Most Negotiations Aren’t About Money

Most negotiations aren’t about money.

No, there’s not a punch line coming. It’s a true statement—in most negotiations, money isn’t the main thing!

I live in Marin County, above San Francisco. If you stuck a pin in the map where my house is, and drew a circle seventy-five miles out in every direction, it would encompass San Francisco, the North Bay, Silicon Valley, Napa, Sonoma, the East Bay . . . It’s a lot of folks. And it’s likely much the same where you live.

It’s a safe statement to say that any morning, from around nine to noon, somewhere in the neighborhood of a hundred thousand business negotiations will take place within that circle. Many of those negotiations are between a procurement person and a salesperson, and they’re going at it full tilt, sometimes over a nickel! And here’s what’s interesting: neither of them is negotiating with their own money. The procurement person is negotiating with the company’s money, and depending on the commission structure, the salesperson is, too. So here we have two people in a negotiation, going at it hammer and tongs, and neither one has their own money on the line!

So what’s driving those negotiations?

Common drivers in negotiations include impatience, not being taken, being important, and looking good. In our hypothetical negotiation, both parties want to look good. The procurement guy wants to shine in front of his boss. He wants to be able to go in and say, “I got this guy down a nickel a unit, and when you extrapolate the numbers out three years, it comes to seventy-two thousand dollars!”

And the salesperson wants to look good to her sales manager. I love salespeople. I’ve sold, and I’ve managed salespeople, and you’ve had them on your team, too. Some of the best will work late, miss lunch, and bust their hump all year to walk across the stage and get a plaque that cost seventy-eight dollars.

Another key driver on both sides of the above negotiation is competition. Good business people, just like athletes, are often very competitive. And that’s an important thing to remember the next time you’re in a tough negotiation and you just can’t get it to budge. Chances are, it’s not really about the money. You’re just dealing with someone who likes the tussle.

If you pay attention, you can get an inkling of what the main driver is for the person you’re negotiating with. Is this procurement manager wary of getting taken because of a previous negotiation? Is this broker tired of slogging it out and just ready to make the deal? Does this sales rep want, more than anything, to look good when she reports to the boss? Does the guy across the table want above all else to win the victory and feel triumphant? It’s never just about the money, and if you can figure out the drivers that are pushing the other negotiator, you’re halfway to getting what you want.

Good negotiating to you,

Bob