Capitalize on Differences

“Capitalize on differences… smile when you are negotiating and you have differences with your counterpart.”  You will strike the best deals when you identify and quantify the differences in interests. Jeffrey Sanchez-Burks said it best in this 90 second video.

When you negotiate like a professional you use a process that includes identifying a wish list for your counter part. Professionals note and quantify these items. Ask a lot of questions, listen carefully, and concentrate on what the other party is trying to accomplish. You will uncover their wish list items. As the negotiation develops you have this list to choose from and may offer concessions. You will strike the best deal when you identify and quantify the items on their wish list. You can offer trades for items that cost you little [or nothing] and mean a great deal to your counter part.

If the idea of creating a wish list is something new for you. Consider using something like this negotiation roadmap to document and track your next negotiation.

Download RoadMap.

Start before their career begins

Great article from Fast Company on women and negotiations. I don’t like stereotypes. However, research shows women don’t negotiate for what they deserve. Read the article for how we can help raise the next generation of good negotiators who happen to be women.

 

Penny Rosema Makes Negotiation More Effective for Mercantile Bank

The staff at Mercantile Bank of Michigan has a new tool to make their jobs easier thanks to Penny Rosema. At two recent workshops in Alma and Grand Rapids, Michigan, Penny introduced the banking team the negotiation roadmap.

Employees of the bank negotiate every day, either with customers or vendors. Using the roadmap helps them do their research and develop a plan before the negotiation conversation begins. “[It’s] an easier, less painful process by having the roadmap prior to negotiation,” responded one employee.

Members of the banking team also found Penny’s examples of negotiation in action helpful – from contracts worth a couple thousand dollars to multi-million dollar deals.

With the benefit of knowing one of the most effective tools used by professional buyers and sellers, the Mercantile Bank team is now prepared to get more of what they want in their next negotiation.

It’s the direction that counts

Here is a good article posted on ProPurchaser.com. The author shares a personal example when as a professional buyer she asked for a cost reduction from the steel can supplier. Research had shown steel prices had fallen. The supplier had a ready reply. Have you ever had that experience? The author respectfully responded. A great example of understanding the negotiation from two views.

The short article also demonstrates ‘what goes around comes around.”

The Golden Rules of Bidding

Why would the most high potential supplier turn down the opportunity to participate in the bid?  I had a multi-million dollar global contract and the company we identified as the most promising supplier declined to participate.  Why?  Because they understood the bidding process and the total cost to participate.

Bidding’s Golden Rules by Emma Jaques offers the reader valuable insight to the bid process.   She demonstrates that developing a worthwhile bid is time-consuming and expensive.  She advises suppliers to avoid stepping into a competitive bid process designed just to squeeze cost reduction from the existing supplier.

Here are Emma’s Bidding Golden Rules:

  1. Look for opportunity – This requires energy and an open mind.
  2. Don’t bid for everything – Be selective about your choices.
  3. See things from the buyers’ perspective – focus on their priorities, not yours.
  4. Prepare your bid theme and executive summary first – This sharpens your thinking about the overall project.
  5. Look for showstoppers – Failure to address them goes ill.
  6. Answer all the questions – Be obsessive about detail in your proposal.
  7. Answer the questions the buyer is actually asking – Be a detective.
  8. Engage, influence and persuade – Develop and exploit buyer personnel contracts.
  9. Ascertain your price and know its value – Be upfront with realistic price.
  10. Follow the buyer’s rules – Go along or you won’t get along.
  11. Use case studies – If you have experience, show it.
  12. Be organized – Stay on top of bid-writing personnel and tasks.
  13. Learn and improve – Analyze your experience with wins and losses.

 

A successful bid opens doors to a long-term relationship.  Pay attention to all the steps that come before and after submitting a bid.  For more detailed discussion consider Emma’s book which includes tables, charts, tips and rules.

You might be wondering “what was the result of my multi-million dollar global contract?”  We learned a valuable lesson as buyers about the value of fair and competitive bidding.  We took extra time to ensure participants this was not a game designed to squeeze the existing supplier.  In the end, that reluctant high potential candidate was the best fit and won the contract.  A big win for both of us.

Don’t Fall in Love… with your assumptions

It’s important to have a plan.  It’s important to have assumptions.  Just remember your assumptions are wrong.  Wait…not all of them are wrong.  The problem is you don’t know which ones are wrong.  So don’t fall in love with all of them.  Successful negotiators understand it is a process.   Michael Wheeler describes it as learn, adapt, influence.  You can learn more about his strategy from his book “The Art of Negotiation” or watch this short video.

As you prepare for your next negotiation take time for research, to understand your alternatives, and make a wish list.  Next make careful assumptions about your counterpart on each of these same categories. Just remember the more effort you put in, the more seductive they become and the harder it is to emotionally disconnect.  Make your assumptions just don’t fall in love with them.

Don’t panic at a deadline!

Are some deadlines padded? You know it!  Wouldn’t it be a shame to negotiate a poor agreement because of a false or negotiable deadline? The best defense with dynamite and deadlines is to proceed with caution.

Test deadlines imposed by the other party. They are probably negotiable. Don’t let deadlines hypnotize you into making premature decisions. Yes, some deadlines are real. That’s when your research, and sound business judgment comes in.

Read more about deadlines and how the buyer and seller use them in the September blog by Karrass.

Negotiating with Emotion

Here is a great article by Kimberlyn Leary, Julianna Pillemer, and Michael Wheeler. The Harvard Business Review magazine posted this article earlier this year. “Negotiating with emotion” is worth reading for anyone that has experienced tense emotions in a negotiation. http://hbr.org/2013/01/negotiating-with-emotion

I especially liked this comment section where Ruben Terminasian wrote:  “In order to stay cool during tough negotiation professional negotiators often recommend to look at the emotional level of the counterpart. This is indeed a good advice as it keeps your ego busy watching the other persons’ ego. The effort always pays back. After all, people most likely will forget what you said or even did, but they never forget how you made them feel.”