Influence

Negotiation Myth #1

Be careful what you start. Situations worthwhile entering may not be worthwhile pursuing. Continuing a course of action beyond what is rational is common in negotiation – the initial goal may remain despite new information that changes the value of the outcome. Be aware of persistence and consistency in this regard. We must recognise that time; money and effort already expended are sunk costs that cannot be recovered. The reference for whether a bargain is of value is whether it is of present value. When looking at options consider:

Present (costs + benefits) + Future (costs + benefits)

So why do we stay committed to a sometimes irrational course of action?

• To justify prior decisions and offers
• Perception often filters in what confirms the decision and filters out what goes against it.
• Consistency is valued – we like to act consistent with our prior actions because we assume that if we did it before it must be a good idea.

Sometimes winners quit because to keep negotiating will give them a deal that leaves them worse off than no deal at all.

How to market professional services

One of the most vital issues in marketing professional services is building client satisfaction and loyalty. In many of the firms I work with the same results are reflected year after year. Clients seem to be happy about technical competence of firms but are looking for more. An interesting question here was studied by Professor Chebat from HEC Montreal. He studied the client's decision making processes when appointing consulting engineers. His findings are very interesting. For example, when appointing a firm which is the most important to the satisfaction of clients?

A. Quality, that is competence, reliability and communication; or,
B. Value, that is fairness of price, acceptable time and reasonable effort?

Chebat found that clients are more interested in value than quality. Their perception of value is based on the positive perception of the sacrifice or “give” component in the relationship because they are so involved in the project development. It seems in this case technical quality is not irrelevant its just assumed to be at a high level as a price of consideration.