A hard negotiation technique is considered an aggressive behaviour and does not contribute towards building a healthy customer relationship. On the other hand a soft negotiation technique and passive behaviour are not productive and may put the organisation in a weakened position since the other party make take advantage of this situation. According to Harvard Business School model the solution is using Principled Negotiation through an assertive behaviour. According to Fisher & Uri principled negotiation is ‘soft on the people and hard on the merit’ and has a philosophy of ‘Right makes Might’ approach. We can conclude that Principled Negotiation is the best negotiation approach to be adopted in the banking industry where building long term relations with customers is the main objective. Determining Management Negotiation Strategy Thomas and Kilman (1974) identified 5 conflict management strategies: Collaboration Compromising Competition Accommodating Avoiding
These apply not only to the banking sector but also to every negotiation scenario. Collaboration - This results from a high concern for your organisation's own interests, matched with a high concern for the interests of your customers. The outcome is "win/win." Compromising - This strategy results from a high concern for your organisation's own interests along with a moderate concern for the interests of your customers. The outcome is "win some/lose some." Competition - This strategy results from a high concern for your organisation's own interests with less concern for your customers’ interest. The outcome is "win/lose." Accommodation - This results from a low concern for your organisation's own interests combined with a high concern for the interests of your customers. The outcome is "lose/win." Avoidance - This results from a low concern for your organisation's own interests coupled with a low concern for the interests of your customers. The outcome is "lose/lose." Without doubt the most advantageous strategy when dealing with building customer relations in banking is using a Collaboration strategy although a Compromising strategy and an Accommodating strategy can sometimes turn useful depending on situations. Competition strategy also referred to as a Controlling strategy or an Avoidance strategy should not be considered since these strategies have no or very little concern on the customers’ interests. A Collaboration strategy is generally used when concerns for your customers are high and equally important with the organisation’s concerns; a win/win situation. It is also generally the best strategy when society's interest is at stake. This approach helps build commitment and reduce bad feelings. The drawbacks are that it takes both time and energy to build a long term relationship. Generally this strategy is regarded as the best approach for managing conflict where the objective of collaboration is to reach consensus. Using Principled Negotiation and using an assertive behaviour together with a collaborative strategy is the best combination when selling financial services to customers or businesses. Fisher and Ury in their book ‘Getting to Yes’ suggest that before embarking in any sort of negotiation, it is wise to identify an alternative plan of action just in case an agreement is not reached and it is referred to as the BATNA i.e. The Best Alternative To a Negotiated Agreement. Negotiating agreements may well be a simple sale of an insurance policy to a normal customer, to multimillion project with a corporate business. Selling, Negotiation and Bargaining in Financial Services Financial institutions offer a wide spectrum of financial services both to individuals and to businesses. Areas of potential negotiation in Financial Services could be Personal Banking, Private Banking, Business Banking, Corporate Banking, and Wealth Management … The wider the range of services, the more negotiation expertise is required. Today, most financial services are customised to meet the customer’s needs requiring continuous negotiation and bargaining keeping in mind aggressive market competition. The main objective in bargaining is to get and make concessions with your customers in an effort to move towards an agreement. Remember that there is always the risk of not reaching an agreement with your customers therefore it is important to be prepared and to have an alternative plan to break deadlocks when they occur. Customer Conflicts It is important not to assume that the lack of complaints is equal to a satisfied customer base. Handling customer complaints is an important part of keeping the business healthy and profitable. A complaining customer is trying to help the organisation understand where it went short in satisfying his or her expectations. An organisation should be delighted that a customer cares enough about the business to take the time to complain. If the organisation wants its customers and clients to come back again it must meet and exceed their expectations consistently. Resolving customer conflict efficiently in a timely manner will potentially reduce frustration and contribute towards reaching a compromise and help building stronger relations. | 
