Interest based negotiation sounds all slick and cool when you only have a couple interests to track.
But what about if you’re a normal person and you have, on average, about two dozen interests competing for your attention in any given moment?
How do you figure out which interests to pay attention to when you’re negotiating?
And how can you tell if you’re letting irrelevant interests get in the way of getting what you want out of a negotiation?
When approaching any new negotiation, the first thing you need to do is figure out your interests in the deal: why do you want what you want out of this negotiation? Does the deal help you pay bills, introduce you to a new client, allow you to work in an area you’ve been itching to try out?
Knowing what your interests are before staring the negotiation helps you figure out what’s important. If paying bills is important, money is going to be your main focus; if the opportunity to work with a particular client is what’s motivating you, you’re going to focus on the details of the working relationship.
Your interests in the negotiation are your Deal Interests: they are why you want what you want in this particular deal.
Funny thing is, though, when you negotiate you don’t turn off the rest of yourself. You might want a better page rate from this client than you got the last time, but you might also want to call the vet, listen to the new Zoe Keating album, and grab banh mi for lunch from the awesome food cart down the street.
These interests are just as real as your Deal Interests and they don’t voluntarily fade into the background just because you’re negotiating. Let’s call these interests your Life Interests, because, frankly, that’s what they are.
Because negotiation is a social endeavor, you also have another set of interests banging on the door for your attention: your Social Interests. Social interests are interests in how you want other people to interact with you.
For instance, I tend to tell jokes in awkward situations or talk too much when someone else is silent. I want people to be comfortable around me, and I react strongly to indications they aren’t comfortable. Your Social Interests can be informed by your personality, your culture, even the type of situation you’re in.
Just being able to name the different sorts of interests is a pretty big deal. Instead of being a general onslaught for slivers of your attention, you can now slowly put each demand in its proper pile: Deal, Life or Social.
As you’re negotiating, particularly if you’re getting frustrated, take breaks and ask yourself, “What do I want right now?” Then: listen.
If it’s a Life Interest that’s begging for your attention, you can determine if it makes more sense to put the negotiation on hold and address it (grabbing a bite to eat; calling your doctor to schedule that appointment) or set the interest aside and continue with the negotiation. If it’s interrupting your ability to focus on what you want out of the negotiation, it’s probably best to take a break and address it as best you can.
If it’s a Social Interest, you can ask yourself if fulfilling it is harmful or hurtful in the particular situation you’re in. If it’s hurtful, it might make sense to take some time and figure out how to fulfill it outside of the negotiation.
For instance, to help curb my talking-a-lot-when-things-get-quiet problem, on my desk I have a big sign I can tape to my monitor that says “Don’t Fill the Space.” When I’m on the phone with someone it reminds me to keep my trap shut if I’m just talking to fill up silence.
But the most important work you can do to help you figure out what’s going on in the moment is done long before the negotiation begins: it’s sitting down and identifying why you want what you want out of this particular deal.
Why is that homework important? Because it gives you something to go back to when you’re in the heat of battle.
You can compare what you really want in that moment to what you really wanted before the stuff hit the fan. If the interests don’t match up, you know that the thing in the heat of the battle is merely a distraction that’s robbing you of being able to get to what you really want.
And what’s easier to shake off: a distraction or something that feels like the Most Important Thing Ever?
So do your homework before you start negotiating and figure out what your interests are. It might feel like the world’s most boring activity, but it sure comes in handy when life gets in the way of your negotiation.
The Program on Negotiation at Harvard recently (a while ago) started a (somewhat) daily blog. It’s mostly edited versions of longer articles written by the professors that teach PON classes. The posts have enough to spark your thinking and get yourself chewing on how you’d tackle that particular issue.
Professor Subramanian is one of my favorites. He taught a good portion of the classes I’ve taken through PON and he’s good. This post is from a longer article he wrote on the complexities presented when negotiating through agents.
Agency negotiation (which is what I do) can be difficult because there is a lot of translation that needs to happen, and like everything else in life, it doesn’t always happen well.
And you know what? A LOT of negotiations in art involve agents in one way or another.
So, here’s what I want you to do:
1. Go read the article. (It will take you 10 minutes if you are very very very slow about it.)
2. Think about a negotiation situation where you would use an agent or where you would be negotiating with someone else’s agent.
3. What are things you could do before the negotiation to avoid the problems of miscommunication & agents acting too much in their own best interests?
4. No, seriously; what are they? Write them down in a free form brain storming.
5. Do the same thing regarding stuff you could do while those problems are happening; what could you do?
6. Look at the lists (or clouds, or spider webs, or poems; whatever) you’ve created. What do you NOT know? What do you wish you knew about dealing with those situations? Where does your brain get stuck?
7. Discuss below.
Have a great weekend, everyone!
I just wanted an excuse to post her picture on the blog.
Everyone write their goals out? Gooood.
Now why in the world did I ask you to do that? Well, because the type of negotiation that I believe to be most successful is negotiation where you are focusing on interests rather than positions. It’s called lots of different names but google “mutual gains negotiation” and you’ll get a good overview. Or pick up a copy of “Getting to Yes: Negotiating Agreements Without Giving In.” The authors were certainly not the first to write about negotiating based on interests, but they made the ideas that academics had been tossing around and testing out for 50 or 60 years accessible to kids like you and me. (Also, William Ury is kind of awesome; little bit of a nerd crush here in the corner.)
