Get Ready for Really, Really Tough Negotiations!

How to Prepare

Unemployment claims just skyrocketed to 3.3 million, the highest since 1982. Goldman is forecasting -24% GDP next quarter, and on and on. In a shrinking market, everyone is fighting for their piece of a smaller pie. What we’ve also seen in this environment is people “selling scared” and competitors buying business and behaving very irrationally.

Whether it’s new business or renewals, now is the time for increased negotiation planning. We’ve coached over 20,000 business negotiations worth billions over 15 years in 47 countries. We’ve learned a lot from this coaching and the impact of macro cycles (growth or deficit) on negotiation. The approach to negotiation in a deficit market requires a planning and execution cadence bordering on six sigma perfection. Negotiation planning is always important and the key driver of success. Now we need to take it to an entirely different level until things level out.

Our recommendation:

• Identify all high value or strategically important deals closing in the next 90 days
• Identify coaches and teams responsible for those deals
• Start a multiple round coaching cadence
• This includes an initial session on what we know and don’t know, and a plan to shore up what we don’t know
• Shortly thereafter, a follow up session to review what we’ve learned
• Plan our approach for our team (coach and rep)
• Plan our approach for possible escalation to leaders and other cross-functional deal approvers

What to focus on during coaching:

This is a very important step to implement cadence and rigor. To drive results, we need a tight process vs. each team focusing on their own idea of how to prepare for and execute negotiation. A haphazard approach is not scalable and doesn’t drive any organizational learning. We know this from the massive amounts of deal coaching we have done.

1. Focus on the impact to multiple stakeholders on the other side of the deal in the event we don’t reach agreement. (Note: This is #1!)
2. Consider the shield you have for price and other concessions is “how you meet client needs at higher confidence and lower risk than alternatives.” Without that, we are more likely to concede under pressure from buyers.
3. Invest your time to lay out what solution type you’re selling, what your customer's business needs are on this transaction, and who is their most likely alternative (named competitor, do nothing, substitutes, etc.)
4. Evaluate their decision criteria. If the various buying influences were making a decision to choose you or their alternative to you, what are the: hard and soft, costs and benefits, for the short and long term that they should consider.
5. This results in the 2-4 items that present the reasons why to choose you vs. the alternative. These reasons are in effect your value and will inform you how aggressive you can be on concession pressure and push back.
6. Prepare a quid pro quo trading plan because you are going to get concession pressure. Which commercial terms will get most pressure? Which value creating items can be “traded” to take pressure off zero sum concessions?
7. Prepare 3 paths forward for agreement, instead of just one. When presenting one option at one price it’s practically guaranteed you’re going to be asked to lower the price of that offer. When you prepare 3 different paths forward at three different investment and effectiveness levels, it changes the conversation significantly.

To really take this seriously, here is a link to an executive summary of my latest book to help bring consistency to your cadence. https://bit.ly/B2BStreetFightingSummary

We are aware this is a difficult time right now for our clients to make investments, especially in things that pay off in the longer term. Those are the type of investments to make in an expanding market. To that end, if you’d like some assistance in a very concise and cost effective solution that provides impact in the next 30-60 days, we have a complete and flexible virtual alternative for you. This virtual program offers:

1. On demand deal planning modules
2. Virtual consultant-led planning sessions
3. A combination of both

Negotiation planning has short term impact and will always exceed the cost of the initiative. We have documented 466% returns from multiple case studies. If we can help, please reach out. Stay safe everyone!