Purchasing and Negotiation Training

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Editor’s note: this is Part 5 of a 5 part series on the importance of verbal communication in negotiations.  Part I deals with open mind assumptions.  Part II deals with questioning techniques.  Part III deals with word usage while Part IV addresses common statements and Part 5 wraps up the lose ends.

These are the last three tips for better listening and speaking skills in negotiation

The major difficulty with listening skills is that ears can hear faster than mouths can speak.  The average American English speaker talks at the rate of about 125 to 150 words per minute (wpm).  We can hear and understand about 3 to 4 times more than that.  Recall the FedEx ad of the 80’s with the fellow talking about 500 wpm about “getting the package to Pittsburgh.”  When I focused intently on what he was saying, shut the lights off, and shooed the kids and dog out of the room, I could understand him, for the most part.  The point is complete attention was required. 

 So, when a speaker is talking at the average 125 wpm rate of speed, and we are not exhibiting undivided attention, what are we doing with the other three quarters of our time?  In order, here are the four responses most often received:

1. Day dreaming
2. Forming hasty decisions
3. Making mental arguments
4. Filling in with busy work 

The reason for day dreaming being most predominant stems from the practical mechanics of attention span studies.  The repeating sine wave has troughs and crests.  We are on high absorption at the crests and in deep fantasy at the crest.  It is just a fact of human nature and a factor impeding our efforts to negotiate effectively.  

Forming hasty decisions springs from our internal prejudices.  We all have them.  We tune out someone because we know want they are going to say.  “She always says that,” is one tell tale sign. 

 Mental argument simulates the “Oh, yeah” response.  Something said strikes a chord, harmonic or dissonant, and we want to respond.  If we agree, we are planning our response, just waiting for forthe opening to jump in and say, “Oh yeah, well I can top that.”  If we disagree, we may interupt in mid sentence, so angry are we with such propaganda.  “Oh, yeah, that is not so and here is why,” is a fairly typical interjection. 

 15     Establish expectations 

One of the payoffs of improving listening skills is that it trains the negotiator in establishing the expectations of the other side’s demands.  Instead of automatically assuming that we know the other side’s position, it is far better for both sides if the other side states and stakes out its position.  I was fortunate to learn much about dispute resolution in the 80’s while serving as an arbitrator.  In the 90’s, I served as a mediator in dispute resolution.  Arbitrators cannot participate in settlement talks, because they may have to impose settlement, while mediators are active advocates in settlement talks.  

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One of my first objectives in one mediation was to establish criteria.  To my amazement, the claimant had a far different positon than had been put forth in the filings alleging  extensive damages and remedies .  In our initial talks, the claimant divulged that it really did not want to pursue anything but payment of the balance of the contract.  If it was paid that balance within 15 days, it would be satisfied.  The respondent, who also claimed huge amounts of counter damages, similarly had no appetite for protracted wrangling and jumped at the chance to drive a stake through the heart of this dispute.  Claimant and respondent settled that week and continued to do business together.  Fortunately, I did not assume that what each party wanted was as stated in their claims.  As is often the case, positions are far less important than motivations. 

16     Never accept a ‘no’ from someone who cannot say ‘yes’ 

This is not as obvious a statement as it might appear.  The feint of putting light weight personnel who can only say ‘no’ in the apparent position of authority is a very effective tactic used by all many in alleged “Customer Service”.  Part of the justification for this  roadblock is that some customers cheat and will use any excuse to chisel on payment.  Sometimes, however, the motivation can be rather ignoble.  We will take this purely theoretical example to make the point.  

Suppose that you complain to your cell phone supplier about questionable time usage charges.  Your daily reading research uncovers newspaper and magazine articles about a class action suit against the phone supplier.  In testimony, the phone company has admitted ‘some overcharges’ due to delays in billing for minutes from rented signal towers that have “forced” them to “push minutes into inappropriate and undue billing periods”.  While not the customers’ fault, they are charged for exceeding their contracted monthly limit, despite the phone company’s complicity, unless the customers are alert enough to spot the mistake and savvy enough to challenge the bureaucracy.  