The basic premise is that we all lose when we try to split a situation “fairly.” You toss out a number, I toss out a number, we beat each other up a little, this makes us both frustrated, we say bad things about one another’s families and in the end we split things down the middle. Which, because of all the haggling, feels like winning first place in a Sarah Palin look-a-like contest.
And splitting things is not necessarily fair. Get that out of your head right now. “Fair” does not mean “I’m unhappy about something I had to give up.” That’s not fair. If I want half of what you have and you want half of what you have, then it’s fair, because we both get what we want. But otherwise, halfsies ain’t all that great.
So where do your goals come in? Well, your goals are your guiding principles. They are what you should go back to every time you enter a negotiation. You use them to determine what your interests are in the particular situation. You then use your interests to identify what is important to address in the negotiation and what you don’t care two bits about.* And once you know what you care about, you can invest your energy in a productive way, rather than a frustrating way.
Your interests in a negotiation should directly support your goals. If they don’t, ask yourself why you think those things are in your best interest. Because if they aren’t helping you get to what you want, what are they doing?
Also, do not be lame and tell me your goal is “to make gobs of money” and therefore “getting the highest price” is your interest. That is weak sauce. Also, it is cheating. Prices are positions, pure and simple. And who negotiates over positions? That’s right: Jerks.
I have found the easiest way to use my interests in negotiating is to actually write out my interests in the situation and then review that piece of paper before I meet with the other side, or have it near me when we’re on the phone. Sounds basic, but it works. Honest.
Don’t believe me? Wanna stump me? Good, I like that.
If you’re willing to let me post about it, email me your goals and a situation you’ve negotiated in the past or that you’re about to enter. I’ll use it in my next post to explain how to tease workable interests our of your larger goals that you can actually use to negotiate.
Man, I’m sure glad this post didn’t have anything to do with Tina Fey. Could you imagine how annoying that would be?
*(Which, incidentally, you do care about because you can trade those things for things you actually want; later post, promise.)
Shout out if any of this sounds familiar:
A client you’ve been wanting to work with for a while now emails you asking if you’re available to do some work. He’s heard about you through a friend of a friend, seen some of your stuff on line and hears you can turn projects around pretty quickly. He tells you that if the first few pieces work, he’ll likely have a lot more work next month. You do some quick math and decide to offer him your friend rate; you’ll make up whatever you lose on this project next month.
You knock out the project like a rock star, turn it around with time to spare and thrill the client. He calls three weeks later with more work, but balks when you quote him your going rate, “Man, three weeks ago it was 30% cheaper for more work; there’s no way I’m paying that much for this job.”
You’re pissed, he’s pissed and no one has what they want. You traipse off to the corner bar/coffee shop and bitch to your friends about the pain-in-ass that is freelancing.
What the heck happened?
You anchored without realizing it.
When you are the first person to name a price in negotiations you “anchor” the price. If you are the seller and you anchor, you set the highest value the price will reach; if you are the buyer and you anchor, the price won’t go below the number you name.
There is nothing inherently wrong with anchoring, but if you do it without explaining your number, or without doing your homework, you can turn a potentially great client relationship into a contentious haggling affair where everyone walks away unhappy.
I’ll talk about the benefits and detriments of anchoring in future posts, but for right now, I want to focus on the importance of communicating your price to a client. Providing information to a client about why your rate is your rate is the single easiest way of making money, but because we tend to think of talking about money as impolite, a lot of folks throw a number out to a client, hope it sticks and then adjusts their working schedule to juggle all of the client’s demands.
There is a better way, and while it can require a bit of extra footwork, it will also help you manage your clients’ expectations, avoid some common billing disputes, and turn new clients into loyal clients. Interested?
Then just send $19.95 and a self-addressed, stamped envelope to….
Take out a sheet of paper. Write your current hourly rate at the top. Write the word “Pissed” and underline it; underneath it, list everything that has pissed you off about rate or billing disputes related to your freelance work in the last 12 months. Everything.
Done? No? Ok, keep going.
Now? Good. Now write the word “Pleased” and underline it. List everything that made you want to work harder for someone in the last 12 months, or made you want to give someone a discount, of any kind.
Feel better? Good. Because you just did 70% of the work to create your very first rate sheet.
Your rate is the price at the top of the page. Everything under the “Pissed” column is what can increase that rate; everything in the “Pleased” column has the potential to decrease it. Assign rates, in dollars or percentages, to each of the items you’ve listed. Last minute request? 15% increase. First time client? 10% discount. Request for work when your workload is already packed full? $125 premium for the first 2 days; $75/day thereafter.
(Don’t use my numbers; I don’t do freelance work. Talk to other freelancers and figure out what’s fair for your experience and the type of work you do. I hear this is a good starting point.)
This rate sheet is the first thing you email a client when they inquire about a potential job. Number 1. First. At the beginning. BEFORE the work. Before.
You might not want to list everything you just wrote on they rate sheet you provide clients, but you do want to explain to a client before you accept a job or additional requests what is most likely to impact the price.
So, Mr. Client from before? Return email with a the rate sheet attached: “Hey, I’d love to work with you and I think this project will be a great fit. I have some time to take this on and I should be able to meet your deadlines without a problem. I’ve attached my rate sheet, which explains what factors can impact pricing. Based on what you’ve told me, I estimate this will be about 12 hours of work. Because you’re a new client and because you think there is the potential for additional work, I’ll give you a 30% discount on my normal rate. Feel free to call if you have any questions.”
He knows he’s getting a discount, knows what to expect from you in the future and feels special. Score.