General Negotiation October 15, 2012

The Present Value of Satisfaction

A negotiator should approach their negotiating like an investor approaches the stock market.

Prudent stock market investors look to increase the value of their money. They look at growth potential, expected dividends, and risks associated with an investment. They attempt to compute the present value of the investment given the expected growth rate and dividend payouts. This present value is balanced against the associated risks, compared to other potential investments, and a decision is made to buy or not. Is the investment fairly priced, over-valued, or under-valued?

A good negotiator does the same thing, but on a very subjective level. Negotiators need to focus on the present value of satisfaction, determine the present value of future satisfactions (and dissatisfactions), and compare that to making no deal at all or holding out for a better deal.

This brings up a fundamental but subtle point about any negotiation. The flow of positive and negative satisfiers in any deal is in the head of each participant. Some participants are optimistic about the future. Others are pessimistic. Some are “I-want-my-kicks-right-now” people, while others are prepared to wait a long time.

Much of your strength as a negotiator comes from your ability to provide satisfaction in one form or another. You can help raise the present value of the deal by getting the other party to place a higher value on future satisfaction. You can do the same thing by showing them that future dissatisfactions are unlikely. If they want kicks now, show them how much more important kicks will be later.

Concessions can play a big role in creating the flow of satisfaction. But this flow between people is not as simple as it looks. Before you start making concessions to increase satisfaction, think about how you want to do it. Take into account who will benefit, in what way, when, and from what source.

A concession can provide satisfaction to the receiver now or later. Maybe the receiver wants to take it all at once or a little at a time. A concession can direct its benefits to the organization, specific parts of the organization, third parties, to the other negotiator on a personal level, or to all of them at once.

Every negotiator has the same role to perform: to raise the present value of future satisfaction for the other person and thereby help the other party reach a decision.

THE PROGRAM WAS GREAT! MY SEMINAR LEADER AND THE STRUCTURE OF THE COURSE KEPT ME CONSTANTLY STIMULATED. I NOW AM BETTER PREPARED TO GO INTO AN IMPORTANT NEGOTIATION MEETING AND STAY IN CONTROL, WHILE FINISHING THE MEETING SATISFIED.

Deanna D.
CASE MANAGER at THE JACKSON LABORATORY

IF YOU HAVE THE TRAINING BUDGET AND TWO DAYS TO SPARE, YOU'LL STRUGGLE TO FIND A PROGRAM MORE FAR-REACHING, ON-POINT, AND INSTANTLY IMPLEMENTABLE.

Jeff G.
BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY

EXCELLENT COURSE, BRINGS MORE CONFIDENCE IN MY ABILITY TO NEGOTIATE. I THINK THIS COURSE IS A MUST FOR ALL EMPLOYEES WHO DEAL WITH CUSTOMERS.

John S.
CHIEF ENGINEERING MANAGER at EXXONMOBIL

THIS WAS VERY EFFECTIVE WITH A STRONG FOCUS ON BOTH-WIN NEGOTIATING.

Kathleen L.
SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN

THE KARRASS CLASS WAS THE SINGLE BEST TRAINING CLASS/SEMINAR I HAVE EVER ATTENDED. EVERY TIME WE DID AN EXERCISE IT TAUGHT YOU WHAT TO DO DIFFERENTLY NEXT TIME. THANKS.

Kim C.
PROCUREMENT at AMERICAN EXPRESS

THIS PROGRAM HAS GREATLY INCREASED MY CONFIDENCE AND ABILITY TO NEGOTIATE FOR MYSELF AS WELL AS MY COMPANY.

LaDonna E.
SENIOR STRATEGIC BUYER at HALLMARK

THE NEGOTIATING CLASS WAS VERY INFORMATIVE. THE INSTRUCTOR PROVIDED AN INSPIRATIONAL MESSAGE THAT CAN BE APPLIED TO EVERYDAY LIFE.

Mary S.
INTERNATIONAL SOURCING at FMC TECHNOLOGIES

WE NEGOTIATE EVERY DAY OF OUR LIVES, BOTH PERSONALLY AND PROFESSIONALLY. THIS COURSE DEFINES THE PROCESS AND PROVIDES TECHNIQUES TO ACHIEVE SUCCESSFUL RESULTS.

Phillip H.
VICE PRESIDENT at GE

PRIOR TO THIS CLASS I FELT AS THOUGH I WAS GETTING EATEN ALIVE BY INTERNAL NEGOTIATIONS WITH SALES REPS. NOW I FEEL PREPARED TO CHALLENGE WHAT THEY ARE SAYING AND BET TO THEIR REAL NEEDS.

Steve Q.
PLANNER at HONEYWELL

MANY PEOPLE FAIL TO ACHIEVE THEIR POTENTIAL BECAUSE THEY DON’T SEE THE OPPORTUNITIES TO NEGOTIATE A WIN/WIN AGREEMENT WITH THEIR COLLEAGUES. THIS CLASS IS AN EYE OPENER TO THIS DYNAMIC..

Stuart B.
CONTRACTS MANAGER at HEWLETT-PACKARD
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