Two amazing things happened to my CPA practice this week. First, someone tried to negotiate my fees. Maybe it happens more commonly for you in your business, but it just never happens in mine. The strategy that we had to get in place quickly would save my new client over $50,000 … and the negotiation was for less than $500.
It got me thinking about the whole “art” of negotiation. When is it smart business practice to negotiate and when is it just the need to win at all costs and, more importantly, crush the opposition?
I’m sure you’ve had a bad meal in a restaurant before. How do you handle it when it happens? One tactic is to say nothing. Another is to politely explain what is wrong to your waitperson. And another tactic is to become indignant and berate your server. I’ve been with people who have done that and seen the look on the server’s face as they take the plate back to the kitchen. You couldn’t pay me enough to eat that meal that comes back to the table, all “fixed.” I saw the look on the server’s face. (A big apology to all hard-working servers who would never do anything wrong, no matter how bad the customer is.)
I wonder at clients who use demeaning tactics to run down the bill with their trusted advisors. If the other party walks away feeling bad about the negotiation, they WILL find some way to make it right. That’s the principle of cognitive dissonance. It occurs when you have to hold two conflicting thoughts. In this case, for the service provider, the value you have established in your mind for your services and, on the other hand, the amount you settled for because someone wore you down in a negotiation.
Now, step back into the consumer’s shoes. Just like that plate of food, how much do you value the service you’re going to get from an advisor who is conflicted about the deal?
I’m going to make a radical statement. Negotiation has its place in business, but never in personal relationships. And, in my opinion, negotiation tactics that teach you how to win by running down another person are not ethical. In fact, on a scale of 1:10, where 1 is the lowest. I’d put “negotiation in the I win, you lose methodology” at 2 at best. I’d put compromise, where neither one is completely happy (or completely unhappy) at about 5.
But, I’d put collaboration – the creation of something brand new that gives you what you want and need and what the other party wants and needs in such a grand scale that something magic happens – at 100. In other words, when you use the power of “and” and create something that gives you what you want AND what gives the other party what they want, you will create something bigger than either of you expected.
There is one thing about negotiation that I think is important. You shouldn’t ever not ask for a deal because you’re afraid to. In fact, if it makes you nervous to ask for a deal, then practice it often until it’s natural to do so. Your choice to move to collaboration is because you care about the outcome, not because you’re afraid to ask for what you want.
I have a great suggestion on how you can stretch that muscle. Learn from the masters at it! Join me in Juarez, MX on one of our charity trips to orphanages. I promise to personally take you to a downtown market where you can practice negotiation with the masters of it! Nobody’s feelings will get hurt. It’s an expected part of the culture. If you’re serious about going on a trip, drop me an email at DK@TaxLoopholes.com. You can do good, impact a child’s life … and touch your life forever. And, hey, you get to practice negotiation while you’re at it! That’s what I call collaboration!
Oh, I almost forgot, the second amazing thing that happened in my CPA practice was that my husband Richard (who handles the inbound new potential clients) had 50 new requests to work with our DKAffiliated CPAs or personally with me on Friday. That’s 50 in one day!