CRM Negotiation & Conflict Resolution 1 — Questions and Answers
Question 1: In principled negotiation (Fisher & Ury), the focus is on:
- Winning at all costs to protect the firm's interests
- Separating people from the problem and focusing on interests rather than positions (Correct answer)
- Never making the first offer
- Avoiding all compromise to achieve maximum gain
Correct answer: Separating people from the problem and focusing on interests rather than positions
Principled negotiation, from 'Getting to Yes,' focuses on mutual interests and objective criteria rather than entrenched positions, leading to better outcomes for both parties.
Question 2: What is a BATNA in the context of negotiation?
- Best Approach to Negotiating Annual targets
- Best Alternative to a Negotiated Agreement—the course of action if the negotiation fails (Correct answer)
- A framework for setting bank account terms
- A regulatory standard for client agreements
Correct answer: Best Alternative to a Negotiated Agreement—the course of action if the negotiation fails
Knowing your BATNA defines your walk-away point and gives you negotiating leverage by clarifying how good the deal needs to be relative to your alternatives.
Question 3: A client is unhappy with their portfolio's performance and threatens to move their assets. A CRM's FIRST step should be to:
- Offer immediate fee concessions to retain the client
- Listen actively to understand the specific concerns before presenting any response or solution (Correct answer)
- Escalate immediately to senior management
- Defend the portfolio's performance with data
Correct answer: Listen actively to understand the specific concerns before presenting any response or solution
Active listening first demonstrates respect and allows the CRM to fully understand the root cause of dissatisfaction before formulating an appropriate response.
Question 4: The 'win-win' negotiation outcome in CRM is preferred because:
- It always results in equal concessions from both sides
- It preserves the long-term relationship by ensuring both parties feel their needs were met (Correct answer)
- It is required by regulatory standards
- It maximizes the firm's financial return in every deal
Correct answer: It preserves the long-term relationship by ensuring both parties feel their needs were met
In ongoing client relationships, win-win outcomes build trust and goodwill that sustain the relationship beyond any single transaction.
Question 5: When a colleague's service failure creates a conflict with a client, the CRM professional should:
- Blame the colleague to protect their own reputation with the client
- Take ownership of the client experience, apologize on behalf of the firm, and work to resolve the issue (Correct answer)
- Tell the client to contact the responsible colleague directly
- Document the conflict and take no immediate action
Correct answer: Take ownership of the client experience, apologize on behalf of the firm, and work to resolve the issue
From the client's perspective, all firm representatives share responsibility for their experience—taking ownership prevents further damage to the relationship.
Question 6: In fee negotiation with a high-value client, the CRM should anchor discussions by:
- Starting with the lowest possible fee to avoid resistance
- Leading with the full value delivered before discussing price, and opening with a fee that reflects that value (Correct answer)
- Matching the competitor's price immediately
- Letting the client propose the fee first
Correct answer: Leading with the full value delivered before discussing price, and opening with a fee that reflects that value
Anchoring on value first shifts the conversation from cost to benefit, making the fee easier to justify and less likely to be challenged aggressively.
CRM Negotiation & Conflict Resolution 1
In principled negotiation (Fisher & Ury), the focus is on: