Putting your best foot forward at the bargaining table
Story by MAX REID
If there is one thing that bodyshop managers and the parents of young children have in common, it is the knowledge that every conversation is actually a negotiation. Parents know all too well that building consistency in these negotiations is an uphill battle—try as you might to establish routines, but kids will still somehow claim to have forgotten how to tie their shoes when you know they did it yesterday.
Someone may do you a favour one day and turn you down the next, and it is important to know how your method of interaction with industry partners, down to the smallest minutia, can affect the success of your negotiations. Collision Repair recently ran a survey in our e-zine newsletter, asking industry members to report the average success of their negotiations with the various competing interests of the repair market, like insurers, parts suppliers, dealers and towers. Based on the results, it would seem that the perceived success of our industry peers in negotiations is about as mixed as their feelings of trust for those they negotiate with.
Many managers in our industry appear fairly confident in their negotiating skills, with more than three quarters of respondents reporting an average success rate of more than 60 percent. Where things get sticky, however, is in the fact that more than a quarter (27.3 percent) consider many of these conversations to border on extortion, rating the level of good faith present in these negotiations at a one out of five. This state of flip-of-a-coin successes in the face of what often are perceived to be—at best, one-sided deals, and at worst, blatant insults to the value of skilled labour—is not a healthy way to operate.
Luckily, our industry is ripe with actionable advice on not just how to approach your business dealings with goals and numbers in mind—but how to actually build the trust and good faith that will ultimately see the customers of both parties impressed by the partnership they have working for them. Kristen Felder, CEO of Collision Hub and all-around collision industry expert, has spoken at length over the years on the topic of negotiations.
Felder’s method is built largely around the completion of small individual goals that build up over time, avoiding what she considers to be the most common negotiation pitfall stumbled into by managers. “Don’t lose part because you are going for the whole,” she said in a 2020 webinar.
“Know when to plant the flag and end the day. Don’t get so caught up in the end game that you forget to claim the progress that you have.” Touching again on the tactics that will build consistency, Felder as well as many other experts on the topic will say that a visible level of humility is crucial to leaving the other party with a positive impression of you once the day’s discussions are over. She cited the example of ex-U.S. president Jimmy Carter’s 2002 Nobel Peace Prize report on the perception of losses and gains. In that report, Carter put forth that the overall emotional impact of taking $5 from someone is often greater than had they been given $10. In short, as Felder said in that webinar, “We feel loss at a much higher rate than we feel gains.”
Therefore, it is often beneficial to let your wins appear humble in comparison to the other party; let them feel as though they got the big win for the day and they are far less likely to feel like anyone was taken advantage of.
From there, both parties can even earn some extra points with the customer, making sure to mention that both the repairer and their insurance company have been communicating regularly on their repair and that their interests are being actively discussed. As has perhaps been made clear at this point, the outcome of business negotiations can often be determined within the first five minutes of an introductory meeting, whether either party even realizes it.
It may seem somewhat backwards, but research has found that simply coming into a meeting with your goals set even just slightly too high could jeopardize the future of that business relationship.
Studies conducted by Harvard University’s Program on Negotiation (PON) have found that the gesture of shooting for the stars is a sure-fire way to rub the other person the wrong way, despite the initial successes you might achieve.
“Abundant research supports the immediate benefits of aiming high in negotiation. But, as we discuss here, challenging goals may negatively affect the relationships that spring from negotiated deals,” according to a report from PON.
The unfortunate truth is that if you shoot high, and especially if you shoot high and succeed, your counterparts will begin to resent your success. There are simple steps that every collision manager can take to negotiate in a manner that feels reciprocal and honest.
For example, if you are fairly confident the other party will agree to help you meet your goal, don’t try and just speed through the meeting and close the deal—that is a recipe for making the other person feel like they were just robbed, research shows. “A counterpart’s quick acceptance of an offer can cause a negotiator to regret that she didn’t ask for more,” Adam D. Galinsky of Columbia University and his colleagues have found in their research.
“For this reason, even if the other side quickly acquiesces to your high goals, try to prolong the negotiation a bit to improve her overall satisfaction,” according to the PON report.
This is where another aspect of Felder’s method can come into play. She recommends, as do many others with expertise in this field, that managers verbally act out their negotiations in advance.
Sure, maybe it sounds silly to ask your estimator to roleplay with you in your office, but actually putting voice to what you are asking of your fellow business professionals is a highly effective way of weeding out language or tactics that may turn off the other party. Felder says this creates “an auditory memory of the negotiation” that both helps you plan for every potential response, but also avoid the more subtle negotiation faux pas that even the most well-meaning operator could stumble into.
Additionally, if you foresee a particular negotiation meeting being tense and emotions are likely to flair, Felder wrote in her book, The Art of Persuasion, that “preparation is a great controller of emotions.”
Felder’s book is an invaluable reference guide for collision managers and is currently available for free in PDF form on Collision Hub’s website.
When it all comes down to it, however, there is no one-size-fits-all script for managers to follow that will win them every encounter at the bargaining table.
Negotiation requires a personal touch that only you have with your respective industry partners, and it is ultimately up to shop owners to do their part in approaching these discussions with good faith and the customer at the frontof- mind.
If the other party does not appear to have their properties aligned in this way, don’t be afraid to remind them who we are all working for.
As Felder said in that 2020 webinar on negotiations, “You will always be a weak negotiator if your customer is not your biggest supporter.”
