The most important thing when negotiating

Published en El Pais, 19 January 2019.

Throughout our days, weeks, years, lives, we negotiate many things. Like the price of a bag of apples, the price of a house or a new salary. This is the beauty of a free and good functioning market. With the information we have we can decide the price we are willing to pay and if possible, pay a bit less, or receive a bit more in the case you are selling. However, some people see a successful negotiation when they hid some critical information or took advantage of the other person. That is a sad thing and eventually will shoot you in the back, and here is why.

Maybe you didn’t notice, but many negotiations and agreements are not put on paper. When you buy a kg of tomatoes on the market, the whole agreement goes orally. One would say that this is because the amount of money is little, but that is not correct, many companies makes big deals of tens of thousands of dollars just over the phone. Simply because they know each other for a long time and do not want to lose this relation. The value of having a good relation goes beyond the cost of a negotiation and making, and probably, a contract. Beside actual money it saves a lot of time and headaches.

Many times, people forget that the long-term relation makes business so much easier. The short-term gain of ‘winning’ with some dirty tricks or hidden information will often be offset in the long run. The most critical aspect in negotiation is to reach a win-win result. A point in which, both parties are happy with. Maybe both think that they could have made more money, but that they know that this is the best possible outcome taking all into account.

The person selling you tomatoes might make some extra money by including few bad ones in the bag. She might think that she did a good deal, but she forgets that you won’t buy again from her. An employer might negotiate a very low salary with a person who urgently needs a job, but forgets that the worker will not be motivated and will leave at the first opportunity of something better.

So next time when negotiating, think about the long-term effects of the ‘great’ deal before you go ahead and remember the real value of having a long term provider or client.