Not every negotiation ends in agreement. Sometimes, you have to agree to disagree. But this does not mean you cannot change the parameters of the discussion and look for alternative arrangements. There are several things you can do when a negotiation breaks down. Have a look at the conversation below and highlight the words and phrases you might find useful when managing a negotiation breakdown.
Expressions in context
Harry is a sales rep and Lisa is a purchaser. They are negotiating a logistics contract.
Harry: Lisa, I'm really sorry, but I've reached my walk-away point. I just can't give you the rates you want.
Lisa: We've been working together successfully for three years now. Surely, renewing the contract is in your best interest.
Harry: It is. But not at those reduced rates.
Lisa: Do you need a timeout to speak to anyone?
Harry: It wouldn't help, I'm afraid. I've gone as far as I can for this size of contract.
Lisa: What if you were to talk to my boss? Would that help?
Harry: Only if he could widen the scope of the contract.
Lisa: Our other distribution centres all have contracts with local logistics firms. But we're thinking of expanding into the north next year.
Harry: We're active there. Would that contract be similar to this one?
Lisa: Almost certainly.
Harry: Well, if you could guarantee that contract for your northern distribution centre, we could reconsider the whole pricing package.
Lisa: I can't guarantee that today. I'd have to talk to the people involved.
Harry: That's OK. We've come so far already. Neither of us wants to have to look for new business partners.
Lisa: If that doesn't work, we could also look at the possibility of you providing just the warehousing needs rather than the whole logistics package.
Harry: I hope it doesn't come to that. But that would be better than no agreement at all.
Remember
- When preparing for a negotiation, define your BATNA (best alternative to a negotiated agreement) as a backup plan. A good BATNA gives you strength in the negotiation.
- If there's an impasse in the negotiation, take a timeout. Perhaps the problem is a clash of personalities, and a change of people on your side might help. Perhaps there are cultural issues to discuss. Or maybe the problem lies not in the details of the negotiation but in the negotiation process itself.
- Remind your business partner of previous instances of successful cooperation. Connect this with a description of how the market is changing and with promises of managing those changes in the future.
- Change the size of the package. Add to the scope of the agreement or, failing that, make the package smaller. Find a part of the package that you can agree on.
- If you fail to come to an agreement, both sides will have wasted time, energy and resources. Remind your business partner of these negative consequences. If you still cannot come to an agreement, specify the areas of agreement and disagreement. Keep the door open for future cooperation.