The art of selling is about making things happen; gaining agreement to move ahead with a deal or a commitment. Negotiation – even if it is subtle – is an inherent part of most sales environments.
Earlier this month the 11th annual ‘Olympics’ for hagglebots was held. This is a competition for artificial intelligence software (AI) that has been developed and trained to negotiate.
It is serious business. More than 100 participants from Japan, France, Israel, Turkey and the United States took part.
Negotiating software has it’s genesis in the 1980’s and has now reached the point where, in “very artificial domains” it is “behaving closer to human form, sometimes better”. Read more about the Automated Negotiating Agent Competition on BBC News.
Is AI going to be part of your sales process?
The AI tools (combined with machine learning) are designed to help negotiators prepare both offers and strategies, with the aim of arriving at a good deal that satisfies both parties.
Clearly large companies have the most to gain from better managing the sometimes thousands of contracts they have with suppliers. But like many tools, especially technology, what starts with corporates often cascades down into the small-and-medium (SME) business sector too.
Negotiating technology may develop to augment, or assist, person-to-person sales conversations (and negotiations) or the technology may be used to replace the toing-and-froing that is often required to identify each parties preferences, priorities and BATNA (best alternative to no agreement, the walk away point).
Effective negotiation skills
Whether you use technology, or rely entirely on person-to-person communications, the process of negotiating is based on a voluntary attempt to resolve conflicts that arise from competing needs, interests and goals. It is a problem solving approach in which parties seek agreement rather than resort to force, coercion or violence.
Rather than negotiate based on power, status, or what you believe are your ‘rights’, for business negotiations the most effective strategy is often an ‘interest-based’ negotiation. This approach to negotiating seeks to reconcile the needs, desires and concerns of the parties involved.
‘Interests’ are the basic needs, concerns, fears or values which underlie their position in a conflict. For example in a labour dispute between employees and the employer, the interests are what lead them to make a certain demand; however, their interests may only be partially met by money. There may also be interests related to fewer working hours, better benefits or gaining a greater measure of respect from management.
The 3 types of interests
There are three types of interests, as follows. All three should be subject to evaluation in a negotiation situation to reach the most stable agreement.
- Substantive interests: which relate to physical resources such as money, land or time.
- Psychological interests: which relate to issues of trust, fairness and respect.
- Procedural interests: which relate to the way the dispute will be resolved, who will be involved and how decisions will be made.
Interest-based negotiation is designed for parties who have a need to create or maintain healthy relationships. In this type of process, parties discuss the issues that face them and express the interests, values and needs that they bring to the table.
Collaboration not competition
Instead of focusing on competitive measures and winning the negotiation, parties collaborate by looking to create solutions that maximise the meeting of all parties’ interests, values and needs. This cooperative process focuses parties away from their positions and onto using interests and objective criteria for making decisions.
Parties use interest-based negotiation when…
- Both parties have interdependent interests, desires and concerns.
- It is possible to create integrative solutions which provide mutual gain for parties (win/win).
- An ongoing relationship between parties is important.
- Parties need to switch from adversarial interactions to more cooperative ones.
- There are principles (e.g. human rights standards) which parties are bound to uphold.
Need more help or training for your team?
If you believe your sales or business development team would benefit from a greater understanding of the negotiation process, and improving their sales skills, please get in touch for a confidential consultation.