“He who has learned to disagree without being disagreeable has discovered the most valuable secret of negotiation.” 

Chris Voss, Never Split the Difference

As I sat in front of my screen speaking to a potential client, I felt confident in my understanding of their evolving needs. I thought I had done my homework but did not fully grasp his evolving personal challenges. With each passing minute, my confidence waned, culminating in a moment of discomfort that left me wondering why I had initiated the discussion in the first place. I thought I understood his pressures.  But things had changed, and I was sitting there like the emperor wearing no clothes.   Sometimes we assume too much, or we can’t see what’s under the iceberg.  I committed both these errors.

Even with an abundance of negotiation training options available today, there is a huge gap between perceived and actual negotiation prowess:

  1. LACK OF CONFIDENCE: According to a study by Huthwaite International, only 18% of B2B salespeople consider themselves “very effective” negotiators. This research reveals a large disparity between perception and reality, indicating that most leaders overestimate their own skills.
  2. LACK OF PRACTICE: A survey conducted by CSO Insights found that 46% of B2B organizations provide limited or no negotiation training to their sales teams. And the companies that do offer training fail to deliberately practice their new skills, birthing a group of novice negotiators who often weaponize these techniques.
  3. LACK OF SUCCESS: Research by Harvard Business Review indicates that ineffective negotiation skills can have a substantial impact on deal outcomes. In fact, a study revealed that 70-90% of B2B deals are not lost to product or price, but rather to poor negotiation discussions. Mastering intense communication is vital to your success.

These findings collectively highlight the sobering reality that many sales teams are not as adept in negotiations as they may think. Both parties (sellers and buyers) are way too transactional.

In the dynamic world of retail, negotiations have always been a high-stakes game. However, in today’s shifting landscape, with retailers facing unprecedented structural and competitive challenges, practicing holistic negotiation skills is essential.

Why Are Negotiations More Challenging Today?

Retailers are confronting a perfect storm of economic pressures and industry shifts. Margin pressures are at their highest in over three decades, facing the daunting task of maintaining profitability amidst soaring prices and dwindling unit sales. A staggering 75% of global growth is attributed to price increases, exacerbating the strain on retailers’ bottom lines.

Consumer financial woes add another layer of complexity. With 4-in-10 consumers having less than $500 available for emergencies, retailers must build consumer relationships where every dollar spent counts. Moreover, traditional retail is undergoing a seismic structural shift, leaving many conventional models ill-prepared to adapt.

The dominance of Amazon further intensifies the challenge. With annual sales skyrocketing to $576 billion, retailers find themselves under increasing pressure to innovate and find new revenue streams. Retail media, selling data, and leveraging shelf space have become survival tactics in the battle for relevance.

Amidst these challenges, the need for skilled negotiators has never been more acute. As tennis legend Billie Jean King aptly put it, “Pressure is a privilege.” Embracing fierce conversations and mastering holistic negotiation skills are not just advantageous but essential for survival in a hyper-competitive world. Do you have these five tools in your toolkit?

THE TOOLKIT

  1. HIDDEN INTERESTS: Don’t fall into the trap of tunnel vision. Thoroughly understand the ever-evolving hidden needs, motivations, interests, threats, and constraints of your partner. What’s not being said?  This lays the foundation for crafting mutually beneficial agreements.
  2. STAYING PRESENT: Anger, frustrations, and insecurities can cloud one’s judgment and derail negotiations. Stay composed and recognize the impact of your own triggers, and emotions on decision-making. Poise fuels healthier engagements.
  3. DEEP EMPATHY: When we protect relational trust, and rapport (at all costs) we pave the way for smoother negotiations and long-term commitments. We don’t need to always agree, but we better understand, and empathize with each other.
  4. ONGOING DIAGNOSIS: Never assume previous facts and conditions are still relevant today. Always conduct diligent research and question old assumptions. Like a surgeon, diagnose the patient before prescribing a solution, minimizing the risk of relationship malpractice.
  5. THIRD OPTION THINKING: Open yourself up to creative, alternative approaches. Rigidity limits options, while flexibility and scenario planning expand the scope for mutually beneficial outcomes. Instead of always looking to compromise, uncover a new third option.

In the tumultuous world of retail, partnerships are under duress. But when we remain open, we can still find common ground.  By embracing human nature, we can strengthen healthy partnerships.  Business is still “human”, and the best communicate transparently and with an open mind.

“So don’t beat them with logic. Ask them questions that open paths to your goals. It’s not about you.  The beauty of empathy is that it doesn’t demand that you agree with the other person’s ideas.

Chris Voss, Never Split the Difference