Let us never negotiate out of fear, but let us never fear to negotiate.
– John F. Kennedy
“Reason & Rationale” is a favorite countertactic used by experienced negotiators. It’s popular because it’s a two-edged tactic. On one hand, it offers reason and rationale. On the other hand, it demands the same in return.
Negotiation Tools from the Tudors
In 1582, Protestants in the Netherlands were struggling to gain independence from their Catholic ruler, Spain. Inquisition executions and brutal torturing techniques rallied the Dutch Protestants to revolt. Seeking assistance from England, the Protestant rebels appealed to Queen Elizabeth I. Not wishing to engage in open warfare with Spain, the most powerful empire in the world at the time, Elizabeth resisted intervention. In 1585, however, she agreed to a treaty which bound her to send an army to assist the Dutch Protestants. Before committing English troops, though, she issued an extraordinary twenty-page pamphlet that was translated into French, Spanish, and Dutch, and distributed across England and continental Europe. The pamphlet and its distribution was an unprecedented move – a sovereign ruler justifying her actions before the opinions of the world. In her political treatise, she provided the reason and rational for her intervention. She discussed the tyrannical nature of Spanish governors and outlined the violation of “ancient laws of liberty.” The pamphlet had the desired effect and rallied Protestants across Europe to support her decision.
Although sellers should never feel obliged to apologize for their actions, like Queen Elizabeth I, they should always be prepared to provide “reason & rationale” to justify prices and proposals. By using “reason & rationale” sellers keep the dialogue focused on merits, principles, and reason. When appropriate, seasoned negotiators use industry standards, testimonials, references, and client case-studies to promote, defend, and justify product or corporate benefits, price structures and negotiation positions.
Communicating “reason & rationale” is a negotiation tactics designed to generate support for the price and/or proposal. When a seller uses reason and logic to support proposals, buyers don’t feel like they are being personally attacked. Instead, the seller’s position legitimately demands attention based on the merits being presented.
Principles not Pressure
Using and requiring reason and rationale also ensures that solutions are reached based on principles, not pressure. For example, why not insist that a negotiated price be based on some objective standard such as a solution value, return on investment, market value, precedent, replacement cost, or competitive pricing, instead of just random demands or desires?
A good principle to follow in a price negotiation is to be specific. Provide specific reasons for existing price structures. This is especially important when dealing with a calculating buyer. Offer rationale to support your position. This does not mean offering cost breakdowns or margin structures. It means supporting your prices with capability sheets and benefit statements.
You might base your price position on specific issues such as:
- Better Products
- Better Service
- Better Quality
- Better Reputation
- Better Solutions
- Better Support
- Better Warranty
- Better Technology
Concrete details make price positions more credible. By providing buyers with reasons for your price and rational for your proposal, you justify price structures and take price related bargaining power away from buyers.
Use “reason & rationale” to explain your proposal and justify your price structure with compelling facts and differentials. Using “reason & rationale” justifies your position, enhances your credibility and, ultimately, translates into seller power.