Q & A Table of Contents
He Agreed, And Then Walked Away From The Deal
From: Marcelo, São Paulo, Brazil
Question: This week I made a mistake while I was negotiating. I had to bargain a price with a teacher in a private class. I got 50% off, the standard fee. He did not seem to be uncomfortable with the situation, so I thought that every thing was ok.
I had a commitment to have class with him the day after and he did not show up. I called him and he told me that another guy had asked him for the same time but offered a better price. He told me: "It is the law of offer and supply".
How can I know when reach a price that makes me and the other party comfortable, in order not to be betrayed again?
Response: A successful negotiation is a process that leads to an agreement the parties will willingly fulfill. If your price negotiation with the teacher was imbalanced, with you pursuing the agreement with enthusiasm and he moving towards agreement reluctantly, the negotiation was not going to succeed.
Someone has said that a perfect compromise is achieved when all the parties leave the bargaining table equally happy -- or equally grumpy. It may well be that during your negotiation with the teacher you were not paying sufficient attention to his communication -- not only his words, but also his gestures and body language. His mouth may have said 'Yes', but his body may have been saying 'No'.
Finding a way to reach an agreement about price very often requires bringing more factors than price alone into the negotiation. When you tell a professional who is paid for his or her time that the price they want to charge is too much in your eyes, while you may not be intending to do so, you are attacking their ego. If a teacher says "My time is worth $50 per hour," and you say (in effect) "It is only worth $25 to me," that can be viewed as an attack on his ego.
Before you negotiate, consider all the interests of the parties and other stakeholders. Sometimes money seems to be the only issue -- but more often than not, money's value is based on how it will serve a given party's interests: ego, the capacity to pay existing bills, or an opportunity to buy something special. It appears you work for a bank. Are you in a position to offer a teacher advice on how to obtain the best services, a favorable loan, or some other benefit with which your expertise can helpful.
As you go through the negotiation process, it is critical to keep asking questions. Ask other parties questions that will help you understand their feelings about the issues. Ask yourself whether you are doing a good job of meeting your own interests -- as well as whether you would be happy if you were on the other side of the bargaining table. Unless each party to a negotiation feels the process is fair, there will be no real commitment.
Once you reach an agreement, it is important to have some kind of documentation so that each party knows his/her obligations to the other parties -- as well as the rewards he or she can gain from fulfilling the deal. You may not need a formal contract, but if you have an appointment with a teacher, you can ask him/her to write down the date, time, and payment due so that you have a reminder to put in your calendar. And you can respond with a simple note indicating your intention to be at the lesson on time, prepared to learn, and with payment at the appropriate time or in the appropriate form (check, cash, etc.).
Negotiation is not a competitive sport. Forcing a teacher to cut his price by 50% may feel like you have won; but it may not motivate the teacher to keep the deal if he can get a better price from someone else. There should be incentives for each side to keep their part of the bargain. Otherwise there's really no deal.
Good luck,
Steve
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