The Bartering Mindset summary

Chances are, you’ve bartered at some point in your life. Perhaps you traded toys with a friend, or mowed your neighbor’s lawn in return for a favor. Still, bartering is far from the norm when it comes to daily transactions. So before we look at applying the bartering mind-set to our monetary economy, we need to understand what bartering really feels like.

Like a person with a monetary mind-set, a barterer comes to a negotiation with a set of assumptions. To understand these, imagine a farmer who lives with his family on a prairie; let’s call him Keith.

If you were to ask your current boss for a raise, how would you go about it? Most people would request a meeting with the boss, at which they would discuss their performance and finally ask for a raise. They might even ask for a higher number than what they really want, assuming that they’ll have to compromise anyway. But if you were to approach the same problem with a bartering mind-set, you might find that you don’t have to compromise at all. To find out how, let’s take a look at the first step you’ll take in cultivating a bartering mind-set: defining both your needs and your offerings deeply and broadly.

Defining your needs deeply means not only stating what you need, but also understanding why you need it. If you’re asking for a raise, for example, do you need more money to cover commuting costs? 

In step one of cultivating the bartering mind-set, you came to a more complete understanding of your needs and offerings. But you’ll also want to get a thorough understanding of your partners.

That brings us to the second step: defining the full spectrum of your potential transaction partners. Here, once again, you’ll want to get creative to widen the scope of your possibilities.

You now have a detailed map of the needs and offerings of your potential partners. Step four to cultivating the bartering mind-set is combining this information with your map of what you need and offer and using that to predict the most powerful partnerships across the market.

There are three stages to predicting the power of relationships. The first stage is translating the needs and offerings that you’ve mapped out into specific trades. You can do this by making a chart, noting in one column how a partner will fulfill your needs with their offerings and in a second column how you could fulfill their needs with your offerings. So in the first column, you might note the possibility of increasing revenue by advertising before movies at the local theater. Then, in the second, note that your café could distribute fliers featuring the theater’s current program. 

Once you’ve identified the most powerful relationships you can cultivate, you’re finally ready to negotiate. But before you start making any offers, remember that at this point you’re not trying to secure a deal or even necessarily pave a path for one. Instead, you’re trying to uncover information in order to understand your partners and the market as a whole.

Think of it like this: You want to test your assumptions about your partners without burning any bridges if you decide not to pursue a deal. You can do this using a five-step process: introducing yourself, bringing up your needs, meeting the other party’s needs, meeting your needs and concluding.

As soon as you’ve decided which power partnerships you want to pursue, you’re ready to move into the value-claiming phase of your negotiation. That means transitioning back to a monetary mind-set. But be careful! Transitioning too abruptly by aggressively pushing one issue could disrupt the work you’ve just done. 

Instead, integrate the bartering and monetary mind-sets smoothly; the simplest way to do this is with a multi-issue offer (MIO). Unlike single-issue offers (SIOs), in which you propose one issue at a time, MIOs address all negotiable issues at once. In your negotiation with the grocer, for example, the pastries, window signage and coupons would all be presented together in a single offer.