Expert advice showdown: Keld Jensen vs. ChatGPT-4

Whose advice was it: Keld Jensen's or ChatGPT-4's?

I got a challenge for you, if you choose to take it. Pick the answer below you believe is my answer. But first, read the text.

I receive questions from clients every single day on negotiation challenges.

Recently I received the following email from a client. I answered the email myself, and then I asked ChatGPT-4 to answer the email as Keld Jensen.??

“I am a medium size producer of building materials, negotiating with a procurement officer who is combative and just want a price reduction of 5%. I am not able to reduce my prices with more than 2%. The annual revenue from this client $2,4 million and we have been working together for 4 years. What would you advise me to do?”

Which one is Keld’s advice, and which one is ChatGPT-4’s advice, answering as Keld Jensen?

Answer #1:

I would advise you to approach this situation using the following strategies:

1. Focus on value, not just price: Instead of only discussing the price, emphasize the value your building materials provide. Highlight the quality, durability, and any other features that set your products apart from the competition.
2. Build rapport and trust: Having worked together for four years, it's essential to maintain a strong relationship with the procurement officer. Acknowledge their need for a price reduction and express your understanding of their position. This could help in fostering a collaborative environment for negotiation.
3. Use the power of alternatives: If you cannot reduce your prices by more than 2%, consider offering other incentives that could make up for the difference. For instance, you could offer extended payment terms, discounted or free shipping, or additional support services.
4. Apply the principle of reciprocity: If the procurement officer is adamant about a 5% price reduction, you could ask for something in return that benefits your company. This could include a longer-term contract, higher volume commitments, or additional business opportunities.
5. Highlight the cost of switching: Remind the procurement officer about the costs associated with switching to a different supplier, such as additional time and resources needed to find and onboard a new provider, potential disruptions in supply, and potential quality issues.
6. Be prepared to walk away: If you cannot reach an agreement that is satisfactory for both parties, be prepared to walk away from the negotiation. Sometimes, this willingness to walk away can make the other party reconsider their position and come back with a more reasonable offer.
7. Follow up: Regardless of the outcome, make sure to follow up with the procurement officer and maintain a professional relationship. This could open doors for future negotiations or opportunities with the client.

Remember that negotiation is an art, and it requires patience, empathy, and a willingness to find creative solutions that benefit both parties. Keep these principles in mind as you navigate the negotiation process, and you'll increase your chances of reaching a mutually beneficial agreement.

Answer #2

I would suggest you do the following:

1.?????Look to establish the TCO for your client. Search for value creation instead of price and cost. Price is a zero-sum variable.?

2.?????Create rules of the game – agree on how to negotiate with your counterpart before you start negotiating. Should the negotiation be open, sharing data and looking for asymmetric values or not? Collaborative or zero-sum.?\

3.?????Agree on the agenda before the negotiation. List price as one of the last items to be discussed and try to realize NegoEconomics through other variables.?

4.?????Develop more variables than just one. Limiting yourself to just one variable will reduce the potential of expanding the pie.

5.?????Work as a team. Bring in one or two colleagues in the negotiation and define the roles. A team will help to delegate the responsibilities and take the pressure of you as negotiation head. You will need one to oversee the financials and a notetaker, who is the memory of the team.?

6.?????Focus on trust and relationship. If trust is high, transactional cost is reduced.?

7.?????Remember reducing your price without getting something in return is considered a unilateral concession and not allowed in negotiations.?

It can be difficult to distinguish between answers provided by Keld Jensen and those provided by ChatGPT acting as Keld Jensen. Nevertheless, I am impressed by the level of detail and precision in ChatGPT's responses. In fact, ChatGPT as Keld Jensen provided more detailed answers than I did.

AI, specifically ChatGPT, is a hot topic nowadays, especially in the context of negotiation. As such, I am conducting extensive research to explore how we can leverage AI tools to enhance negotiation outcomes. Together with WorldCC, we are conducting global simulations to compare the results of negotiations between human negotiators, human negotiators assisted by ChatGPT, and ChatGPT negotiating on behalf of humans.

We have completed the first round of simulations and are now embarking on the second round to compare our findings.?

*By the way - my answer is #2

My New Book is Launching October 23rd 2023. Click below.

I am Keld Jensen, dual citizen of Denmark and the US, living in California. I am a former CEO of a public technology company in Stockholm Sweden but discovered in 1998 that I was unconscious incompetent in the science of negotiation. Like most executives by the way. So, since 1998 I have been advising corporation and governments on negotiation. I am an award winner author of 25 books, published in 38 countries. Associated professor at 4 universities where I teach negotiation in eMBA classes, TEDx speaker and the creator of the worlds most awarded negotiation strategy SMARTnership Negotiation.