The 3 Cs to Enhance Your Negotiation Skills
How many skills are more essential for a financial advisor than negotiating?
Through our work with Janus Henderson’s The Science of Negotiations program, we meet with thousands of advisors each year and consult on how strong negotiation skills can be best deployed to grow their businesses and optimize positive client outcomes. With stakes high for both the advisor and the client, it’s critical to learn techniques that promote benefits for both sides and improve long-term relationships.
Learn the three critical elements to enhance your negotiation skills in an exclusive interview hosted by John Evans, Jr., Ed.D, Executive Director of Knowledge Labs™, with negotiations expert Professor G. Richard Shell from the Wharton School of the University of Pennsylvania and author of Bargaining for Advantage.
Key Takeaways: The 3 Cs
- What is your client’s level of commitment to the relationship?
- Use candor for difficult conversations and demonstrate directness.
- Make sure your client is reminded of the value you bring through the expertise, competence and trustworthiness that build credibility.
The 3 Cs to Enhance Your Negotiation Skills
John L. Evans Jr., Ed.D.
John Evans: Hi, I’m John Evans and I’m here with, it’s a terrific honor to be with Richard Shell. Richard Shell is a world-renowned expert on negotiations. He’s taught at the Wharton School of Business for years. He’s counseled industry and governments alike, and it is just with great excitement I’m going to ask him to be very specific, to give three recommendations for financial advisors out there, financial planners out there, registered investment advisors, who are facing perhaps difficult conversations imminently due to a changing landscape.
Professor Shell, what should an advisor who, she’s looking at a difficult conversation coming up, she’s preparing and you have taught for years and years that the key to a great negotiation, for unlocking value for both parties, really is in preparation. What three things should an advisor be thinking of?
Richard Shell: Great, John. It’s great to be with you again. I think the things that a financial advisor who’s got a very special relationship with their client and it has to do with helping with being a trusted counselor, when the moment comes to talk about their fee, they have kind of three touchstones, and I call them, “Three Cs.”
Shell: The first is a touchstone on the commitment they have to that relationship, and find the moment in that relationship where that commitment will be vivid to the client so that you’re not just cold calling them out of the blue, having not spoken to them for months and now say, “Let’s talk about the fee,” but you come in within the context of that committed relationship on their behalf. So that would be the first C.
The second, candor. This is going to be a difficult conversation. I think if you try to beat around the bush, if you try to pretend it’s not a difficult subject, I think that’s not going to work. Google has a new concept that they call radical candor.
Evans: Radical candor.
Shell: Radical candor, where they have kind of a practiced permission when someone is avoiding a piece of bad feedback or bad news about their business model or something that you finally just have to say it, whatever it is, and say it flat out so they understand it. And I think when it comes to fee discussion with a client, you want to forecast it and you want to tell them that it’s your duty to be candid about it and that you want to be fair. So candor about the fact that change is happening and candor about the industry standards that that fee is nested in and the relationship and the consistency between the standard that the industry is practicing and the proposal that you’re making on the fee, so candor on both those subjects.
And then the third C, a third thing you have to reemphasize and find a way to get in there, is leveraging your credibility.
Shell: And credibility is a big word. It has sort of three legs, it’s like a stool. Credibility on your expertise, so you want to be able to make sure the client is reminded of the value that you’re bringing because of the expertise you have. You know things they don’t know. You’ve been demonstrating that. It’s, again, helpful before this sort of discussion to have primed them with another example of your expertise.
Second, your competence, your ability. Now, you know, financial advisors who do nothing but try to beat the market and sell that are probably not going to succeed because over a long term, it’s pretty difficult to have that be a unique competence. In fact, most of the time, the people who do that, unless they’re Warren Buffett, are usually doing something you have to, you know, kind of be careful about. But competence at managing their account, competence at delivering services and competence at managing the relationship.
So the second leg of that stool is competence and the third is trustworthiness. And this means you get the chance to remind them to frame this discussion around the extraordinary experiences that you’ve already created for them that have made your team, your group, a part of their lives. Recognize the transformations and the benchmarks that have happened in their lives and try to nest this whole conversation in the context of a trustworthy advisor who is continuing to bring value under a changing circumstance where the fee has to be adjusted for whatever the reasons are, whether it’s firm policy or industry changes or whatever.
So you bring those three Cs to this conversation – commitment, candor and credibility – I think you’re going to have a lot more success.
Evans: Thank you very much, Richard Shell. And remember the aim of any negotiation curriculum is engendering the win/win, looking for engendering the mutual satisfaction. That’s our pursuit, that’s our aim. Richard Shell, thank you very much for being with us.
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