Suppose further that the phone company hires a collection agency to harass customers.  The collection agent only has the authority to remove outrageous late charges and not to mitigate the undue balance, or even admit that the balance is phony.  In this case, dealing with the collectors would be fruitless.   They don’t have the authority to settle the dispute for the correct amount.  You would be taking ‘no’ from someone who doesn’t have the authority to say ‘yes’.

Harry Hough, PhD, founder of the American Purchasing Society

Editor’s note: Dr. Hough is a frequent contributor to this blog.

The objective of the purchasing function is to obtain proper material and services when needed at the lowest obtainable cost. It is usually, although not always, easy to find a supplier to provide what is needed. It is somewhat more difficult to make sure that the products meet all the specifications required. Obtaining delivery when needed may be easy or difficult and is, at least in part, a function of internal planning and procedures. Getting the lowest Total Cost of Ownership is complicated because there is no way of knowing for sure that there is not a lower cost somewhere or by using some other method.

This post describes six of the proven ways of obtaining products at a relatively low cost. The proper cost of products can also be obtained by analysis of the various components of the cost, in particular labor content and the prices of raw material content. (See also post on Cost Analysis)

1. Negotiation

Discussions with a new or existing supplier may lead to a reduction in cost. Obtaining new bids helps the buyer compare present prices and terms with other suppliers and forms the basis for discussions with the present supplier. Asking for new bids from a present source who knows that competitors are also submitting quotes is often all that is needed to obtain concessions from the present supplier. Studies have shown that present suppliers become complacent about existing customers unless they are motivated to remain competitive. Today buyers who concentrate on prices are depicted by many as old fashioned. It is suggested that they are ignoring other more important cost factors. The other cost factors should never be ignored, but prices are the best general indicator of competitive suppliers.

2. Specifications

Requesters mention brand names for a product they need. Other brands may be less expensive or offer more valuable features. Engineers use brand names to avoid the need to prepare elaborate specification details, but the buyer may need to convince the engineer that other less costly brands will do a better job without adding risk of failure.

Changes in the type of material such as a steel, plastic, or chemical may reduce cost significantly if the specification does the job intended. A saving may result by loosening a tolerance of a casting without incurring any product failure or getting any less customer satisfaction. Changing packaging may reduce labor charges. The buyer must convince users, engineers, designers, and sometimes marketing people that such changes are beneficial and cost effective.

3. Inventory

Goods kept in stock add cost. Reducing the amount of inventory saves investment, saves space, and avoids deterioration and obsolescence. Buying the appropriate quantity minimizes inventory. Increasing the quantity ordered provides economies of scale to the supplier who in turn should pass on a portion in the form of quantity discounts. Any increases in quantity ordered must be compared with the cost of any need to keep additional inventory on hand. 

Handbook of Purchasing Management by Dr. Hough

 4. SourcingChanging suppliers is often a good way to obtain a cost reduction; however it has risks. The new supplier may not provide consistent quality, may not provide good service, and may end up asking for a higher price. Changing a source for a key item requires the buyer to carefully check a supplier’s references and inspect the facility.

Savings can be achieved by eliminating multiple sources for the same item. This can obtain a lower price because of the economies of scale. It reduces administrative cost by eliminating multiple transactions for purchasing and accounting. There are risks. Split sourcing provides insurance against one supplier failure. Single sourcing does not.

5. Administration

Reduced transaction cost can be achieved through computerization. Use of the Internet, procurement cards, and blanket orders all contribute to efficiency and reduced cost.

6. Terms and Conditions

Payment discounts reduce purchase costs. Other terms and conditions avoid costly legal problems and protect the company from supplier failure.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Editor’s note: this is Part 4 of a 5 part series on the importance of verbal communication in negotiations.  Part I deals with open mind assumptions.  Part II deals with questioning techniques.  Part III deals with word usage while Part V wraps up the lose ends.

