Negotiation

Negotiation Exercise 1:

Alpha Electronics is a multi-store consumer electronics store that specializes in high-end consumer electronics. Alpha Electronics prides itself for its customer service and offers specialized customer service training that it feels helps keep its store ahead of the competition.

Sara works in the Returns department of Alpha Electronics as a customer service representative. Sara has no formal negotiation training, nor has she felt that her particular role is about negotiations. She feels that her position is all about customer service because she is in the customer service department.

Sara continuously negotiates with customers who are unsatisfied with their purchase. From her customer service experience, she knows to always greet a client and smiles and asks how she can help. She listens carefully to what the customer is having a problem with and makes no judgment. Sara asks what will make him or her happy and then offers something more; such as, if a customer wants a full refund, she will offer a full refund, but will recommend that the credit be used towards a similar unit that might be more to the customer's liking. She will offer an extra incentive, such as an additional 10% discount for that item. Sara will also try to work probing questions about the interests of the customer into the interaction so that she can advise him or her of upcoming sales in those areas, or direct him or her to existing sales that might not have been effectively advertised.

Sara once had a customer that was very difficult. She felt that she handled the situation as best as she could, but she found herself taking the criticism from the customer personally.

Negotiation Simulation

Sara greeted the customer in her normal friendly way and asked how she could help. The customer, John, immediately launched into a discussion about how the computer that was purchased at Alpha Electronics was defective and that it did not meet his needs, and that he felt that he was told an untruth by the Alpha Electronics employee. She could not help but take the situation personally and she found it difficult to immediately offer a full refund. She tried to get more information, but the customer was quick to blame Alpha Electronics for all the trouble, and the customer demanded a full refund and an apology from the employee who sold him the computer. Sara then offered a full refund and explained that perhaps an apology was a little extreme as she was certain that the employee who sold him the computer was doing the best that he or she could do.

John then acted offended that an organization like Alpha Electronics would not offer an apology to such an important customer. Sara did not believe that John was really an important customer and started feeling that he was just trying to get something more. She did not feel that an additional 10% off a similar item was going to help, so she did finally ask what would make the customer happy. John agreed that a full refund was a good start, but he would only accept 50% off an iPod that was already on sale at Alpha Electronics. Sara knew that a 50% discount on a sale item would certainly be a loss for Alpha Electronics, but she did not feel that there was any other way to resolve the situation. She offered John the 50% discount and he seemed to leave satisfied.

Questions

From your experience with retail returns, what are the goals of the negotiation from the perspective of each party? What are Sara's goals and objectives in her role as a returns employee? What are the goals and objectives of the customers that she meets in the returns department? Why are they different?

From your perspective, how would you have handled the negotiation simulation presented above? Would you have a different approach? Offer a perspective on how you would handle the negotiations if you were the customer, as well as a perspective on how you would handle the negotiations if you were the customer service representative.