Practical Negotiating: Tools, Tactics & Techniques

Currencies of Exchange

Because negotiation is a process of exchange, the give-and-take of currencies is essential to negotiating. We define currencies as tangible or intangible resources that are perceived to have value by the receiving party.

Simple transactions involve the exchange of a single currency for a good or service to meet our needs. We exchange currencies every day; in most cases, we do so with the most familiar currency—money. When we broaden the scope from just the single currency to involve other currencies, we are then negotiating.

Currency Exchange in Action A customer decides to purchase a new refrigerator, finds the one he wants on sale, and is prepared to pay by credit card. The manufacturer’s warranty is standard; yet, the salesperson recommends purchasing an extended service plan (ESP) for five years at a cost of 10 percent of the initial purchase price. There is also an icemaker kit for $20, and the delivery and setup costs are $60. With all of these currencies on the table, the customer offers to: Pay by cash or check versus credit card (saving the merchant 3 to 6 percent depending on the card). Pay for the ESP if the store will send a service tech to his home. Get the icemaker kit and delivery/set-up cost for free. The salesperson accepts the proposal and places the order.

Once the other currencies (i.e., cash, ESP, accessories, and delivery) are in play, the parties are negotiating. If both parties are haggling over the price alone, it is bargaining, not ...