11     Announcer statements

Announcer statements encompass a variety of prefatory remarks intended to condition the other side for desired effect.  Off the cuff terminology comparable to “By the way”, or “As you know” sometimes inadvertently introduce important or decoy information. 

The preface, “To be honest with you,” merits particular attention.  On its face, the phrase is ridiculous.  Is the speaker confessing dishonesty up to this point?  That is probably not the intention, but it may be the message received.  It should alert the listener that significant information probably follows. 

The use of repetition is another announcer alarm tone.  Politicians repeat for emphasis, or maybe because they expect people not to listen so they won’t notice the repetition.  Constant repetition, however, may be an indication of importance of the repeated point.  It might simply be a flaw in negotiation skills.  In any event, it bears clarification.

12     Avoid pronouns

Is anything more prone to confusion than the overuse of pronouns?  They (referring to pronouns) are just too non specific.  The pronouns ‘he’, ‘she’, ‘we’ and ‘they’ are tough enough, but ‘it’ comes in for special scrutiny.  A description that goes on for more than three sentences needs to reconfirm the identity of nouns being supplanted by pronouns.  Any more than one male in a story and the use of ‘he’ becomes troublesome.  Given that ‘it’ covers almost all creation, the pronoun problem (it, meaning the pronoun problem) cannot be overstated. 

At home, I live with a wife, two daughters and a cat, all female.  With my back to the crowd, I will hear, “did you see how she did to her?”  Huh?  Unless the house is on fire, I tune out all the static noise rather than try to unravel the pronoun references.   

 This fault of logic must be one of the most common problems for familiar parties.  If someone offers an observation, do not impute your own conclusion.  It may not coincide with theirs.  If the seller says, “We cannot sell at that price,” that is merely an observation.  To furnish our own conclusion would be erroneous.  We cannot summarily conclude that the price is too low.  It could mean their costs are too high, or that they have some other controlling factor that is not divulged.  Clarify the conclusion by asking straight away about what conclusion to draw.  If the person is challenged by direct questions, employ the reflective response and rephrase the observation.  Then, with the ‘I’ statement, ask about the conclusion.  The talk might be like this.  “So, if I understand the statement, that price is not available.  Is that right so far?”  If you hear a no, investigate with open end questions.  If the answer is yes, the test for conclusion might be, “So that I am clear, is the conclusion that the price is too low for to cover the costs?”  If the answer is yes, then switch to the Cost Analysis tool.  This process of negotiation is an interconnected set of wide ranging skills!

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13     Distinguish observation from conclusion

This fault of logic must be one of the most common problems for familiar parties.  If someone offers an observation, do not impute your own conclusion.  It may not coincide with theirs.  If the seller says, “We cannot sell at that price,” that is merely an observation.  To furnish our own conclusion would be erroneous.  We cannot summarily conclude that the price is too low.  It could mean their costs are too high, or that they have some other controlling factor that is not divulged.  Clarify the conclusion by asking straight away about what conclusion to draw.  If the person is challenged by direct questions, employ the reflective response and rephrase the observation.  Then, with the ‘I’ statement, ask about the conclusion.  The talk might be like this.  “So, if I understand the statement, that price is not available.  Is that right so far?”  If you hear a no, investigate with open end questions.  If the answer is yes, the test for conclusion might be, “So that I am clear, is the conclusion that the price is too low for to cover the costs?”  If the answer is yes, then switch to the Cost Analysis tool.  This process of negotiation is an interconnected set of wide ranging skills!

"Shorten your sales cycle & increase your win rate through competitive excellence"

Editor’s note:Stu Schlackman is a frequent contributor to this blog.

In Part I of this four part series, Stu reveals the Obective reasons that customers buy.  In Part II, he addresses Subjective reasons for customer purchases, while  Part III and Part IV detail the personality styles that drive buying decisions. 

Let’s now explore more specific responses of the first two personality styles, Blues and Oranges, to the business reasons and decision criteria we have identified.

