You're listening to Business English Pod, the Business English podcast for professionals on the move.
Hello, and welcome back to Business English Pod.
My name's Edwin, and I'll be your host for today's lesson on strategic negotiations.
Negotiating a good partnership requires the right balance of determination and compromise.
You lay out your opening position and try to get as much as you can out of the deal.
But you have to accept that you can't get everything you want.
You need to find common ground and reach a satisfying agreement.
And that takes skill.
But like all skills, negotiation is something you can learn.
And today we'll look at several techniques for reaching agreement, including easing off an aggressive position, proposing an exchange and making a counterproposal.
We'll also cover how to propose a compromise and summarize areas of agreement.
In the dialogue, you'll hear Mike and Lisa negotiating a strategic partnership.
Mike represents a US auto parts company called Sigma, while Lisa is leading the negotiation for MVP, a Japanese distributor.
Together, they're trying to work out a deal for MVP to distribute Sigma's products in Asia.
As you listen, try to answer the following questions.
1.
What does Lisa initially propose as an exchange?
2.
What does Mike propose to offset the costs of buying out their Chinese partner?
3.
What is the final compromise on staffing for the deal?
And finding the right deal means finding a partner that we can work well with.
Of course it does, Mike.
And that's exactly what we're looking for.
We've invested in relationships with small manufacturers before that have not always worked out.
So we need to manage our own risk as well.
Certainly.
Sounds like we're thinking along the same lines here.
And I'm pretty confident that we can find a way forward together on this.
Yes, I believe we can.
And so, as far as staffing and marketing go, here's what we might be able to do.
If you agree to China and can commit something like six staff to Asia, we'd cover half of any Asian marketing costs.
That's advertising and trade shows.
And we would still take care of the online side of things.
Yeah, that would remain up to you.
And travel for your staff outside of trade shows.
Well, look, Lisa.
The costs for us are about more than just ongoing operations.
We'd be buying out our Chinese partner at no small price.
So how about this?
If we're putting China into the mix here, let's say two staff.
And we'd like to knock your commission down by 20% for two years.
20% on commission?
That's a pretty big hit for us.
But only for two years.
After that, we're back to the original rate.
Hmm.
That's still pretty steep.
And two staff?
That really doesn't seem like enough support.
So what about this?
Maybe we can meet in the middle.
Perhaps we could look at a headcount of four and I'll have to check on this but a 10 commission cut for two years.
Again, I need to confirm that, but I'm pretty confident it'll work.
10%, huh?
It doesn't get us quite to where we need to be, but I think we'd be willing to accept that.
All right, then.
Okay, so let me just make sure I've got this straight here.
We're talking a distribution deal for all of Asia, including China.
We'll get out of our existing China deal and put four of our people on this.
MVP will kick in for half of our marketing costs and take a 10 commission cut for the first two years.
Now let's go through the dialogue again and look at the language and techniques Mike and Lisa used during their negotiation.
And finding the right deal means finding a partner that we can work well with.
Of course it does, Mike.
And that's exactly what we're looking for.
We've invested in relationships with small manufacturers before that have not always worked out.
So we need to manage our own risk as well.
Mike ended the last part of the negotiation by making a strategic threat, emphasizing that Sigma has other distribution possibilities and wants to find the right partner.
But Lisa is a good negotiator and she doesn't want to respond weekly.
Instead, she wants to respond in a similar manner.
So she emphasizes that MVP has had partnerships that have not been successful or worked out in the past.
Lisa wants to show that they both have concerns about risk.
How does Mike respond now that Lisa has faced his threat confidently?
Certainly.
Sounds like we're thinking along the same lines here.
And I'm pretty confident that we can find a way forward together on this.
At this point, Mike wants to ease off his aggressive position.
He does this by turning the shared risk into something they have in common, and he tries to reestablish an attitude of cooperation by saying that he's confident they can find a way forward or reach an agreement.
Sometimes, easing off an aggressive position is the best thing to do in a negotiation, so let's practice a few more examples.
Yes, well I'm sure we can work something out here.
Either way, we're excited about the possibility of a partnership.
But let's try to figure something out that works for both of us.
In any case, I think this is a great opportunity.
Now Lisa takes this cooperative attitude to propose a deal.
Yes, I believe we can.
And so, as far as staffing and marketing go, here's what we might be able to do.
If you agree to China and can commit something like six staff to Asia, we'd cover half of any Asian marketing costs.
That's advertising and trade shows.
Lisa begins by echoing Mike's confidence. which helps set up her proposed exchange of concessions.
Lisa doesn't want to give away too much, so she introduces the exchange with the expression here's what we might be able to do.
That way it's clear it's just a suggestion and there's room for negotiation.
Let's go through some more ways we can propose an exchange of concessions in a negotiation.
Here's an idea.
We'll give you a 25% share of the profits if you agree to a three-year deal.
What if we agree to relocate 10 staff while you guys cover marketing and promotion?
Here's what we could do.
You get access to our content and we get your distribution network.
What about this?
Your mapping technology for our data management system.
How does Mike respond to Lisa's proposed exchange?
And we would still take care of the online side of things?
Yeah, that would remain up to you.
And travel for your staff outside of trade shows.
Well look Lisa, the costs for us are about more than just ongoing operations.
We'd be buying out our Chinese partner at no small price.
So how about this?
If we're putting China into the mix here, let's say two staff, and we'd like to knock your commission down by 20 for two years.
Of course, in negotiation, we don't always agree to the first idea we hear.
That wouldn't really be negotiation.
Mike wants to come back with a counter-proposal.
After clarifying responsibility for online marketing, Mike takes a serious tone saying look, Lisa.
