How to Negotiate the Right Way with Customers Over Live Chat

June 28th, 2017 | Jylian Russell | Communication | Blog Home
How to Negotiate the Right Way with Customers Over Live Chat
“I’ve bought from your company for years and really like your service, but I feel I could pay less elsewhere.”
“I’ll sign-up for that service for a year if you can give it to me for $200 less.”
“I’d like to continue using your service, but I’ll need a better deal on your price if I’m going to stay with you.”

So, your customer is asking for a better deal over live chat.

In the past, such requests would have been quickly transferred to the sales team. But times have changed.

Technology, through tools like live chat, has made businesses – and their agents – more accessible than ever. Customer service reps now sit at the front line of a company’s bargaining efforts. And as such, negotiation skills are now critical to the customer service rep’s success — on live chat and elsewhere.

In this piece, we’ll look at the two primary types of negotiations and which one should be used when negotiating on live chat. We’ll also look at some of the reasons a customer may be motivated to negotiate in the first place.

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Types of Negotiations: Position vs. Interest Based

Any negotiation, at its most basic, can typically be classified as following one of two distinct approaches: position-based (a win-lose, competitive approach) or interest-based (a win-win, collaborative approach).

As a customer service rep, it’s ultimately your job to maintain a customer’s relationship with your company. Based on that understanding, it stands to reason that the second negotiation type should be the customer service rep’s preferred negotiation approach.

Let’s look a little closer at what we mean by position vs. interest-based negotiating.

Position-based negotiation: Position-based negotiations follow a line of thinking that holds onto a fixed position and outcome. This type of negotiation remains fixated on the ‘what’ of a negotiator’s desire, regardless of the interest of the person on the opposite side of the bargaining table. Often described as the ‘win-lose’ approach, parties who engage in position-based negotiating see the other bargaining party as a competitor that they must ‘beat’.

Party A: “I want to purchase this car for $10,000.”

Party B: “I’m sorry, but the sale price is $14,000.”

Party A: “If you don’t sell me the car for $10,000 I’ll go elsewhere.”

Party B: “Go ahead, our price is still $14,000.”

Interest-based negotiation: Interest-based negotiation, on the contrary, views bargaining as an opportunity to collaborate for the win-win of both parties.

Under this approach, both sides enter the negotiation open to listening to the interest (need) of the other so as to find a mutually beneficial outcome.

Party A: “I want to purchase this car for $10,000.”

Party B: “I’m sorry, the sale price is $14,000.”

Party A: “I can’t afford $14,000 unfortunately.”

Party B: “ Well maybe we can find a way to make this work better for you. How about we reduce the price to $13,000 and offer the payment in two installments of $6,500 to be paid over the next year?”

Party A: “Actually that sounds really reasonable and makes paying for it much easier. Thanks!”

Party B: “My pleasure!”

The following side-by-side comparison illustrates the basic elements of these two very different negotiation styles.

Positional Negotiation Interest-based Negotiation
Negotiators are competitors Negotiators are allies in finding a joint solution
Negotiator focuses on their ‘win’ Negotiator focuses on a mutual win
Fixates on achieving their goal (winning) Listens to interests of the other party
Pressures the other party Engages in a reason-based discussion

(MIT has created a wonderful fable that does a great job of further illustrating these two approaches.)

Negotiating with Empathy

At its core, the interest-based approach negotiates with empathy for the interest(s) of the other party.

It’s probably obvious then, that in the world of customer service, this approach should be preferred. After all, by bargaining in a way that hears your customer out, you’re more likely to find a solution that keeps both you and your company happy. Talk about a win-win.

Getting to the Heart of Your Customer’s Need

Now that we all agree that interest-based negotiation is the approach of choice, let’s take a look at some of the common reasons a customer may be motivated to negotiate.

Motivated by Price
  • Your product or service price has recently increased.
  • A competitor is offering a similar product or service for a cheaper price.
Motivated by Long-Term Relationship
  • After years of being a loyal customer, they may feel they’re owed a deal or special offer.
Motivated by Other Options
  • A competitor is offering a similar or upgraded product or service to yours, plus additional features.

Understanding your customer’s motivation is essential to being able to find a solution that works for you both. Understanding leads to empathy, and it’s through empathy that you and your customer will have a better chance of reaching an amicable outcome.

Let’s take for example the following scenario. A customer (let’s call him Charlie) reaches out in frustration about a recent price increase to a product he’s been buying for years.

Charlie: “I used to pay $20 for your product and now it’s up to $25. This isn’t acceptable.”

Customer Service Rep: “Thank you for reaching out Charlie. I’m sorry to hear you’re upset. I can see that you’ve been a loyal customer of ours for five years, which I’d like to take the time to thank you for. We really appreciate your business.”

Charlie: “Yes, and I’d like to stay with you but I need some compromise on the price.”

Customer Service Rep: “I understand Charlie. In appreciation of your long-term support of our business, we’d like to offer the price of $23/unit; a $2 saving on our regular cost. I’ve done a quick calculation based on your regular monthly shipment – this discount will save you $3,600 per year. Does this sound reasonable to you?”

Charlie: “Yes, this works well for me. Thank you.”

In this scenario, the rep takes the time to listen to and acknowledge Charlie’s frustration. The rep goes further to thank Charlie for his loyalty. By doing so, the rep immediately calms the situation, leading Charlie to reveal that he’s willing to pay an increase of some amount, so long as the company also budges on their price. At the end, both parties walk away with their relationship intact and the sale set at a price that works for them both.

Following the Negotiation

Once the negotiation wraps, it’s important to look back on the negotiation and observe whether it was a success or not. A few questions to ask yourself include:

  • Did I successfully stay within my company’s bargaining parameters?
  • What was the outcome of the negotiation?
  • Did the customer accept my offering?
  • Were they pleased with the outcome?
  • Are they still a customer?

Reflecting on each live chat negotiation shortly after it happens can help you learn from the negotiation. Doing so can also provide you the chance to follow-up with the customer should it not have gone as smoothly as you liked.

Conclusion

Thanks to advancements in technology, negotiation has now become a critical skill among successful live chat agents today. As part of that skill-set, agents must learn how to negotiate from an interest-based perspective that considers their customer’s point-of-view and needs throughout the bargaining process.

Like all parts of the customer service spectrum, empathy is essential for reaching a win-win negotiation outcome.

To improve your empathy skills, be sure to check out our training tips, 5 Quick and Easy Empathy Training Activities for Busy Teams .

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This free training features up-to-date customer service best practices, to help you boost your skills and become a true customer service professional.

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About 

Jylian is an inquisitive and energetic copywriter based in Canada and regularly works with teams across Europe, APAC, and the US. An experienced SaaS writer, she specializes in social media, fintech, and customer service content.

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