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Negotiate to Win Using Risk Reversal Strategies by Greg Williams

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Negotiate to Win Using Risk Reversal Strategies by Greg Williams

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When you negotiate, do you consider the value that ‘risk reversal’ strategies have on the outcome of the negotiation?  Risk reversal is a strategy that allows you to take the onus off the other negotiator, which increases his comfort level with your proposal or position.  Shrewd negotiators seek prudent ways to project the perception that their negotiation partners are receiving value from the negotiation. In using risk reversal strategies, that image is conveyed very succinctly. As savvy negotiators become more circumspect, you can add risk reversal strategies to enhance your negotiations.

When you’re confronted by increasing pressures to make concessions, understand why the requests are being made. Let the requests for concessions accumulate before trying to address them on an individual basis. Then, look for a common thread that runs through the requests, with the intention of discovering how you can address all of them, or as many as possible, by diminishing the overall weight they bring to bear on the negotiation. After you’ve made that determination, craft a risk reversal strategy that will take the burden of the requested concessions of the other negotiator and place the burden on yourself.

  • Plaintiff attorneys use risk reversal strategies when they offer to take a case on contingency.
  • Defense and plaintiff attorneys use risk reversal strategies when they agree to a high – low arrangement. In this model, the attorneys identify an expected range for the verdict at trial. If the jury awards any money, the attorneys have already identified their risk range. Pat assisted with a case that involved a quadriplegic who was scalded in a bathtub of water. The attorneys agreed to a low of $900,000 and a high of $1.2 million. The jury returned a verdict of $200,000. Under the high-low agreement, the plaintiff got $900,000.

Even though we’re in challenging economic times and things may be tough, by negotiating smarter and using risk reversal strategies, your hope for positive negotiation outcomes can outlive your despair. When considering the potential of a negotiation outcome in its totality, consider the role ‘risk reversal’ can play in making concessions and adding perceived value to the negotiation … and everything will be right with the world.

The Negotiation Tips Are …
• Before entering into a negotiation, give considerable thought to how you can use risk reversal strategies to assist the other negotiator in moving towards the outcome you’d like to achieve.
• When considering which risk reversal strategies might work better than others, remember to consider the mindset of the person with whom you’re negotiating. Different negotiators are motivated by different incentives.
• People like to feel they’ve received more than they bargained for. When you negotiate, don’t let the pit of your fears stop you from reaching the summit of your negotiation outcomes. In every negotiation you’re involved in, explore the value that risk reversal strategies can add to your negotiations.

How do you use risk reversal methods? Send us a comment.

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