Establishing common interests

1. We have a lot of common ground.

2. There are definitely many areas where our interests are aligned.

3. There is great potential for synergy between our two businesses.

4. Our needs in this area complementary, don’t you think?

Online Activities – Flash Quizzes

(click above to open)

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Online Activities:

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BEP 404 – Getting Started

This is part of an ongoing series on negotiations. In this episode, we’ll study how

to open a traditional commercial negotiation between buyer and seller. We’ll

focus on creating goodwill, starting off, setting ground rules, suggesting an

agenda and exploring possibilities.

We’ll be listening to a telephone conversation between

Tony, a supplier of building materials, and Paul, a

purchasing manager for a large construction company.

Paul is buying materials for a harbor project. A harbor is a

protected area of water where boats dock, or park. For

this project, Paul needs to buy anchor bolts. These bolts

are the thick steel screws that are embedded or buried in

concrete to support or anchor structural steel columns.

Structural columns refer to the steel frameworks that hold

buildings up.

This is the first time Tony and Paul have talked on the

phone. As you listen, pay attention to the language they

use to get the negotiation started, and try to answer the

following questions.

Listening Questions

1) How does Tony begin the phone call to establish goodwill?

2) How long does Paul say he has available for the phone call?

3) Paul asks Tony how he will be using the bolts. How does Tony respond?

4) What other option does Paul want to explore with Tony?

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Successful Negotiations

Vocabulary

Anchor bolts: Large screws that are used to support and connect structural steel

columns that are embedded within concrete to give buildings strength. “Using

high-quality anchor bolts is essential to making a building earthquake proof.”

Harbor project: A harbor is an area used to dock or park boats. In the dialog, a

“harbor project” is a construction project near or in a harbor.

Personally: Can be used at the beginning of a sentence to mean, “speaking for

myself.” “Personally, I think that the project is a bad idea, but others may have

other opinions.”

Stainless (steel): Steel mixed with chromium to make it resistant to rust

(turning red) when exposed to the elements, i.e., exposed to air and water.

“Only highest-quality stainless steel is used in surgical instruments.”

High-strength: Strong. “We need high-strength rebar for this project because of

the large size of the building.”

Ksi: Unit of measure for material strength. Short for “kilopounds per square

inch.” Refers to the amount of pressure or stress a material can withstand

before breaking.

Grade 105: Refers to steel that can withstand 105 ksi.

Structural steel columns: Support structures made of steel that are embedded,

or buried, inside concrete to make buildings strong. “Structural steel columns

are used to support large buildings.”

To explore an option: To discuss a possibility. “We’d love to have the opportunity

to explore options for cooperation with your company.”

Resin-coated: Covered with a thin clear layer of protective substance, like glue.

“Resin-coated steel is much more resistant to air and water than traditional

steel.”

To stick with sth. To continue doing sth., even in the face of resistance. “I’m

going to stick with the approach I’m using, even though most of you don’t

agree.”

Treated (steel): Refers to steel which has been through a process to change its

properties. Treatments include heating or adding chemical elements. For

example, heat treatments strength steel; meanwhile, chromium-treated steel is

commonly called “stainless steel.” “We’d prefer to use treated steel in this

project because of the very special challenges posed by the harbor

environment.”

Rebar: Rebar means “reinforcing bar.” Steel rebar forms the framework within

concrete columns that anchor bolts are used to connect and support. “In wet

environments, rebar rusts easily, so I suggest using stainless for this project.”

Exclusivity / exclusive rights: The rights to be the sole agent or seller of a

product within a certain market. “They are our exclusive agent in the Philippines;

so if we find a product there that was not sold by them, we won’t service it.”

To embed sth. in sth.: To bury sth in sth. “Structural steel columns are

embedded in concrete to give buildings strength.”

Concrete: A mixture of cement (a binding material), substances such as sand or

gravel, and water. When it dries, it hardens. “Most modern buildings, bridges,

and many other man-made structures are made from concrete.”

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Dialog

Tony: First of all let me thank you for your time, Paul.

Paul: Not at all. Thanks for calling.

Tony: So I understand that you’re interested in buying some anchor bolts?

Paul: That’s right. We’re working on a harbor project, so we need stainless.

Tony: I thought we could start by discussing your needs in more detail, then go

on to details of price, delivery and so on.

Paul: Fine by me. Personally, I’ve only got about a half hour available.

Tony: Should be plenty.

Paul: Okay.

Tony: So if I understand correctly, you are looking for standard 7/8th inch high-

strength anchor bolts, 105 ksi.

Paul: Yes, grade 105 on this project.

Tony: Could you tell us more about how you will be using them? In structural

steel columns, I assume?

Paul: That’s right.

Tony: There’s another option you might want to explore. Have you

considered resin-coated?

Paul: We thought about that, but we’re using treated rebar, so we’re just

going to stick with the same material for the bolts.

