provided over the last year has not always been top quality; there have been delays in getting spares delivered and maintenance completed. An entire unit went down for 72 hours due to a mistake they made in maintenance routine.
You could put the whole contract out to tender again, but that will be very time consuming and you don’t have room for that in your schedule. You have decided that you should get some reduction in costs in view of the increase in contract size; and while you know that since the beginning of this year inflation has been over 3%, you have seen published data that shows that the regional average contract for this type of maintenance contract was 4% below last year. From your calculations you believe that £680,000 for the year’s contract will be reasonable
As you start the discussion with the contractor, he acknowledges the increase in business and says that his company is prepared to operate the contract for £675,000.
What is your response?
This questionnaire provides you with 15 pairs of responses.
For each pair click on the and symbols to adjust the position of the dark blue block to reflect your preferred balance between the two options
Answer all questions and then press the submit button at the bottom to get an evaluation of your answers.
1: Choose your preferred balance between the two options
Use market price statistics showing that there has been an overall reduction in average contract values of 4% in the last year and ask for a lower price. | Accept the offer. |
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2: Choose your preferred balance between the two options
Suggest use of your marketing department to do a major case study on the contract for release to all the major trade magazines and on the Web to promote the suppliers business in exchange for a lower contract price. | Point out that under the existing agreement you do have the right to put this contract out to tender again at this time. |
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3: Choose your preferred balance between the two options
Accept the offer. | Remind the contractor of the terrible problems that were caused when an entire unit went down for 72 hours due to a mistake they made in a maintenance routine and that you feel that you have not had adequate recompense for that. |
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4: Choose your preferred balance between the two options
Explain that you were expecting a bigger discount in view of the increase in contract value but that you will accept 2.5% off the price quoted. | Use market price statistics showing that there has been an overall reduction in average contract values of 4% over the last 6 months. |
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5: Choose your preferred balance between the two options
Point out that under the existing agreement you do have the right to put this contract out to tender again at this time. | Accept the offer. |
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6: Choose your preferred balance between the two options
Suggest use of your marketing department to do a major case study on the contract for release to all the major trade magazines and on the Web in exchange for a lower contract price. | Remind the contractor of the terrible problems that were caused when an entire unit went down for 72 hours due to a mistake they made in a maintenance routine and that you feel that you have not had adequate recompense for that. |
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7: Choose your preferred balance between the two options
Remind the contractor of the terrible problems that were caused when an entire unit went down for 72 hours due to a mistake they made in a maintenance routine and that you feel that you have not had adequate recompense for that. | Explain that you were expecting a bigger discount in view of the increase in contract value but that you will accept 2.5% off the price quoted. |
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8: Choose your preferred balance between the two options
Explain that you were expecting a bigger discount in view of the increase in contract value but that you will accept 2.5% off the price quoted. | Point out that under the existing agreement you do have the right to put this contract out to tender again at this time. |
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9: Choose your preferred balance between the two options
Accept the offer. | Explain that you were expecting a bigger discount in view of the increase in contract value but that you will accept 2.5% off the price quoted. |
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10: Choose your preferred balance between the two options
Use market price statistics showing that there has been an overall reduction in average contract values of 4% in the last year and ask for a lower price. | Suggest use of your marketing department to do a major case study on the contract for release to all the major trade magazines and on the Web in exchange for a lower contract price. |
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11: Choose your preferred balance between the two options
Remind the contractor of the terrible problems that were caused when an entire unit went down for 72 hours due to a mistake they made in a maintenance routine and that you feel that you have not had adequate recompense for that. | Point out that under the existing agreement you do have the right to put this contract out to tender again at this time. |
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12: Choose your preferred balance between the two options
Suggest use of your marketing department to do a major case study on the contract for release to all the major trade magazines and on the Web in exchange for a lower contract price. | Accept the offer. |
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13: Choose your preferred balance between the two options
Use market price statistics showing that there has been an overall reduction in average contract values of 4% in the last year and ask for a lower price. | Point out that under the existing agreement you do have the right to put this contract out to tender again at this time. |
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14: Choose your preferred balance between the two options
Remind the contractor of the terrible problems that were caused when an entire unit went down for 72 hours due to a mistake they made in a maintenance routine and that you feel that you have not had adequate recompense for that. | Use market price statistics showing that there has been an overall reduction in average contract values of 4% in the last year and ask for a lower price. |
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15: Choose your preferred balance between the two options
Explain that you were expecting a bigger discount in view of the increase in contract value but that you will accept 2.5% off the price quoted. | Suggest use of your marketing department to do a major case study on the contract for release to all the major trade magazines and on the Web in exchange for a lower contract price. |
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......so, how did you do?