Blues make decisions from the heart; a decision must feel right.  Blues will lean towards the subjective impacts of a solution such as: how it will impact the people in the organization, how will it affect moral, will it improve the quality of the work environment.  Blues are slow to make decisions since they solicit the input of all the team members. Then they make a decision based on group consensus.  Making sure everyone agrees on the decision can take time, during which Blues do not like to be pressured.  Blues typically are risk averse and prefer the safe solution.  Trust is paramount with a Blue decision maker, but objective criteria also influence Blues.  A Blue will place emphasis on the quality of the solution and the service.  How will the solution impact productivity (specifically people productivity)?  How will the product/purchase impact ‘customer satisfaction’ (again focusing on their team of people)? To gain commitment from a Blue, ask how they feel about moving forward. 

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Oranges make decisions from the gut; a decision must seem advantageous.  When it comes to personal purchases, Oranges are impulse buyers.  When making business purchases, Oranges are bottom line driven.  The more important criteria for the Oranges are subjective and distinctly personal.  How will they look inside the organization if they go with the decision to buy?  Will they get a promotion or bonus?  Importantly, Oranges like to do business with a person they can rely on time and time again.  Ease of doing business, convenience, and great personal service during the sales cycle are important to the Orange.  Specific objective criteria (those associated with competition) also influence Orange decisions.  How will the solution position the company in regards to the competition?  Will the solution improve customer satisfaction and market share?  Will it improve the time to market for new products?  Oranges tend to be more impatient than the other personalities since they typically juggle many balls at one time. They are quick to make decisions, and when Oranges make a decision they are decisive.  When presenting to Oranges, describe the big picture, use bullets and provide the short summary.  Oranges need to know they are getting a great deal and they can have it now!

In the last of this series, we will examine the remaining two personalities, the Greens and the Golds, and wrap it all up.

Steve Hague, author, speaker, and Certified Purchasing Manager

Editor’s note: Steve Hague is a regular contributor to this blog

When deciding what type of vehicle to purchase, you have access to hundreds of different sources of information such as: the auto manufacturers, dealers, salespeople, books, magazines, this website, other websites, periodicals, friends and family, etc.  One may love a vehicle because it is large and comfortable while you may dislike because it is a stodgy gas hog.

After calculating your budget and affordability, decide what type of vehicle you need. Do you really need an SUV or would you be happier in a sedan with rear seats that fold down for transporting large items?  Is a small car with great mileage practical for the near future if you are planning to have children soon?

With vehicle class determined, begin researching vehicles in your category using websites such as Edmunds and Kelley Blue Book. They’ll have editor and consumer reviews, safety data, and resale and pricing information. Consumer Reports also has a new car issue that they publish twice per year in April and December that is full of helpful information. 

Next, prepare a list of at least two to three vehicles that you’d like to see and test drive. Be sure to take written notes on things you like and dislike for each vehicle once you see and drive them. Don’t rely on memory alone because you will find a lot of differences in each vehicle and you don’t want to mix them up when trying to recall information. 

Let Steve save money for you

Remember that the salesperson’s comments may provide insight and helpful information but, he’s also trying to sell you HIS car so verify everything you’re told. Also, this is a good time to ask any questions you may have no matter how minor they may be. 

Once you’ve made your decision as to the make and model including options that you want, it’s time to begin visiting the dealerships in your area and start checking availability and price discussions.  Buying a new vehicle that’s already on the dealer’s lot usually will get you the best deal. If none of the dealers have the vehicle you want with the options you want though, have it ordered from the manufacturer (at no extra cost). Be prepared to wait anywhere from 4 weeks to 2 months or longer depending on what’s being ordered and from where the vehicle is being ordered. 

Take your time and be thorough when researching your next vehicle.  Making quick decisions or decisions based on looks or other people’s opinions only can be a very costly mistake that you may have to live with for a few years.

Contact Steve with your questions at Professional Auto Buying Services

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

A discussion in procurement groups on Linkedin posed this question.  “What is the major reason as to why purchasing managers are reluctant to provide feedback after a bid?” 

