One of our seminar participants sought advice on what strategy to use to ask for a raise during her annual review with her boss. All the options she had considered up to that point had dealt with the face-to-face review session. She had not considered any of the preplanning and information gathering she needed to do to create a powerful negotiation. She had not taken into account such things as documenting her accomplishments over the previous year; researching her boss's goals and figuring out what she could do to help him achieve those goals; exploring the types and amounts of raises her boss had given in the past; and forming a clear vision of her own goals for the negotiation. What this seminar participant did not realize was that the negotiation for the raise began the day she started working for the company and would continue until she started working for someone else. Most negotiations, like life, are a continuous process.

Although many people do not think about it, time and effort should be considered a direct cost associated with negotiation. Too often, negotiators pay a high price for failing to realize this. In 1991, Ronald Coase was awarded the Nobel Prize in economics for his work describing transaction costs. Coase pointed out that the value of any agreement is reduced by the amount of time and effort that is invested in reaching that agreement. Transaction costs include the time and effort that you, your counterpart and anyone else who is involved spend in making the deal happen. In our seminars, we offer this scenario as a fun example: "You are at a car dealership and you think you can get $500 off the price of the car for which you are negotiating. How long are you willing to stay at the dealership to achieve your goal? The longer you are willing to stay, the better your chances are of gaining the deal point." When one participant suggests a time limit of, say, five hours, another participant is always quick to point out, "Yes, but how much is your time worth?"