B2B Street Fighting Blog

negotiation training: important considerations for trading

Posted by Marie Dudek Brown on Tue, Jun 05, 2012 @ 04:33 PM

negotiation training: important considerations on tradingIt's key to remember there are multiple people on your side of the deal and multiple influencers on the customer's side of the deal, all of whom have trading items of interest.  Rarely do they have all the trade data handy in one place.  By thinking through many of the deal items in advance, you can literally take proactive control of the business negotiation.  Even if you're only 50% to 60% accurate, you still will likely have more data than your customers or competitors.

The well-seasoned negotiator understands that his goal in fact should be to create joint value; trading allows this to happen.  For example, if the buyer places great value on direct store delivery and the seller already has a route that cover the area, the seller can provide the service at very little cost.  He can easily trade this item for something that the other side controls, such as a higher price or less stringent service requirements.

When one of our technology clients begain trading (as opposed to giving away stuff for free) with one of the most difficult hardware manufacturers in the business, it was a shift from 20 years of doing hundreds of millions of dollars of deals together.  When this deal was over, the customer asked our client, "What was different this time?"

In reply, our client asked, "What do you mean?"

The customer replied, "You usually roll over."

So you see, even long-term buyers with legacy issues (my client called this a euphemism for "We always rolled over in the past at the end of the deal to close it."), we can change behaviors on both sides of the deal.  The customer in this situation felt the full impact of our client's use of Consequences of No Agreement (CNA) analysis to shed light on the real alternative and, after readjusting the power a tad, start trading.  The customer did not dislike this new approach and, in fact, seemed to express a little more respect for this new, fact-based approach.  The customer felt reassured that the supplier was not lying or sandbagging him, but rather was dealing with facts.  As a result, trust increased on both sides.  Don't get me wrong:  these deals are still brutal, but now they're more fact-based and more balanced in power and profits. 

What this means in practice is that more psychological approaches to negotiating -- understanding how seats should be arranged at the table, what different personality types will do during a negotiation or even how culture affects who asks for what -- become far less important when you have a firm process in place for understanding and analyzing the deal itself.

 

 

 

 

 

Tags: business negotiations

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