How to manage the dreaded “no” within a negotiation.

Q. Sometimes, despite my best efforts to understand a customer’s needs and to come up with creative options, my counterpart rejects even my best offer and decides to go with our biggest competitor. What do I do when I am faced with a firm ‘no’ after ongoing attempts to come up with a deal that will be good for both of us?
Great question. You’ve described a very common dynamic in negotiations. The challenge is what do you do now? Should you just accept the rejection and not be too disappointed, knowing you haven’t agreed to something worse for you than your best alternative to a negotiated agreement ? Or is there still scope for you to refine your options, or learn valuable lessons for future negotiations?

Best advice is never let the negotiation end with a ‘no’.

You may think the solutions you’ve suggested are the best ones to meet both of your needs, and often you will be right – but not always. It pays to check with your counterpart to find out why they’ve rejected your offer and what would it have taken to reach an agreement. Be sure to acknowledge their prerogative to walk away – if they give you a firm “no”, you want to be careful you don’t look like you refuse to take “no” for an answer. By acknowledging their right to say no, it makes it safer for them to answer your questions.

For example, you might want to ask, “Obviously we are very disappointed at not winning your business. Can you help me understand why you’ve decided to go with our competitor?” Or, “Can you help me understand what we would have needed to offer you for us to win your business?”

The answers to these questions will help you in three ways:

1. You might find out that they have key needs/concerns that either you weren’t aware of, or perhaps ones that you assumed weren’t as high priority as others. Once you have this information, you may be able to re-open negotiations and put forward new solutions to meet these needs and as a result, win their business!
2. You might find out that there was really no scope for you to create extra value without agreeing to something worse for you than your best alternative to a negotiated agreement. And in that case, you can confidently walk away from the negotiation knowing that you did everything you could to win the business. It’s important to recognise that sometimes it’s really better for both parties not to make a deal.
3. The answer will also provide you with invaluable information about your competitor’s offering which may get you thinking about your product/service and what you could do to differentiate yourself in the market.

So next time you are faced with a “no”, make sure you follow up with some good questions.

Great negotiators invest the time after the negotiations to review and reflect on the outcome and learn ways to improve for the future.