Every small-business owner deals with a wide variety of people – your staff, your customers, your suppliers. Some of them will be a pleasure to deal with and some of them will be more difficult. Perhaps it’s a demanding, aggressive customer, an employee who just won’t follow your instructions, or a supplier who is making your life more unpleasant than it needs to be.
While it can be easy to blame the other person for their behaviour, the reality is that – even if that is true – we have no control over how they behave. More often than not, the poor behaviour of others is not because they are bad people, but because their needs are not being met and they don’t have well-developed skills to handle the situation. The good news – there are steps that you can take to manage this and help the two of you move forward to a better, more productive discussion.
“You want to aim to make sure the other party feels respected without discounting your own status.”
The first step is to recognise that our emotional needs are just as important as our more tangible needs in any discussion. So, while we may be negotiating with a customer about the service we can provide to solve their business problems, we can also take care of their emotional and psychological needs. How do they want to feel? What do they want people to think about them?
There are five core psychological needs that are common to everyone. Once we understand them, we can use them in a number of ways:
- to understand why the person may be acting the way they are,
- to drive emotions that may build co-operation,
- to respond to strong negative emotions.
So, let’s look at what these five needs are and how to use them.
Appreciation
Humans are programmed to want to feel heard and understood and valued by the people with whom they interact. People are more likely to co-operate when there is a feeling of mutual appreciation. We can improve our negotiations by making sure our counterpart feels heard and understood by us.
You need to consider what you can say to make them feel valued and understood. Think about how things may appear from their perspective. You can then appreciate their reasoning without necessarily agreeing with them.
Imagine you own a coffee shop and you have just put your prices up from $5.00 to $5.50 a cup. A regular comes in and says, “This is ridiculous, you’ve just upped your prices 10 per cent. I know that coffee has a huge margin and it’s crazy that you are charging us way more than twice what it costs you.” To demonstrate appreciation, you may respond with, “I understand you think the price is too high, and I appreciate your belief that our margin should be less than 50 per cent.”
Autonomy
People want to feel the freedom to make decisions without somebody else imposing a decision on them. In your negotiations, you need to be able to give a sense of choice to the other party, even where the choices are limited.
One way to achieve this sense of autonomy is to give people choices – ideally those that are equal in your eyes. For example, a plumber has a client who is unhappy that the plumber is not fitting in their work fast enough. Rather than just telling the client that they will do the job in three weeks, the plumber may say, “I can start the work in three weeks and guarantee it will be finished in two days. If you prefer, I could start the work in three days and work on it in downtime between other jobs. The job will probably be finished within three weeks but I can’t guarantee it. Also, we will probably have at least five visits to get the work done.”
The second choice sounds unappealing to the client but now they are choosing the three-week delay rather than having it forced upon them.
Giving the other side autonomy doesn’t always have to be on the big-ticket items in the negotiation. It can be around choices of how the negotiation will run rather than the outcome of the negotiation itself. For example, “I’d like to meet at 10.30am tomorrow. Would that work for you?”
Affiliation
People are looking for emotional connection. Negotiation will run more smoothly when there is a sense of connection between the parties. You need to shift the energy so it’s not ‘me versus you’ but rather ‘the two of us sitting side-by-side’. Building a sense of connection is helpful. Finding a commonality between you and the other person can help bring that sense of connection to life. A little bit of LinkedIn research can go a long way here. For example, “I see you worked in Hong Kong for a while. I was there for three years, too. How did you find it?”
Status
Status is all about how we see our standing in comparison to others. There is a sense in every negotiation of who is important and who may be seen as less important. No one likes to be disrespected. Demonstrating a sense of respect for your negotiating counterpart is helpful. You want to aim to make sure the other party feels respected without discounting your own status.
Imagine you are an interior designer who is working with a couple to fit out their new family home. The homeowners have regularly challenged your ideas. You feel that they are not respecting your expertise. To address this, you may say, “This is really going to be a collaborative process. You are obviously the expert in your family’s needs, so teaming that with my design expertise will allow us to create the best home possible for you.”
Role
Everyone wants a fulfilling and meaningful role in any negotiation. Too often, the parties’ roles are adversarial. It is a case of you win, I lose. To increase the satisfaction of both parties in a negotiation, we need to invite the other party into a more constructive kind of role by saying, for example, “Let’s sit down and just try and solve these differences together.”
How to use these ideas in practice
The most important step in developing your ability to use the five keys to negotiation is to be able to recognise them in conversation. After a difficult interaction, reflect on the conversation to explore why the person may have been behaving the way they were. Do their comments suggest that they feel underappreciated? Have they been put in a position where they feel they have no choices? What could you have done to improve the situation?
Once you can start to recognise these, you will be better placed to respond to them. Rather than thinking about how you could have handled it better after the event, you will be able to play with ideas in the moment.
Building these skills is not going to happen overnight but with ongoing reflection and thought, responding productively to these psychological challenges will become more of a natural reaction.
Fundamentally, every negotiation is an exercise in people skills.
This article first appeared in issue 43 of the Inside Small Business quarterly magazine
