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Financial Empowerment Center
Counselor Training Curriculum
Topic 9: Negotiation
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Questions to Think About
• What is effective negotiation?
• What kind of preparation is required for a negotiation?
• How do I ensure the other party keeps its side of the
negotiated agreement?
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What is Negotiation?
• “…back-and-forth communication designed to reach an
agreement between two or more parties with some interests
that are shared and others that may conflict or simply be
different.” (Moffit & Bordone: The Handbook of Dispute
Resolution)
• “Process through which parties move from their initially
divergent positions to a point where agreement may be
reached”. (Steele & Beasor: Business Negotiation – A
Practical Workbook)
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What is Negotiation?
• “Acceptable compromise by determining which needs
are fixed and which flexible for negotiators.”
(Fisher & Ury: Getting to Yes)
• “Break through the barriers: your reaction, their
emotion, their position, their dissatisfaction, their
power.”
(Ury: Getting Past No)
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What is Negotiation?
In a Nutshell:
Getting what each party wants via effective
communication and compromise.
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Effective Negotiation
Steps to A Successful Negotiation
1. Preparing
2. Negotiating From Position of Strength
3. Summarizing and Memorializing
Agreement
4. Delivering As Agreed
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Step 1: Preparing
Gather All Necessary Information
Answer the following questions:
1.
What information do I need to know?




2.
What resources do I need in order to negotiate this
account on behalf of my client?



3.
What are the accumulated late fees?
How many late payments have there been?
Has this account been negotiated before?
What is the client’s cash flow?
Does the creditor need a letter proving job loss?
Are there any proofs of previous payments?
Prepare all necessary documents and summarize the facts.
What legal rights are involved for each party?
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Preparation
4.
Who is the other party?


5.
What is the other party’s authority to negotiate?



6.
Is this the decision maker?
If third-party collector, do they have a WA license?
Do they have documentation of the debt?
What are the other party’s objectives?

7.
Is it the creditor, a third party collector, a buyer of the
account?
Is there an intermediary – A mediator, referee, another
counselor, attorney?
What does he need to accomplish? What does he have at
stake?
What motivates the other party?

Performances, commission.
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Preparation
• Likes and dislikes
 Personal issues
• Find some common ground
 What do both sides want?
• Consider the needs of everyone involved
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Preparation
Define Desired Outcome
• What is the range of acceptable outcomes?
Maximum (Ideal)
Minimum (Acceptable)
Be SMART
• What can both sides afford to lose?
Understand the consequences of the decision
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Preparation
• Consider alternative options, if an agreement cannot
be reached
• Prepare to walk away
Understand the consequences
Consider how to minimize effects
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Step 2: Negotiating From Position of Strength
• Understand negotiation strategies and tactics (the other
side is using them too)
• Frame and ask questions properly
• Assess and evaluate the offer (go back to the list of
desired outcomes from preparation)
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Effective Negotiation – Position of Strength
Negotiation strategies and tactics
• Negotiation decoy
• Extreme offer
• Nibble
• Cherry picking
• Flinch
• Good cop / bad cop
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Effective Negotiation – Position of Strength
Negotiation strategies and tactics
• Limits – Best offer, deadline
• Higher authority
• Take it or leave it
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Frame & Ask Questions
•
Framing questions properly sets stage for rapport,
sense of cooperation
•
“Cooperative” questions
 What did you mean by…?
 Can you tell me more about …?
 Is it possible to…?
 Please help me understand…
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Frame & Ask Questions
•
Questions that challenge, or escalate conflict
 What??
 Why??
 Do you honestly expect me to…?
 Isn’t it true that…?
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Assess & Evaluate Offer
Choose when, where and how to respond
• Allow time to respond appropriately
• Apply negotiation tactics
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Step 3: Summarize & Memorialize Agreement
After an agreement has been reached:
•
Summarize and restate terms with other party
•
Memorialize ASAP – Confirm by e-mail or fax
•
GET IT IN WRITING!!!!
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Step 4: Deliver As Agreed
• Review the offer’s terms for amounts, deadlines,
processes
• Deliver as agreed in a timely and appropriate manner
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Topic 9 Exercise #1
Role Play
All of the credit cards are jointly held. Bobby has a 712 credit score, and Marta has a
690 score. They recently missed the monthly payment on one of the cards by 15 days,
and were charged a $39 late fee.
The credit card company for which his payment was late, called Bobby at work, and left a
message with a co-worker asking him to call their 800 number. Bobby did get the
message, and the card company called again the next morning. This time, the caller left a
message saying that Bobby’s payment was overdue with his co-worker.
Marta has a savings account with $500 that pays $1.50% per year. On April 10, Bobby’s
mother and brothers sent him $1,500 for his birthday.
Is there anything that Bobby did that you would change, and if so, what would it
be and why?
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