Car deals
The difference between the best deal and a fair deal is all about mindset. In almost any case, striving to do the best deal for your side requires a less-than-best deal for the other side. On the other hand, there’s a lot more room for all to win if you’re looking for a fair deal for all.
Understand my own bias up front. I’m a bad negotiator. While I get irrationally upset when I think I’ve been treated unfairly, I’m perfectly happy leaving money on the table if I think I’ve got a fair deal.
Fair Deals
Two cases in point.
In buying my last car, I looked up the market value of the car I wanted to buy and the car I wanted to trade in. Edmunds and TrueCar can tell you about cars’ MSRPs, invoices and market average prices. I walked into the dealership, told them exactly what I wanted to do, and that I had looked up the market data.
Without looking at my numbers, the salesman went away and came back with their offer. They proposed paying me $36 more for my trade-in than the market data I had, and charging me $50 more for the new car than the market data I had. I took their numbers. They made a fair profit. I got the car I wanted and felt like it was a fair deal. Win-win.
Second case. A million years ago we were doing some outdoor advertising – billboards. The cost for our New York agency to shoot the pictures seemed exorbitant. I got a dramatically lower bid from a local photographer in Cincinnati and went with that.
The day before his photo shoot, I dropped by his office. He’d created an acrylic model to help him create the picture.
“Love it.”
“Thank you.”
“How much did it cost to make this model.”
“I’m not going to tell you.”
“Why not? It seems I’m paying for it.”
“Actually, you’re not. It cost much more to make than I’d expected. But I’m still honoring the original bid.”
“That’s silly. Your price was way less than New York. Why don’t you submit a new bid now that you know you’re costs so you can still make a fair profit.”
He did. I accepted the bid – which was still 80% less than the New York price.
This was purely selfish on my part. I wanted to use him again. This way he could submit a fair bid for the next job, not having to make up for lost profit on the first job. We ended up working together for years and treating each other fairly in every case.
Best Deals
Others want the best deal possible. At another company, we were hiring an advertising agency. Just before the three finalists presented, my boss asked me what we’d do if we liked one agency’s idea, but didn’t want to hire them.
“Hard to imagine that happening, but we’d buy out their work. And oh-by-the-way, it should be a pretty easy negotiation since they can’t use it for anything else.”
“But the contract says we own all their ideas.”
“That was to keep them from using them for anything else.”
“But the contract says we own the ideas. We don’t have to pay them anything.”
“That wasn’t what I had in mind when I asked them sign the agreements. I think taking their ideas without compensating them would be unethical.”
“I’m a lawyer. I will not have you questioning my ethics.”
“I’m not questioning your ethics. I’m just telling you what my ethics are. And I’m not going to do that.”
In retrospect, this wasn’t about ethics. It’s not necessarily unethical to strive for the best deal for yourself or your team. It’s just a different approach than looking for a fair deal. You get to make your own choice about which approach makes you more comfortable – both in terms of who you choose to work with and who you choose to be yourself.
My proposition is that the best deals at least tend towards win-lose. In that, they are transactional. All the value is in the deal. None in the relationship.
Conversely, fair deals tend towards win-win. Some of the value is in the immediate deal. Some of the value is in the future relationship.
Click here for a list of my Forbes articles (of which this is #744) and a summary of my book on executive onboarding: The New Leader’s 100-Day Action Plan.