Tony: Okay… Well, you’ve seen our price list… How many are you considering

ordering?

Paul: Yes, well, what kind of discount could you give us on a large order…?

Tony: That depends… how many are we talking about?

© 2009 All rights reserved: www.business english pod.com 39

Successful Negotiations

Debrief

Tony and Paul have started off the negotiation successfully and are now ready to

proceed to the bargaining stage. Let’s examine the language they used to begin

their discussion.

To start off, Tony, the supplier, demonstrates goodwill to Paul by thanking him

for his time:

Tony: First of all let me thank you for your time, Paul.

Paul: Not at all. Thanks for calling.

What are some other phrases we can use to establish goodwill at the beginning

of a negotiation?

 I feel sure that you share our desire to find a solution.

 We are committed to being your partner in developing long-term, mutual

value.

 We are dedicated to building a lasting relationship.

 We really look forward to working with you.

Next, Tony starts off the discussion by introducing his reason for calling. Let’s

take a closer look at how he does this.

Tony: So I understand that you’re interested in buying some anchor bolts?

Paul: That’s right. We’re working on a harbor project, so we need stainless.

“So I understand…” is a great way to turn the topic to business. So signals that

you are changing the topic. Here, “I understand” means I have heard or I have

learnt.

What does Paul mean by “stainless?” This refers to stainless steel, which is steel

mixed or treated with a chemical element – chromium – to keep it from rusting,

or turning red, when it is exposed to air and water. Because Paul’s construction

project is in a harbor, the buildings are surrounded by water and probably salt.

So it’s important that the anchor bolts resist rust to last a long time.

“I understand…” is a way of starting off. Let’s listen to some more language that

is useful for this purpose.

 May I begin by saying that we have looked at your quotation very closely.

 First of all, let me give you some background on our proposal.

 We understand that you are looking for a solution to this problem.

After Tony has started off the discussion, how does he continue?

Tony: I thought we could start by discussing your needs in more detail, then go

on to details of price, delivery and so on.

Here Tony suggests an agenda for the meeting. To be polite, he uses the past

tense, “I thought we could start…” In other words, he was thinking this was a

good idea for the agenda, but if Paul has another idea, that’s okay.

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Recommending an agenda makes discussions more efficient. What are some

other ways to do this?

 We have three main issues we’d like to discuss with you today.

 I was thinking we could start by discussing the details of the order, then

moving on to price.

Does Paul agree to Tony’s agenda? Yes, but he has a suggestion of his own.

Paul: Fine by me. Personally, I’ve only got about a half hour available.

Tony: Should be plenty.

Paul: Okay.

“Fine by me” expresses agreement with Tony’s agenda. But Paul wants to be

clear to Tony that his time is limited – he only has a “half hour,” or thirty

minutes. To be polite, he uses personally – “Personally, I’ve only got a half hour

available.” This means, “speaking for myself, I have only 30 minutes; but I

understand your time may be limited as well.”

Mentioning time limits is part of setting ground rules; that is, creating guidelines

for the talks. What are some other ground rules that we may need to set?

 Before we go on, could we agree on procedure?

 Why don’t we break after an hour for lunch?

 Please feel free to interrupt me at any time if you have any questions.

What happens next? Tony takes the important step of clarifying Paul’s needs:

Tony: So if I understand correctly, you are looking for standard 7/8th inch high-

strength anchor bolts, 105 ksi.

Paul: Yes, grade 105 on this project.

From their previous emails, Tony knows Paul’s requirements, but he clarifies

them here to confirm. To do this, he uses the expression, “So, if I understand

correctly…”

What exactly does Paul need? “Seven-eighths of an inch” refers to the diameter,

or width, of the bolt. Ksi is a unit of measurement. It stands for “ kilo pounds

(1000 pounds) per square inch.” This is used to measure the strength of

materials – for example, how much weight they can bear before breaking. Bolts

that can take 105 ksi are referred to as “grade 105.”

Clarifying is an extremely important part of negotiation. Before we go on, let’s

review some more useful expressions:

 What exactly do you mean by that?

 If I understand correctly, you’re saying that production costs will be much

higher than expected.

 Right. So I think what you’re saying is you are not prepared to offer a higher

discount unless we increase our order, is that right?

 Can you perhaps go into a little more detail on that?

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Successful Negotiations

 Before we discuss this point, I’d like to be sure about your position on

exclusivity.

In the last example phrase, exclusivity refers to the right to be the only agent or

seller of an item in a market. This is sometimes called having exclusive rights.

After clarifying the basic order, Tony now questions Paul in more detail:

Tony: Could you tell us more about how you will be using them? In structural

steel columns, I assume?

Paul: That’s right.

Asking deeper questions to get information is called probing. This is another

fundamental skill of negotiations: Understanding the other party enables us to

find better ways to create value.

