What Are The Different Types Of Negotiations?
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How To Negotiate Using Different Platforms

Historically, organizations have held up face-to-face negotiations as the ideal way of negotiating—and this is reflected in the fact that until recently, the majority of negotiation training was face-to-face itself, focused upon developing competence in face-to-face negotiation. If you enrolled in a negotiation course, the likelihood that it would be conducted in a classroom with a teacher and fellow students all sitting and working together in real life was high.

But the fact is, now more than ever, many types of negotiations should not or cannot be conducted face-to-face. Consider an eAuction where a buyer is purchasing a commodity and many suppliers are involved. Does it make sense to substitute an eAuction with a face-to-face negotiation? No, of course it doesn’t. The reality is clear and logical: different mediums are appropriate for different purposes and types of negotiations.

Face-to-face provides the richest form of communication, as it allows both parties to receive instant verbal and visual information and social clues. Our brains and senses are set to interact in a face-to-face mode. It feels more natural and it is easier to secure movement, build trust, and develop personal relationships.

Other forms of communication (video conference, email, phone, and messaging) are different. The brain works differently when interacting with those media because of the lack of certain feedback and social cues. This results in the brain playing tricks such as filling information gaps with personal biases, overconcentrating on specific pieces of information, reducing the retention of what was discussed, etc.

Nevertheless, different media have advantages to help negotiation subtasks relating to time, specificity, and reliability of technical information, efficiency, preconditioning, and other matters.

Cross Section Of Various Media And Their Advantages

MEDIA Most Appropriate For
Face-to-face
  • Creative and collaborative negotiations
  • When both parties don’t have a relationship
Video conference
  • Creative and collaborative negotiations
  • When both parties have a relationship, it could replace face-to-face interactions
Telephone
  • Initial exploratory conversations when there is already a relationship in place.
  • To solve final differences or pending issues.
  • Competitive negotiations
Email
  • Competitive or distributive negotiations
  • To submit technical proposals.
  • RFIs, RFPs
Messaging
  • Very limited negotiation potential
  • More of a coordination tool or a way to communicate “we have an emergency”

Clearly, face-to-face is not always preferable for every situation. Additionally, you can switch between platforms to conduct different parts of a negotiation.

Recommended Actions By Media

On the following table, we aim to provide a detailed set of recommendations of what things could be done through which media, and then we will provide a more in-depth explanation of the dynamics, advantages, dangers, and pitfalls of negotiating through each virtual media.

We suggest specific platforms for certain actions based on the richness of communication, the risk of misperception of intentions, efficiency, and effective use of time, and contentious biases attached to each platform.

General rules:

  • Use the face-to-face or video conference when you need to build or develop a relationship when it is a collaborative negotiation with opportunity for value creation; when you need to ask open questions and explore alternatives and joint solutions (if you use video conferences, make sure to turn the video on; if you don’t it, is just a telephone call).
  • Share data and technical information through email before meetings/VCs/calls that will help make further decisions. People should not spend the time looking at complicated/technical data for the first time during a meeting, although you can review questions during a face-to-face meeting, a video conference, or even a telephone call.
  • Email is a great tool to send summaries; submit long proposals; use for RFIs or RFPs; and, to conduct early stages of negotiations that require standardization, are focused on distributive value, or require fewer conversations.
  • Messaging and texting can be appropriate to coordinate specific timings and actions, flag emergency issues, and even to negotiate commodity prices. It is not a good substitute for other means of communication or to engage in more complex interactions.

Negotiating Through Video Conference

This is the closest thing to face-to-face, though it is not the same. It offers both visual and verbal information. But, there are nuances you need to be aware of.

The brain doesn’t feel as at ease during a video conference as it does during a face-to-face interaction because of different factors:

  • You are looking at a 2-dimensional image rather than one in 3D
  • Sometimes there are sound delays
  • When many people talk, there is some overlapping in communication. (Who’s turn is it to talk?)
  • People tend to get frustrated when there are lots of people on the call who joining at different times or leaving early

In general, it is a decent substitute for face-to-face interactions and suitable for collaborating, asking open questions, establishing rapport and developing relationships, exploring creative ways of solving issues, and a cost-efficient way of communicating with people who are located in different geographies.

The fewer people you have on a video conference, the more personal it is (it is easier to collaborate with fewer individuals).

When face-to-face meetings are not possible, it may be the only effective way to engage in creative interactions. If you want to create value, understand what the other party can and cannot do in order to find alternatives. Email is inefficient and the telephone lacks the social clues that often foster the trust to open and share information openly. This makes a video conference the best alternative for such collaboration. With video, you get visual feedback and can understand the intentions and preferences of the other party in order to assess their openness toward discussing alternatives or measure their intentions. It also helps you build on what the other party is saying and co-find a solution.

If you are meeting the other person for the first time during a video conference, it is in your best interest to build trust. Make sure to use a friendly tone, as your body language (movement of arms and hands and other pieces of non-verbal information produced by your body) is not easily transmissible, hence your volume, tone of voice, and pace of your speech increase their effects.

Negotiating Via Telephone

The telephone provides an instant form of communication that is rich in terms of verbal content and the way in which things are being said: tone of voice, volume, pace, pauses. However, it completely lacks visual information.

The way in which you use your voice is key in this context. You need to remain consciously competent to be able to send the messages that you want to send and control your reactions, as every pause, the inflection of voice or tone gets amplified due to the lack of other social clues.

