Monthly Archives: May 2020

How big companies negotiate—in aggregate

Posted on by
Reply

Many of us find now ourselves negotiating with big companies—to extend our promotional rates, cancel our service before the contract ends, miss a payment or two. Desperate times call for desperate measures.

Given that reality, I wanted to share a consideration—discouraging at first but encouraging upon consideration—that can make such conversations negotiable: Many (though not all) big companies don’t really give a hoot about our individual situations.

Touching as their recent commercials might be, they aren’t particularly sensitive to our unique challenges, empathetic to our personal struggles.

Discouraging, right? Well, yes, unless and until you realize the flip-side: what they do care about. Much as your personal story might not concern them much, big companies do care about the reactions of many customers, in aggregate. That is, they think of negotiations in aggregate rather than individual terms.

That realization holds some important implications for the way you, as an individual, negotiate with them. Here are just three:

  1. Strategic social media: Adverse postings on social media have a way of multiplying and morphing into aggregate dissatisfaction. If you’ve received dissatisfactory service and can precede your call with a powerful tweet, preferably with pictures—or promise to do so later—the company just might give you a hearing. And if you can also show you’re an influencer of some sort, well, then, they might grant you the full judge and jury.
  2. Judicious threats: Since they don’t really care about your individual situation, they won’t closely listen when you explain why that situation necessitates a rate cut, deferred payment, etc. (as many of us do). But they’ll become all ears when you credibly threaten to cancel and ask to be transferred to that department. Why? Well, one reason is that cancellations actually hurt in the aggregate, whereas sob stories don’t. Unwise in many other negotiation contexts, threats may unfortunately be necessary in some negotiations with big companies.
  3. Unrelenting communication: If there’s anything other than mass-cancellation that troubles companies in aggregate, it’s mass inquiry—huge wait times on their customer service lines, mountains of paperwork coming in, lots of complicated and unresolved case numbers. For you, the individual negotiator (in concert with many other individual negotiators), this implies the need to be persistent and unrelenting in your communications—willing to endure excruciating wait times, to insist on talking to their supervisor’s supervisor’s supervisor, to send in mountains of paperwork yourself, to call back as often as necessary. If you do that (and others do too), they may see the aggregate implications of continuing to put off the persistent (like you)—gridlock. (Case in point: Many travel firms like Hotwire and Hotels.com did when everyone called at the start of COVID, and they gave everybody a refund.)

So the realization that many (though not all) companies don’t really care about us as individuals has an ironic upside: They actually do care—about us and many other people in aggregate. If you can show them how your individual case relates to their aggregate concerns, well, then big companies become just about as caring as anyone else.

Ok, so you want to barter—but how?

Posted on by
Reply

My last post sought convince you that now—in the midst of the COVID crisis—is precisely the time to barter. In brief, the point was that many people now have little choice but to barter, that barter is a better way of negotiating with family and friends, and that barter can help us both deal with short-term shortages and become better negotiators in the long-term. In short, bartering can make life negotiable.

But this all begs an obvious question: How? That is, how to barter effectively? So in this post, let me introduce a critical feature of bartering—the double coincidence of wants—along with three critical implications for bartering better.

As noted in my last post, bartering involves trading whatever you have for whatever you want. For a direct trade to happen, however, you have to meet one very specific condition: You have to want exactly what another person has and have exactly what another person wants—a condition known as the double coincidence of wants. As implied by the name, it can be challenging to the point of utterly coincidental to find a person and trade that satisfy that condition.

But a little reflection on the double coincidence reveals at least three ways to make it less coincidental and more attainable—principles that anyone who barters routinely knows well (and anyone who seeks to negotiate effectively should too, as described below):

  1. Understand yourself holistically: The first step in satisfying the double coincidence is understanding your own side of the coincidence holistically—that is, identifying not just what you want from a bartering trade but also what you’re offering. Say you desperately need some flour for bread: That’s great, but no one’s going to give it to you if you can’t clearly articulate what you’re offering in return. And, while you’re at it, you might as well identify some other things you need—just in case they’re short on flour but happen to have some coveted toilet paper, for example.
  2. Discuss multiple issues: It’s little use identifying your need for flour and TP—or your willingness to offer papier-mâché dolls and mow their lawn—if you’re not willing to raise all these issues in the discussion. And even if you do, it’s little use unless you prompt them to do the same, to talk about whatever it is they need and can offer. Talking about all kinds of things might seem random and scattered; at first, maybe they’ll look at you funny when you mention TP and papier-mâché in the same sentence. But a seemingly random discussion of multiple needs and offerings is often the only way of satisfying the double coincidence.
  3. Seek out multiple partners: Sadly, the first person you approach may not have any flour or TP on-hand; or maybe they do but have no interest in your papier-mâché or lawn-mowing. But by approaching several people, time-consuming as it is, the double coincidence becomes substantially less coincidental. Surely someone with some flour needs some beautiful papier-mâché! Barterers know that theirs is a multiparty endeavor.

These principles, among others, will help you barter better. As described in my book, however, that’s not all! They’ll also help you negotiate better—even when you’re negotiating over money. Indeed, no negotiator can truly excel without understanding themselves holistically, discussing multiple issues, and talking to multiple counterparts. So now’s the time to barter, both for its own sake and for the benefit of your future negotiations. Hopefully these tricks of the “trade” can help you.