Strategic Planning for the Flat Screen TV Negotiation

As Jeffrey Gordon over at the Software Licensing Handbook cogently explains in his post on Strategic Thinking, “when faced with a negotiation [it is important to] sit down and ponder your moves.”

If you come out guns blazing, the other side is probably going to respond in kind. Which means that you’re setting the stage for an aggressive negotiation and will be fighting for things along the way. On the other hand, too soft, and you’ll give up everything. This is where some of the experts obviously advise differently. One camp says “play stupid” and seek what you can get through self-depreciating behavior. Another camp (pardon the pun, but it’s actually Jim Camp) says that you should always “Start with No” as a way to encourage discussion.

The net result of Strategic Thinking is an ability to not only see what your path could be, but to also see where your opponent is going to move. For if you play a win-win strategy against someone with a win-lose strategy, who do you think is most likely going to lose? If you’ve considered your various options and thought Strategically, you’ll know how to respond.

Strategic Planning:  Negotiation “Style”

Though Gordon talks about planning ones negotiating style (“hard” or “soft”) I always lead with a style that is “hard on the terms and soft on the people.”  As a matter of negotiation “style” I also

• name my concessions and demand reciprocity
• cooperate until I encounter non-cooperation, at which point I retaliate but forgive quickly when cooperation results
• take principled negotiation positions, i.e., always give a reason for my bargaining position and always demand the same from my negotiation partner
• make the first offer, having in mind making 3 to 5 concessions to reach my “bottom line” or “reservation price.”

I also recognize and attempt to guard against my weaknesses which are:

• impatience; and,
• discomfort when the negotiation appears to be but rarely has actually has reached impasse

Strategic Planning:  Setting Ones Reservation Price; Planning  the Number and Timing of Concessions; and Deciding Which Information Will Be Strategically Deployed

My own pre-game strategic planning primarily consists of setting my “reservation price” (the number I will not go below); projecting the planned timing and number of concessions; and, deciding on the nature and timing of information disclosures that I believe will enhance my bargaining position.  I also make a decision, in a case like this, whether I wish to aggregate or divide the several items subject of the bargain.

So What Was the Actual Plan?

We were lucky to have both several items to negotiate and several preferences for each negotiated item.  What were they?

1. the television itself;
2. the $100 HD cable;
3. the furniture on which to place the television; and,
4. sales tax, which for reasons I’m not entirely clear about, sales people generally are happy to “cut” as part of any retail purchase.

We decided that I would be the primary negotiator with Mr. Thrifty as my back up.

I knew there was a lot of “fat” in the furniture.  The purported “retail” price for the “wood veneer” television stand was $598, “reduced” to a “sales” price of $398.  Having checked online prices for this piece if furniture, I knew that at least one online store claimed that its “retail price” was $349 —  $50 more than the Ken Crane’s claimed “sale” price and that we could purchase it online for $285, $110 less than the store was offering.

Though we were unable to obtain comparables for the Toshiba — tagged at $2598 — we knew we could buy a comparable Samsung for $2300 over at Fry’s Electronics in Burbank.

Mr. Thrifty and I decided that our reservation price (or bottom line) was $3,000.00 for all of the items listed above, which would be $366 less than “retail.”

Although I firmly believe we could have negotiated a deal at that price, we concluded the deal $150 short of our “reservation price.”  I’ll explain why that happened when we cover time management and perception of power in our final post on negotiating consumer purchases.

                       

Victoria Pynchon

Attorney-mediator Victoria Pynchon is a panelist with ADR Services, Inc. Ms. Pynchon was awarded her LL.M Degree in Dispute Resolution from the Straus Institute in May of 2006, after 25 years of complex commercial litigation practice, with sub-specialties in intellectual property, securities fraud, antitrust, insurance coverage, consumer class actions and all… MORE >