Before explaining the costs involved in agreeing to include China in the deal,
You may remember that including China was a big sticking point.
Mike wants to get as much as possible out of this demand of Lisa's.
So he reminds Lisa of the costs before using more suggestion language, saying, how about this? to introduce his counterproposal involving fewer staff and a 20% commission reduction.
What are some other ways we can make a counterproposal?
Let's try a few more.
How about instead we take a 35% share on a two-year deal?
Another way we could do this is to go halves on marketing and staff.
How about this?
We do all the design work and you take care of the back end.
For us, it makes more sense to make a minimum of 30 referrals a month for a 20% cut.
Now, back to the dialogue as Mike and Lisa try to come to agreement.
20% on commission, that's a pretty big hit for us. but only for two years.
After that, we're back to the original rate.
Hmm, that's still pretty steep.
And two staff, that really doesn't seem like enough support.
So what about this?
Maybe we can meet in the middle.
Perhaps we could look at a headcount of four and I'll have to check on this but a 10 commission cut for two years.
Just like Mike, Lisa doesn't accept the first thing she hears and she emphasizes the costs for her company in Mike's counterproposal.
Lisa shows dissatisfaction with Mike's idea, both in terms of cost and staffing, to try to bring Mike closer to her position.
And once again, she uses the language of suggestion, saying, what about this, to set up a proposal.
This time, her proposal is a compromise between the two negotiating positions.
Or, as she says, she wants to meet in the middle.
This is a typical negotiating tactic, but it only works if each party takes different initial positions.
You have to work your way toward agreement and compromise, as Mike and Lisa have done.
Now let's run through some more ways of proposing a compromise in a negotiation.
Maybe it's best to go right between these two numbers and agree to 30%.
Okay.
Well, we could give a little on the time frame if you can agree to six people.
One way around this is to share both operating costs and marketing expenses.
What if we met in the middle on this and agreed to one million over two years?
Does Mike accept the compromise?
Again, I need to confirm that, but I'm pretty confident it'll work.
Ten percent, huh?
It doesn't get us quite to where we need to be, but I think we'd be willing to accept that.
All right, then.
Yes, Mike accepts the compromise, but not wholeheartedly.
He says, ten percent, huh?
To sound hesitant or cast doubt on the idea, and he makes a point of saying that it's not a perfect solution for his company.
In negotiation, we try to sound like we're giving a lot up in the hopes of gaining more later.
Still, Mike agrees.
And after this back and forth with Lisa, he wants to make sure everything is clear.
Okay, so let me just make sure I've got this straight here.
We're talking a distribution deal for all of Asia, including China.
We'll get out of our existing China deal and put four of our people on this.
MVP will kick in for half of our marketing costs and take a 10 commission cut for the first two years.
Throughout the negotiation, Mike and Lisa have used the language of suggestion and said what they might be able to do.
So now Mike wants to clarify that they've actually agreed to what they've discussed.
To do this, he gives a short and simple summary of the points, briefly listing what each side will do or contribute.
What are some other ways we can confirm areas of agreement at key stages of a negotiation?
Let's run through a few more examples.
Let's just run through this again so we understand where we're at.
Okay, I'd just like to go over what we discussed to make sure everything's clear.
Now, tell me if this sounds correct.
Just to be 100% clear on all this, let me go over what we've agreed so far.
Well, it sounds like Mike and Lisa have made good progress in the negotiation and reached agreement on some key points.
Now, let's practice some of the language we learned in today's lesson.
Imagine you are part of a strategic negotiation about opening a retail chain.
I'll give you a cue telling you what you need to do.
Then, you'll hear a prompt.
Use the words in the prompt to make an effective statement during the negotiation.
We'll guide you through each step in the practice and play an example answer for each response.
Ready?
Let's give it a go.
Start off by easing off an aggressive position that you took earlier in the negotiation.
Sure.
Find.
Solution, move forward answer.
Well, I'm sure we can find a solution and move forward with this.
Next, propose exchanging five percent of sales for a five-year lease.
What about five percent sales?
Five-year lease?
Answer what about five percent of sales for a five-year lease?
Now try making a counter proposal saying that you can agree to a three-year lease including utilities.
Instead, accept three-year utilities.
Answer Instead, we could accept a three-year lease that includes utilities.
Next, propose a compromise of 6% of sales for a four-year lease.
Maybe Best 6% 4-year lease Answer Maybe it would be best to go with 6% of sales for a 4-year lease.
Finally, tell the other person that you want to confirm areas of agreement.
Go over Discussed.
Make sure Clear Answer.
Okay, I just want to go over what we discussed to make sure everything's clear.
Now let's practice some of the vocabulary and collocations we've covered in this lesson.
In a moment, you'll hear a series of sentences with a word replaced with a beep.
Repeat each sentence, including the missing word.
For example, if you hear, I'd like to meet next week and find a way on this project.
You can say, I'd like to meet next week and find a way forward on this project.
After each response, we'll play the correct answer.
Let's begin.
Answer.
Would you be willing to knock down the price by 10% or so?
Maybe the best thing is to meet in the... at $40,000.
Answer.
Maybe the best thing is to meet in the middle at $40,000.
I'm sorry, but that price is just too... for us to agree to.
Answer.
I'm sorry, but that price is just too steep for us to agree to.
Okay, let's go over this again, just so we've got everything... Answer.
Okay, let's go over this again, just so we've got everything straight.
We've reached the end of this lesson, the fourth in our series on strategic negotiations.
We've learned how to ease off an aggressive position, propose an exchange of concessions and make a counterproposal.
We've also learned how to propose a compromise and confirm areas of agreement.
Thanks for listening, and see you again soon.
