The Art & Science of Negotiating a Deal – Part 4

This is the fourth part in our series of sales negotiation tactics.  This post covers some of the finer points of negotiating tactics that could derail your deal.

Power of Print and Policies

We tend to give the written word and company policies more weight and credibility than the spoken word and requests. For this reason we recommend you list your prices in writing rather than discuss them verbally. Written words are seen in a light of enhanced legitimacy, and are less often challenged.

Moral Appeal

You will hear the other side framing their request as being the ‘fair‘ or ‘right‘ way. In so doing, by disagreeing with their proposal, you run the risk of being labeled as ‘unfair‘ or ‘wrong‘!

“If we agree to pay in 30 days, then it’s only fair that you let us have our standard 5% discount”. “Let’s be equitable and share the costs on this.” “If I take this deal back to my boss, he will chew my ear off! Can you please help me out just a little?

Remind the other party that you earned your trusted position through quid-pro-quo in negotiations. So if you make this concession for them, you must receive a concession in return. If there are interests of yours that are not fully met, now is the time to discuss them. “If I give you a discount of 5%, then I need you to add product group Y to this order.

The moral appeal could conceal an interest that has yet to be fully met. In the third example you could ask, “So what interests would your boss want met, can you rank them?

Negotiation by Association

Also known as ‘Name Dropping‘. This tactic is demonstrated when a seller brings up having done business with a VIP or a venerated company. Alternatively they may exhibit a picture in their office of themselves shaking hands with personalities or leaders like Nelson Mandela. The peril lies in the human tendency of wanting to conduct business with individuals who are well connected.

Most important is to distinguish what is happening and not permit yourself to be influenced or swayed to treat this person any differently than you would have without this information. It’s all too often no more than a thinly guised negotiating tactic.

If you believe they are stretching the truth, ask them what they performed with the person or company. Appear interested and ask for details. If they cite a company ask for the name and position of the person they dealt with. If they become vague or change the topic you can draw your own conclusions.

Negotiation Default

The default tactic tests your thoroughness and diligence. You are given a benefit such as an extra service or more products, along with a contractual term or note stipulating that they presume these terms are to your liking. The responsibility falls upon you to contact the other party and explain that you did not ask for these additional products or services. If you are lazy and don’t read all communication, or if you don’t take action, you will be setting a precedent of implied agreement that is hard to escape from further down the line. Many feel taken advantage of and become aggressive as a result. We would again suggest that aggression is not the best route when negotiating with counterparties employing such tactics.

It is best to be firm when replying to a default tactic. Make the other party aware that you know the intention behind the products, and that you would value them if they personally remove these variations from the agreement.

Negotiating a Deliberate Mistake

This tactic plays on your ethics or lack thereof. This tactic comes down to the ethics of your counterparty, and must therefore be aggressively guarded against when you suspect their moral standing or cultural preferences. You may be tempted with a contract or offering that is clearly to your advantage – contrary to your discussions. The risk lies in you’re eagerly signing before the other party realizes their error or omission, only to have this matter brought to your notice and corrected later on. We suggest you point out the slip-up or omission as soon as you notice it. This tactic, as with the others, has a way of boomeranging and will catch up with you in the medium to longer term.

Negotiation Planted Information

It is somehow human nature to trust what we have learned about the other party because of what they have said about themselves. It is chiefly for this reason that (friendly) mergers and acquisitions (M&A) are often only announced shortly before being agreed upon by the parties involved. The danger exists when the press publishes an unfounded and speculative article; thereby shooting holes in the trust that has been steadily building between companies and their shareholders. There are many case histories that have recorded how one side ‘leaked‘ information to the press in order to slant the M&A negotiation in their favor.

As far as is practical, research the information that is available, and withstand reacting in the moment. If you have a good relationship with the other party, you can save a lot of time by sharing the information with them, face to face while negotiating, and asking for the truth behind it. If they confirm the rumor to be true, ask for their sources.

Negotiation Withdrawal

Withdrawal comes in two main forms:

  1. Withdrawal of a previously agreed term or tentative agreement.
  2. Withdrawal from the negotiations altogether.

With the first, the other party will request that you retract their side of an already agreed tentative agreement. Be cautious by learning how circumstances have changed to warrant their changed need. Review your notes to see what you had promised to them, and remind them that you too will need to withdraw this item in return. Find out what interests they are looking to satisfy, and seek to create new options by negotiating creatively together. Corporate negotiations are characteristically highly complex – necessitating parties to sense when changes in circumstances demand a revisit.

You will need to judge as to whether the second is a tactic or an actual withdrawal. Listen very carefully to their wording to identify whether they are giving you a conditional withdrawal. “We are going to have to break off discussions with your insistence on a 50% share in this venture!” Here you are given the 50% share condition/demand to overcome, without knowing their underlying interest. Start by reiterating those areas you know that you both agreed upon. Your overarching reason for meeting, your sharing interests, and the areas agreed so far. Once you are both back in an agreement frame, ask them why they don’t want you to have a 50% share. It may be that in China the government controls joint ventures. Perhaps you can appoint the CEO while they appoint the Chairperson, and your decision-making procedures permit you to veto any proposals despite their 51% share. They get the public perception of control and you get equal say.

Philippe Lavie, president KeyRoad Enterprises LLC, dedicated to helping companies plan for, accelerate, and manage their revenue growth. KeyRoad training services help companies implement customized sales processes, messaging, and training programs designed to drive increase revenue and greater accuracy in their pipeline management.

Philippe Lavie, president of KeyRoad Enterprises, is based in Chicago IL and San Francisco CA. He can be reached at: 415-229-9226 or at plavie@keyroad.com

Rob Gullett is a Senior Consultant for KeyRoad Enterprises, LLC and CustomerCentric Selling© (CCS) based in San Francisco CA. He can be reached at:  (925) 330-7255 or by email at: robgullett@keyroad.com

Special gratitude to the following referenced authors, companies, and organizations:

  • CustomerCentric Selling©
  • “Getting to Yes” by Roger Fisher and William Ury
  • “Power of Negotiation” by William Zartment and Jeffrey Rubin
  • HBR and Harvard Business School – case studies on negotiations
  • Spin Selling© by Neil Rackham

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