The telephone is useful to discuss problems, sort things out, or to discuss possible solutions that would otherwise take too long through email. The key here is to understand the expected amount of interaction required to move forward. If you expect a couple of back and forths, if there is a need to ask questions and build on the other party’s answers, if both parties will have to explore in-depth, then the telephone is a better alternative to an email—although, a video conference might be even better.

People tend to over-rely on email when sometimes they should just pick up the phone. Especially, when there is a certain degree of trust between two parties; when there are misunderstandings in the email chain; and, when things are not moving forward due to lack of response.

Negotiating Through Email

Although email is a powerful communication and negotiation tool that, when properly used, can be very productive and useful. However, there are also issues and biases attached to writing and reading emails (especially). On one hand, people often overestimate their ability to communicate clearly through email. Frequently, people write emails that are more ambiguous, unclear, and irrelevant than they think.

On the other hand, people who receive emails tend to be more suspicious about the sender’s intentions and they overread between the lines (looking for or perceiving intentions that might or might not be there).

The message in the head of the sender is usually different than the message being processed in the head of the receiver. This leads to misunderstandings and sometimes negative predispositions.

Two questions to ask when negotiating by email:

  • What type of negotiation are you in? Collaborative or competitive? (In The Gap Partnership’s terms: Where are you on the clockface?)
  • What is the relationship with the counterparty? Have you met with them or not?

The nature of the negotiation and the level of relationship will greatly determine the degree of defensiveness and the overall attitude toward the other party.

                                Competitive Negotiation                                            Collaborative Negotiation
No

Relationship

  • Expect little feedback/responsiveness to your emails
  • Probable misinterpretations
  • Low trust
  • Expect restricting demands of guarantees or performance measures to avoid risks and control uncertainty
  • Recommendable to have face-to-face or video conference conversations at early stages
  • Include explanatory videos (if appropriate)
  • It is unlikely to build trust or develop a relationship through sticking to emails
  • Clients are likely to prefer suppliers that they know already before trying taking the risk of working with new suppliers
  • Your creative solutions and proposals are less likely to be considered as reliable
  • Your counterparty is less likely to openly discuss worries, interests, and possibilities
Some Relationship
  • When there are few variables, a balance between trust and tension is likely to be achieved
  • Expect enough information to be given to provide meaningful proposals, but not enough interaction to find creative solutions
  • There are opportunities to engage in creative trading, although the type of communication through email often restricts them
  • The other party is likely to trust you, but still expect tactics to be used
  • Moving toward video conference and telephone calls should be encouraged
Good Relationship
  • They are probably willing to work with you but are seeking concessions on price and/or other contentious variables
  • If there is scope to create value through analyzing efficiencies and synergies, video conference and telephone should be used
  • Stay friendly
  • Show empathy; show that you understand their issues/needs/interests
  • Try using face-to-face, video conference or telephone to have broader conversations
  • Less likely to be misperceived or to trigger mistrust

In general terms, email can lead to misunderstandings and getting stuck to entrenched positions. People tend to blame themselves for not understanding properly what the other party is complaining or getting aggressive about. In the end, it doesn’t matter who’s fault it is, as negotiation is about finding a solution or an agreement rather than deciding who is to blame.

Here are some proactive steps you can take to avoid these pitfalls:

  • Don’t get trapped into ego or defensiveness, think about what you are trying to achieve and what the right path toward your goal is.
  • State in your emails what you understand about what the other party is saying, make sure you are both talking about the same thing.
  • Read your email twice before sending it. Make sure that you are being crystal clear and that your message is unlikely to be misunderstood.
  • Resist the temptation to use inflammatory language. If you feel that the other party is being aggressive or offensive, let your email sit as a draft for a while and then re-read it before sending it. This will ensure you are replying to move forward instead of just defending your ego and making things worse.
  • Summarize your understanding of key points and next steps at the end of an email.

Negotiating Through Texting

Texting is the type of communication that offers the least content. It is often relevant and useful for dealing with emergencies, immediate needs, or coordinating actions to then take further steps. Some people use it to negotiate prices over commodities, which can be very useful and efficient. However, it lacks all sorts of non-verbal communications and is highly likely for parties to be misinterpreted as aggressive, demanding, or un-empathic.

Emoticons are often used as a way of reducing the perception of aggressiveness. While this can be effective, they too are open to misinterpretation. If you are looking for creative solutions, then texting and IM are not appropriate ways of creating trust or exploring or discussing alternatives since the lack of a rich interaction tends to create mistrust, and the limited amount of information boosts the receiver’s biases to fill gaps of information.

Final Comments

Think about how you are communicating. How much thought and consciousness are you giving to what you say, write, listen to, and read? How are you combining and selecting media to communicate, and for what purpose?

It’s also prudent to think about your own baseline capability and skillset in each of the types of negotiations that I’ve discussed. If you want to generally increase your expertise and confidence, then consider investing in a negotiation training course. And if you are interested specifically in learning how to negotiate remotely, then a virtual negotiation training course could be a wise investment.

Let’s end by considering, for a moment, someone most of us have heard of, Warren Buffett. He is one of the wealthiest people on the planet who, in 50 years since 1965, beat the S&P 500 by delivering returns at 155 times the index. It is interesting to note that the only diploma he has hanging on his office wall is for a public speaking course that cost him US$100. Logic would dictate, if Warren Buffett holds communication in such high regard, there is probably a very good reason.

This article was written in collaboration with Rodrigo Malandre, a consultant at The Gap Partnership.

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