Recognize the Face Issue

 

Sometimes in negotiation, we are forced to deal not only with the issues on the table but also with concerns about keeping face.

One famous instance took place in the late 1990s, when John K, the Asia-Pacific regional sales manager of Lucent, mistakenly agreed to a sale price of the network monitoring system to a telecom operating company in India.  A few days later, John discovered his error. Inadvertently, he had configured and therefore calculated the system cost wrong.

The buyer refused to accept the revised price even though he did understand the unintended error. The buyer had proudly shared the attractive price with his senior management and received compliments. This was a “Face” issue for him. The buyer was strictly evaluated on the price negotiations. Nothing else mattered to him.

Once John K understood buyer’s motivation, he proposed the same price as quoted initially, but put amounts on the items surrounding the deal. For instance, the technical support team traveled from New York to Mumbai once a month to train and help the local people.  He showed that as a separate line item and put a price on that.

The buyer performance evaluation did not include the surrounding charges. He quickly agreed. The deal was done.