It generated more than 5 dozen discussion comments ranging from thoughtful and professional to knee jerk and foolish, proving, if nothing else that this question does not enjoy any single correct answer or anything near unanimous agreement.  Whether the comments spoke of bids for goods or services (see nomenclature below), the sentiments were generally the same. 

Before we delve into the answers, the goal of a post bid conference is to improve performance in the future, reduce costs, and yield better results for buyer and seller.  Do not conduct the post bid conference until after the award has been made, contract signed, and passions have cooled.  Also, do not divulge the identity of the winning supplier – the competitor likely already knows and there is little advantage to be gained in connecting suppliers with each other.

 With this as the stated goal, it is helpful to examine this question from its two poles, Reasons Why NOT to Do It and Reasons Why to DO It. 

 Reasons Why NOT to Conduct a Post Bid Conference 

1—–In general, it is a terrible idea to conduct a post bid conference if the overriding reason is to discuss pricing.  Suppliers and buyers who are disproportionably obsessed with price set themselves up for trouble.  A buying company may justifiably feel that release of price information is unethical and quite likely illegal, especially if it sets off a round of auction bids resulting in inducing or receiving a discriminatory price which is prohibited under the Robinson-Patman Act (in the case of goods).  

2—–Many organizations have prohibitions against revealing what could be sensitive information.  A zero tolerance policy has its detractors but an understandable rationale is if northing is revealed, the enterprise minimizes worry about the leak of confidential information that could embarrass or compromise a supplier or client or even instigate a lawsuit.  Conservative companies ban release of information for this reason.

3—–Some suppliers, especially incumbents, can be so distraught over the pending (or indeed actual) award to a competitor that they engage vigorously in “claw back” negotiations, to the extent that seductive offers are made with the intent to recover the wayward customer. 

Not only is this not the time for such negotiations, where were they when they could have offered these concessions while they had the business?  To entertain, or worse encourage, such negotiations would expose the buyer to potential lawsuits and certainly tell the supplier world that there is no need to bid the work, as you will conduct an auction later.  Such action leads predictably to the exodus of high quality suppliers and popularity of low value suppliers and is the direct result of the buyer’s poor behavior.

4—–Beware the supplier question, “Where do I have to be?”    Refer to the link for more details on this tell tale questions.  

As you may have surmised, there are fewer reasons to do it than not to do it.  Nevertheless, the reason in favor vastly trumps the reasons not to engage in the post bid conference.  

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 Reasons Why to Conduct a Post Bid Conference

 The only reason to engage in post bid conferences is to improve future performance and reduce the lowest Total Cost of Ownership.   Buyers and sellers will never go wrong, legally, ethically, and practically by expressing their negotiations in the language of costs.  Stick to costs – it is what commercial negotiation is all about.  Higher quality may indeed come at a higher price, but keeping all four balls of quality, service, delivery and price will always produce the best result. 

While a higher price may result in a lower TCO long term, the post bid conference must address shortcomings in delivery, service, production capacity, maybe financial standing, and other issues which raise the TCO.  If buyers develop and deploy a supplier evaluation system that includes score cards and objective “dollars and numbers” systems and includes input from stakeholders in the supply process, can point to these performance measures to help the supplier develop.

For example, if the supplier shows erratic delivery, too soon, too late, too much, too little, etc, identify what is causing these problems.  If we can identify and resolve these problems, the post bid conference has met its purpose. 

The post bid conference is also an opportunity to discuss cost reduction.  Is the supplier buying sub assembly parts that can be better purchase d and handled by us or another supplier?  There are endless possibilities with buyers and sellers who focus on cost and only one outcome for those who focus on price. 

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Nomenclature RFx 

While nothing is standard, here are some commonly used terms and intended purposes of “Requests For” ‘x’ issued by buyers. 

