In Negotiations, to be Successful Know What You Want and Need

negotiation Apr 08, 2019

Many negotiators fall into the “trap of need.” More often than not, they confuse what they need with what they want. Sometimes it happens because they weren't prepared for the negotiation. Other times it's because they fall into a trap laid by the other side. Many times your adversary will try to label what you want as a need. They will attempt to make you think you need them and their business. They are trying to leverage your own psychology against you, your fear of loss. Who enjoys losing something they need? “It’s your contract to lose,” they might suggest. When they say this, they are trying to use prospect theory against you. You become more worried about the risk of losing something than you are about the risk of gaining something. To protect yourself from these predatory tactics, understand what you want and need.

What is a Need?

A need is something that is required for you to survive. Food, water, shelter, and oxygen are some items that fall into this category. A want is everything else. Knowing the difference between a want and need before you begin a negotiation will help you stay prepared for any traps they might try to use. Your business has wants. You want to provide the best service to the customer. You want to help people. You want to do great work. As you negotiate, to be successful, negotiate from this point of view. It helps if you understand what you want. Having a mission and purpose statement will keep you focused on your wants.

Once you’re clear on your needs and wants, you cannot be manipulated into believing your wants are needs. Needs can be very expensive for us. Don’t allow someone to define your needs. For example, let's suppose a partner comes to me and says, "Can we switch calls this weekend? I need to be somewhere." When you hear someone else use the word "need" and you have the power to fulfill that need, what goes through your mind? You will either be compassionate and give them what they say they need. Or, you might identify their stated need as something that is valuable to them and increase your price of fulfilling their need. Most of the people I’ve met in business can be compassionate, and rarely I have seen this at the negotiation table. They are driven by maximizing their financial gain. A great example of this is the price gouging we’ve seen during the hurricanes in Texas and Florida. The food and water are true needs so the seller’s felt they could jack the price up. Almost all the points you will negotiate in a contract are wants and not needs. Protect yourself by understanding your wants and needs.

How to Separate Needs from Wants

When determining a want or a need, ask yourself "Is this required for my survival?" Or "Is this required for the survival of my company?" This second question is a little harder to answer, but usually, the answer is no. You probably do not need this client to survive. You do not need the client if you cut your price below your costs to secure the contract. You would only do this if you perceived your want as a need. The best way to drive up your costs is by buying into the illusion that a want is a need.

It's okay to want something, but it's important to know and understand that you want it. Wanting something is good. It's what gets you out of bed in the morning. It is wants that spurns the economic machine in our society. People don't need iPhones, Audi's, or 65" TVs. Those are wants, desires. You also have wants as you negotiate. You should have a certain price for your goods and services. You should want to provide the customer with the best product or service possible. Those are valid wants. Be real and recognize most of what your offering is to satisfy their wants and their needs.

The next time you're dealing with a payer, remember that you probably don't need their business. You want their business, but you don't really need it. They need for you to take care of their patients. They have written contracts to provide access to the best clinics in the area. They need someone to provide good care to their customers. They need to fulfill their contractual obligations. The stronger their need, the more they are willing to pay. The stronger your need, the more you're willing to discount. Strong negotiation begins with understanding what you need and want. It will protect you from tactics the other side will use to trick you into needing when you want.

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