Tag Archives: money

Is now the time to barter?

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The crazy COVID situation has taught us many important lessons about negotiation—lessons that should make life negotiable whenever it returns to normal.

But COVID also holds at least one negotiation lesson that can make life negotiable now—one that, taken seriously and implemented immediately, could help us navigate this increasingly trying time: the power of bartering (trading the goods and services we have for the goods and service we need).

Immersed in a monetary economy, many of us scarcely consider bartering. When we need some toilet paper or flour, we pay some money to get them. When someone needs our labor or something else we have or produce, they hopefully pay us. So ingrained is the monetary approach to need satisfaction that even COVID is unlikely to change it soon.

Still, the following five features of the COVID situation do render the monetary approach marginally less relevant and bartering much more powerful than they were mere months ago. Now might be a good time to barter because:

  1. Money is scarce: As industries dry up, layoffs set in, and salaries get slashed, many of us will find ourselves with fewer greenbacks in our wallets and bank accounts. So we will obviously need to supply the parties who can meet our needs with something else of value. The goods and services we have, when bartered, offer an alternative means of exchange.
  2. Time is plentiful: Just as our bank accounts go empty, so do our calendars. Bereft of at least a few long commutes, unnecessary meetings, and social activities, many of us have at least a little more time on our hands. Whereas the absence of money is a liability, however, the absence of commitments is an asset, as it provides us with the additional free-time to put our diverse talents—from baking, to video-editing, to Etsy selling—to potentially marketable use.
  3. It fits with family and community: As most of us spend much more time with our families and communities—and much less in a physical workplace—we need negotiation strategies suited to the setting. Our family members might be offended if we offered to sell them our bread; our neighbors might resent if we offered to rent their garden tools. But anthropological research as well as common sense suggest the bartering is more relational and thus more appropriate as a means of negotiating with family and friends. Fewer family members might get offended if we asked them to teach us video-editing after we shared our bread; fewer neighbors might resent our borrowing their tools if we emphasized they could borrow ours later. Oh, and since it’s more relational and less contentious, bartering may even offer a needed source of social connection.
  4. Everything’s under- or over-supplied: As we all know, many traditional sources of TP, PPE, flour, and the like (i.e., stores) have become unreliable. Conversely, those of us who stocked ourselves up may find our shelves overflowing with reams of TP (or whatever else). In that world, where money-accepting stores are unreliable and friendly neighbors with TP deficiencies are cropping up everywhere, bartering may offer an alternative way of matching supply to demand.
  5. It’s a better mindset for negotiation: Even if we weren’t living in a world with unreliable stores and widespread TP deficiencies, and even if we weren’t negotiating with friends and family instead of business partners, negotiators of all stripes may perform better when they treat their task as a bartering trade rather than a monetary transaction—even when their task involves money. Indeed, that’s the whole point of my book, The Bartering Mindset. So trying out bartering can make us a better negotiator now, and we might as well use our newfound free-time to give it a try.

In sum, for all the horrible aspects of the COVID situation, it holds some important and potentially helpful lessons about negotiation, few more urgent than the power of bartering. Happy trades to you!

Negotiating Better by Negotiating like a Barterer

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On a recent wintry weekend, for the lack of a better option, my daughters and I visited “Ridley’s Accept it or Else.” Our excitement over this museum of the odd must’ve been obvious, as the receptionist immediately offered a three-attraction combo ticket.

“And what does that include?” I inquired.

“All our weird and wacky attractions,” she said, “along with the marvelous house of mirrors and the exhilarating 4-D motion theater.”

“Are all those appropriate for a six- and three-year-old?” I probed.

“Oh yes, there’s nothing scary here.”

I should’ve known better. But on this, our first visit to Ridley’s, I wanted to show my ragamuffins a good time. So I bought it.

And I’ll admit it: We lapped up their weird and wacky attractions. From locks of Lincoln’s hair, to a shrunken head, to a T-Rex made of pop tart wrappers, we relished some of the world’s oddest oddities.

But then came the marvelous house of mirrors. A pitch-black maze of mirrors from which several world-renowned explorers have never escaped, it wasn’t so marvelous for my three-year-old. It propelled her into a state of abject fear.

And so, when we somehow escaped and approached the exhilarating 4-D motion theater, she wouldn’t even consider it. Nor could I blame her given the signs about sudden movements and sharp drops.