As mentioned in the introduction, structural steel columns are steel frameworks

embedded or buried in concrete. Their purpose is to strengthen buildings.

Tony’s phrase – “Could you tell us more…” – is one useful way of probing. What

are some other expressions?

 Could you tell us more about your product’s special features?

 Could you go into more detail about your standard delivery terms?

 What kind of special offers do you have?

 Wouldn’t it be possible to ship the goods through South Africa?

 Have you got an example of this?

 I can’t see how your position ties up with the rising raw material prices.

How do Tony and Paul continue? Tony uses the information he has collected to

suggest another possibility to Paul:

Tony: There’s another option you might want to explore. Have you

considered resin-coated?

Tony wants to know whether or not Paul has considered using resin-coated bolts

instead of stainless. Resin is a clear coating or layer that protects the steel. Tony

says, “There’s another option you might want to explore….”

Exploring different possibilities for creating value is another key negotiation skill.

Here are some more phrases that can help us do this:

 I would like to explore a number of options with you.

 There are a number of ways to look at this.

 I think there are a number of possibilities we’d suggest looking at.

 I’m sure we can find some common ground.

Does Paul agree to Tony’s proposal to use resin-coated bolts? No, he says they

are already using treated, or stainless, rebar, so they want to stick with, or

continue using, the same material for the bolts (rebar means “reinforcing bar”;

rebar forms the framework within structural concrete columns and anchor bolts

connect and support the framework.)

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What happens next?

Tony: Okay… Well, you’ve seen our price list… How many are you considering

ordering?

Paul: Yes, well, what kind of discount could you give us on a large order…?

Tony: That depends… how many are we talking about?

Here Tony and Paul begin the bargaining process, which will be handled in more

detail in another episode. But let’s look at how they begin: Notice how both Paul

and Tony are careful not to make the first move. Neither one wants to offer too

much or too little without knowing more about the other side’s position, so they

both attempt to put off or postpone talking in detail.

After, Tony asks Paul how many bolts he wants to order, Paul asks, “ What kind

of discount could you give us on a large order?” This is a standard way to probe

about a possible price reduction.

Tony’s reply – “That depends…” is vague, or indefinite – he doesn’t commit to

any specific number. Thus, we can say he is being non- committal. Such vague

language is an important negotiation skill, especially at the beginning of talks.

[See BEP 51 & 52 for more on vague language.] Here are some more examples:

 Hmm… I’d need to think about that.

 That could be a possibility.

 That might be worth trying.

 That depends… can you tell me more?

That’s all for the dialog. We’ve reviewed the language Paul and Tony used to

start off the negotiation. Now, it’s your turn to practice.

Practice 1

First, let’s go over probing questions. Imagine you are negotiating with a

vendor. You will hear a series of cues telling you the areas to probe. After each

beep, use the cue to make a question.

For example, if you hear…

Example cue: Delivery terms <beep>

You can say …

Example answer: Could you tell us more about your delivery terms?

Other useful expressions include, “Could you go into more detail on…,” and

“Wouldn’t it be possible to….”

After each exercise, we will play an example answer, but bear in mind there are

many possible correct responses. Are you ready? Let’s give it a try.

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Successful Negotiations

Cue 1: Special offers

Learner 1:

Cue 2: Discount on a large order

Learner 2:

Cue 3: Exclusive rights in this market

Learner 3:

Answer 1: Could you tell us more about any special offers you have?

Answer 2: What kind of discount can we get on a large order?

Answer 3: Would it be possible to negotiate exclusive rights in this market?

Practice 2

Now you’ll hear a series of sentences with a verb blanked out or replaced with a

beep. Repeat the whole sentence but say the missing word.

For example, if you hear…

Example cue: What exactly do you <beep> by that?

You will say…

Example answer: What exactly do you mean by that?

After each response, we’ll play the correct answer.

Cue 1: First of all let me give you some <beep> on our proposal.

Learner 1:

Cue 2: Before we go on, could we <beep> on procedure?

Learner 2:

Cue 3: There are a <beep> of ways to look at this.

Learner 3:

Cue 4: We have three main issues we’d like <beep> with you today.

Learner 4:

Cue 5: We are dedicated to <beep> a lasting relationship.

Learner 5:

Cue 6: That <beep> … can you tell me more?

Learner 6:

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Answer 1: First of all let me give you some background on our proposal.

Answer 2: Before we go on, could we agree on procedure?

Answer 3: There are a number of ways to look at this.

Answer 4: We have three main issues we’d like discuss with you today.

Answer 5: We are dedicated to building a lasting relationship.

Answer 6: That depends … can you tell me more?

That’s all for this episode on getting a negotiation started, which is part of a

longer series on negotiation skills. In this show, we’ve studied creating goodwill,

suggesting an agenda, setting ground rules, clarifying, probing, exploring

possibilities, and being non-committal.

Thanks for listening and see you next time!

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Successful Negotiations

Language Review

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