Wednesday, August 23, 2023

Fairness and Moderation in Negotiations – You Have All the Power; Should You Use It?

I recently came across a LinkedIn post about the use of negotiation power. The post argued that even when you have all the leverage, you would be wise to think through crushing your opposition just because you can.

As an attorney, I certainly understand the logic in this because you won’t always have the upper hand and people tend to have very long memories when it comes to people that push hard just for the sake of pushing. I like to believe that on an individual level most other people also adhere to some sort of unwritten rule that a little bit of fairness goes a long way, but when you move up to the level of a business it seems like this unwritten fairness doctrine tends to quickly go by the wayside (and yes, to some extent, we the attorneys are likely to blame).

As a simple exercise, think of the last three businesses you interacted with. Chances are that if they were larger than your average mom and pop shop, they likely overused their leverage to their advantage just because they could. Take, for example, app N, which you use on your phone every day. The app company that owns it likely collects all kinds of data about your phone usage because you agree to let the app company do so just by using the app. While this logic works perfectly from the business perspective, it doesn’t seem all that great from the user’s perspective.

For all the entrepreneurs out there, I encourage you to keep this unwritten fairness doctrine in mind as you make decisions about how your business will interact with both customers and other businesses, especially in the early days where you have the best opportunity to build brand loyalty.

As I said, customers tend to have long memories, and while you may be the only kid on the block with the cool new gadget now, unless you end up with some miraculous monopoly product, there will likely come a day when your customers have a choice between you and the store next door and chances are that those customers will remember when you squeezed that extra penny, piece of personal information, or whatever the case may be out of them just because you could.

As a side note, I do hope “App N” is fictional. These days you have to be careful which random letter you use in your examples since apparently some big social media company thought that they would take over one of the letters of the alphabet just because they could.

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