The Power of Successful Negotiation
Which outcome would be worse for a CPA practice: not attaining a new client or attaining a new client who takes more of the firm’s service than they pay for? A negotiation strategy that supports building a healthy and prosperous practice is not included in the CPA curriculum. But it’s not too late to learn. Taking a look at the book, Never Split the Difference by Chris Voss and Tahl Raz, will start practitioners on the path to becoming successful negotiators.
Define the Goal
As the book explains, a successful negotiator protects the integrity of their work product while establishing an advisory role with the client. First, one must clearly define the goal they want to achieve — be assured that the client does. Once the goal is defined, negotiation tools can help support achieving that goal.
Identify Negotiation Styles
The next step in a client negotiation process is to know thyself. Three types of negotiation styles exist: analyst, accommodator and assertive.
- Analysts (reserved problem solvers) view themselves as realistic, prepared and smart and can seem standoffish to others.
- Accommodators (relationship builders) view themselves as personable, and others see them the same way.
- Assertives (winning and doing) view themselves as honest, logical and direct, and others get the impression they are aggressive, emotional and harsh.
Knowing one’s style and the counter-party’s increases the likelihood of successful negotiation by reducing barriers that conflicting styles generate.
Most business people are assertive, and most CPAs are analysts; this combination is perhaps the worst match for a negotiation. Since the client will be unlikely to change their style, the CPA should change theirs in the interest of success. By shifting to an accommodator style and focusing on the client’s specific needs, the CPA can control the negotiation.
Develop Listening Techniques
Knowing thyself helps, but knowing the client augments one’s effectiveness. The keys to a powerful negotiation are to listen, listen and listen — and have a second pair of ears available. A colleague listening without an active role has the freedom to notice cues the CPA may miss during the negotiation. A nonverbal communication system should be established between the CPA and his or her colleague to alert the CPA to essential cues. Those cues can" be used to guide the negotiation process.
Two very effective active listening techniques for negotiation are “labels” and “mirroring,” which both require active listening.
- Labeling validates the counterparty’s emotions while guaranteeing that the parties are discussing the same idea or topic. Use phrases like, “It seems like ___” or “It sounds like ___” to capture and reinforce the essence of the counterparty’s statements.
- Mirroring, which is the act of repeating the last three words the counterparty used, combined with labeling, creates rapport with the client while solidifying trust.
The final important step is to prepare and practice to navigate the negotiation process successfully. If one’s negotiation technique appears scripted or there is hesitation when dealing with objective questions, the entire process loses dynamic momentum created by placing tension on the client.
People actively avoid or attempt to relieve tension. The dynamic nature of negotiating forces you to become comfortable with tension while actively diverting the tension back on the client. A typical example is a client offering to pay 50 percent of the CPA’s standard hourly rate. The correct course of action is for the CPA to say no and add an extreme anchor. Extreme anchoring sets the value well above where the CPA would settle, making the number he or she hopes to achieve appear more reasonable to the client. However, if the shift in tension catches the CPA unprepared, he or she might say “ok” or split the difference, which, as the title of Voss and Taz’s book states, should never be done.
Negotiation is a process most people encounter every day of their lives. Whether negotiating with spouses, children or clients, understanding the dynamic interactions that transpire increases the likelihood of optimal resolution between counterparties. Reading Voss and Taz’s book is an excellent first step in exploring the negotiation techniques available and maximizing one’s effectiveness in the process.