RFQ    Request For Quotation             commonly used for bids sought for price and delivery on goods with defined quality and service levels 

RFP     Request For Proposal                           commonly used for bids sought for services (apart from goods) and for which levels of quality, service, and delivery are either specified or subject to negotiation 

RFB    Request for Bids                                   often used in place of either RFQ or RFP 

RFI     Request for Information                        often used as a preliminary step for qualifying bidders or developing a scope of work

"Shorten your sales cycle & increase your win rate through competitive excellence"

Editor’s note: Stu Schlackman is a frequent contributor to this blog.

In Part I of a four part series, Stu reveals the Obective reasons that customers buy.  In Part II, he addresses Subjective reasons for customer purchases, while  Part III and Part IV detail the personality styles that drive buying decisions.

It’s not what people buy, but why they buy.  Your customer’s personality style is a key to understanding the buying decision.  A customer has business reasons and personal reasons to seek a new product or service.  Additionally, both objective and subjective factors are assessed as the customer decides whether to buy and frpm which seller.  By understanding how the different personality color types influence these decision criteria, you can influence the decision to buy.

Subjective reasons to buy 

There are always significant subjective, personal factors affecting the decision to buy or not, to wait or buy now.  The following situations such examples:

• Will it ease the pressure on my position and my team?
• Will I get a promotion or a bonus if it turns out well?
• Will it help employee moral?
• How will I be viewed by ‘xxx’ in making this decision?
• How will our position change in regards to our competition?
• Will it improve the quality of the work environment?

Stu's Four People You Should Know

Subjective buying-decision criteria

Cost, service, quality, capability and risk can be analyzed and assessed.  In themselves they are objective factors which can be quantified, at least to some extent.  But how a customer responds to these can be subjective. Subjective factors that affect a decision to buy, and when to buy, also include: 

• The customer’s relationship with the sales person. Whether or not trust and respect are established.  Were these effectively built through the sales process?
• How comfortable is the customer with the proposed product solution, as contrasted with how comfortable they were before the need arose?
• How authoritative is the salesperson?  Have they understood the business and personal needs of the customer?
• The customer is buying from not only the sales person but the company they represent.  What is the reputation of the company?  In popular culture is it considered one of “the good guys?”

Personality 

• Blue = Quality & Service
• Orange = Cost & Service
• Green = Capability & Quality
• Gold = Cost & Risk

Let’s explore more specific responses in Part III of the four personality styles to the business reasons and decision criteria we have identified thus far.

Editor’s note: Steve writes, speaks, and consults on customer service.

One of the most courageous tactics in the world of customer service involves a situation that is infrequent and volatile. Handling these events with a spirit of fearlessness is vital for customer service success and for long-term sanity. The nature of this service event involves customer behavior, but specifically as to how a service representative deals with customers who use vulgar language. While these situations don’t arise often – our panic button can easily be triggered if we’re not careful.

The courageous and tactical response that I suggest is designed to stun a customer. Customers who use vulgar or “dirty” language are seeking a confrontation. The customer wants to win and they expect you to lose. Service professionals understand that a win/win outcome is most desirable. How does a service professional achieve this? Perhaps a military strategy will suffice.

A noted military tactician fighting for the Confederacy during the Civil War said the simple keys to victory are, “get there first with the most” and “always do what the enemy expects least.” These same tactics are equally applicable when handling irate customers who use vulgar language.

Customers using crude or vulgar language usually do so because of their emotional state. We should tell customers who use such language, “I realize you are upset and I want to help you. But I am not in the habit of being spoken to in that fashion, nor do I speak with people who use that kind of language.” This polite statement will keep intact the self-esteem of the customer and allow the two of you to continue in your conversation.

Should the customer persist in using vulgar language, then we must stun customer and make it a point to focus on their unacceptable behavior. To prepare for this, we should sit up straight, take a deep breath, and muster our most authoritative vocal tone for what will come next. Ask the customer to repeat the last sentence that contained the vulgar language by saying, “Could you please repeat that last sentence, I am taking notes.” This statement will stun the customer. The customer will rationally think about what he just said and repeat the sentence minus the offensive speech.