Appropriate for a six- and a three-year-old? The former maybe, the latter absolutely not.

In sum, none of us really enjoyed the mirrors, and none of us even tried the theater. So I was irritated and wanted money back. And my daughters’ impending hunger and extreme fatigue made me want it now.

Operating under the visceral influences of irritation, hunger, and fatigue, I must admit I adopted a negotiation style that my book explicitly criticizes: the monetary mindset. Specifically, I marched up to the receptionist, told her what I thought of her sales tactics, and demanded some money back. In so doing, I was treating this negotiation like a monetary transaction, making the unproductive assumptions that:

  • I wanted just one thing (a big rebate)
  • I was negotiating with just one person (the receptionist)
  • She wanted just the opposite (no rebate)
  • For me to win, she’d have to lose
  • Or else we’d have to compromise

“Let me call my supervisor,” said the receptionist, followed shortly after the call by, “We can’t give you any money back.”

Most people’s story stops right there. They adopt the monetary mindset, fight over a fixed pie, and march out of Ridley’s with little or nothing but frustration to show for it.

To the receptionist’s extreme credit, though, she attached another statement to the last: “But we can offer you our latest book on Ridley’s oddest oddities.”

Now, I doubt the receptionist was thinking quite so strategically, but this statement epitomizes the approach my own book actually recommends: the bartering mindset. In offering the Ridley’s book, she was treating this negotiation like bartering trade, making the much more productive assumptions that:

  • She wanted and could offer several things (e.g., my future business and the book, respectively)
  • She was negotiating with several people (my souvenir-hungry daughters in addition to myself)
  • I wanted and could offer several things too (e.g., to satisfy my daughters and visit Ridley’s again, respectively)
  • For her to succeed, I’d have to feel like a winner too
  • Which we could achieve by exchanging the book for no hard feelings about the initial scam

In sum, the receptionist compensated for her earlier sketchiness by adopting a highly productive negotiation strategy that treated the situation like bartering trade, i.e., by assuming the bartering mindset. Awakened from the visceral influences of irritation, hunger, and fatigue by her sophisticated response, I shed my own unproductive monetary mindset, accepted the book gratefully, and publicly promised my daughters to return to Ridley’s soon. And don’t think they’ll forget it.

Just a funny story to introduce my new book, The Bartering Mindset, which will help you grapple with many of life’s challenges—including the substantially more serious. I hope you’ll join me in learning to negotiate like a barterer.

Smash through the standoff! Introducing issues to unproductive negotiations

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At some point, many negotiations spiral into an unproductive standoff over money—an issue over which the negotiators tend to utterly disagree. Most often, such standoffs end with an escalation of conflict or proliferation of concessions, neither of which is particularly productive. But, as I teach in my negotiation classes, there’s third way that can make life negotiable: adding another issue to the table.

“So what types of issues should we add?” asked a participant named Stuart Merkel in one of my recent executive education courses? “Is there a set of categories—a list of topics to consider adding to the table?” And I must admit that I was hard-pressed to provide a reasonable answer. I had no choice but to scratch my head and say no, to the best of my knowledge.

So why not take this post as an opportunity to detail the most common categories of issues that negotiators add to the table—new topics that can smash through the standoff and make everyone happier? Drawing from negotiation research and my observation of innumerable students negotiating, I’d propose the following top-ten list of issues to consider introducing, should you find yourself in a standoff:

  1. Time: How quickly will the agreement be executed?
  2. Quality: At what level of quality?
  3. Performance incentives: Will the seller get a bonus for completing the work / delivering the product early or excellently? Or a penalty for completing it tardily or poorly?
  4. Responsibilities: Which part of the agreement will each party be responsible for executing?
  5. Payment terms: How quickly, at what level of interest, and in what form will the buyer issue payments?
  6. Add-ons: What additional services or products will the seller bundle with the main commodity?
  7. Future business: After the current agreement, will either party consider or commit to engaging with the other?
  8. Future events and contingencies: How will the parties adjust for future events, foreseen or otherwise?
  9. Warranties: Will the seller guarantee the quality of the product or service, and for what period of time?
  10. Returns: Under what conditions will the buyer be able to change their mind?

So thanks, Stu, for the great idea—an idea that inspired a post that will hopefully help people break through the standoffs they’ll inevitably encounter eventually.