Pareto Principle – Applied to Negotiating

September 22, 2011 — 1 Comment

Photo By Sarah Stelzl

Pareto’s Principle – the 80/20 rule, applies in so many situations; negotiations included.  Listen 80 percent of the time, talk the other 20.  Great negotiation has a lot to do with a person’s ability to discern the hidden truths of what is being discussed, debated, or negotiated.

While the purchasing officer may be a well trained negotiator, most managers that pressure you to discount, are not.  Learn to ask great questions that will lead your opponent to talking.  Reflecting back what you’ve heard is often effective in getting them to continue talking.  The more they talk, the more likely they are to show their cards.

Start with those you are working with – the implementers.  Investigate, discover, and analyze.  Long before you get to the negotiation table, you should know their timelines, the urgency of their project or initiative, alternatives they’ve considered, and even some of the other firms who have been considered.

 

 

  • Know why they chose you – you should have a verbal before writing your proposal if you’re following earlier advice I have given.
  • Learn who else was considered for this project and why they might not have been selected.
  • Ask, who besides yourself will be involved in the decision making process.  By asking this way, you avoid pointing out that your listener may not be the actual buyer.
  • Know what business processes will be affected by this initiative, and what impact the final solution will have on the business.

By understanding these things, you stand a much better chance of closing this business without caving in on price.

© 2011, David Stelzl

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One response to Pareto Principle – Applied to Negotiating

  1. 

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