This technique has served me well for years. I hope you won’t need to use this tactic too often.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Editor’s note: this is Part 2 of a 5 part series on the importance of verbal communication in negotiations.  Part I deals with open mind assumptions.  Part II deals with questioning techniques. Part III deals with word usage while Part IV addresses common statements and Part V wraps up the lose ends

4.    “What if” questions 

This technique is a reflection of the open mind because it implies flexibility, creativity, and a willingness to entertain divergent views.  It does not signal acceptance but encourages experimentation.  You might even find nuggets that you can use or did not expect to pan out.  For example, suppose that the supplier’s high quality is adding unsupportable costs to you.  You ask, “What if we were able to accept a lower quality; would you be able to supply that and what would be the impact on the price”.  The supplier might not be able to do anything, but that sales person has learned a valuable lesson about your willingness to keep an open mind and will reciprocate at its first chance.  Or, that supplier may jump on the chance to contact its sales management and engineering people for a list of alternatives.  The seller may have sufficient inventory of equally high quality material left over from a production overrun.  It is slightly off spec for our purposes, but the supplier offers to underwrite the cost of testing to see if we can use it.  If we can, they offer a 50% discount to move the inventory.  Should this exercise in open mindedness work out, both sides will have actively participated in a Win-Win strategy .  

5.    Open-end and close-end questions 

The open end question is designed to elicit information or encourage dialogue.  It calls for an informative and involved response.  The close-end question can be and should be answered with a yes or a no.  It is designed to enhance precision or weed out non-essential or even misleading information.

 Suppose you are in the market for equipment to increase productivity, reduce costs, improve safety and save on utilities.  An open end question to pose could be “Can you tell me how this equipment will help increase productivity, reduce costs, improve safety and save on utilities?”  If the sales person says “No”, throw them out.  A “Yes” answer must immediately be followed by detailed explanations in response to your inquiry.  The open end question will occur more often in the exploratory stage, before the territory narrows. 

As that territory narrows, the close ended question comes to the fore.  Precision is gained by asking tightly defined yes or no questions.  “Does the unit qualify as US made the ‘Buy American” clause?” is a close end question requiring a clear, unequivocal response.  The close end question also clarifies details and pins down people you think might not be acting entirely candid with you.  For instance, assume that you ask, “Can we have this unit in our Chicago facility in 90 days from today?”   If the answer is, “Well, we can ship it 10 weeks after receipt of order and down payment,” we have work to do.  Remind the respondent that the answer calls for a yes or a no.  In either case, we have made progress.  If no, and under no conditions, we will need to look at extending our deadline or at other alternatives.  If yes, we can then get more finite with the specifics to make that delivery date happen.   

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6. ‘I’ and ‘You’ re-statements    

Everyone has heard the country expression that, “It ain’t what you said; it’s just how you said it.”  Contained ironically in the adage is a demonstration of the ‘you’ statement.  Consider these two statements of equivalent message.  First, take the ‘I’ statement.  “As I understand what I think you said, thus and so would be preferable to you.  Do I have that right?”

The statement accounts for the possibility that we misunderstood, did not fully appreciate, or otherwise failed to recognize all the significant data under transfer.  This tacit admission by us conveys the notion that it is important to us that we understand the sender’s communication, its issues and motivations so that we can deal with it.  This is what the social scientist call empathy and that is a good quality in negotiators.  We expressed no agreement nor disagreement, or even much positive or negative emotion.  Rather, we proffered a down the middle statement of fact and asked for affirmation of meaning.  

Contrast that with this imperious alternative ‘you’ statement.  “You mean to tell me that you want thus and so.”  Imagine this being said with the accompanying finger pointing as well.  Clearly, the ‘you’ statement let’s fly an accusation and invites retaliation.  The ‘you’ statement needlessly inflames the conflict that negotiation is intended to resolve.  Our motives may be pure, our intent only to ensure that we understood, but our words of communication derailed our good intentions.  In general, substitute the ‘I’ for the ‘you’ statement often.