Don’t you love multiple choice questions? The answer is already there. All you need to do is pick it.
A huge mistake I see negotiators making in the early stages of a negotiation with a software vendor is that they go into the first negotiation with a bullet list (often on a PowerPoint slide) of specific items they want in an agreement. The answer to which is typically either yes or no. This makes it very easy for the supplier to reject your demands with a flat “no”.
Lists of specific “asks” have their place, but it pays to be much more indirect in the early stages of the negotiations.
Starting the Negotiations with a List
The PowerPoint slide might list stuff like:
- A dedicated Technical Account Manager (TAM)
- 60 day payment terms
- X% discount on future purchases
- Removal of the right for the software vendor to audit
If you go into a negotiation with this list of “can we please have” items before you have received the suppliers first proposal, you are setting up the wrong dynamic. Any proposal from the supplier is likely to be a rebuttal of the list you have just provided for them to shoot at. You will end up spending a lot of energy trying to justify why you want those things, and you will never get more than the specific things you asked for.
In the early stages it is far better to talk in more vague terms about things that are not working currently. Explain to them all the difficulties you are having to increase the usage of their software within the company because of technical issues. Make it real by giving examples of a competitor’s software products being adopted due to difficulties in dealing with the technical support side of the software vendor’s organisation. Get the salesperson to agree with you through these stories that this is indeed an issue, and let them accept (on their own initiative) that this is an issue they should try to resolve. Let the sales person come to the conclusion on their own that you need a dedicated TAM.
What Dynamic is Being Created in the Negotiations?
In the example above, if I ask for a TAM in a bullet list at the start of the negotiations, and I get it, what has just happened? I asked for something and the supplier conceded. In the negotiation dynamic I “owe” the supplier something in the negotiations. On top of that, I had no idea what the supplier might have proposed if I had let them come with their own proposal. I asked, I got, I owe.
But if you describe the problem and the supplier comes back with a proposal to provide a dedicated TAM as the solution, then a) it is a far less confrontational approach which allows space for further collaborative solutions as the negotiations progress, and, b) the supplier has proposed something which you can now poke at (you can raise the bar by demanding that it be at no additional cost, or that you need a TAM per region). In negotiation this is called “bracketing” – letting your opponent make the first proposal then making a much more aggressive counter proposal.
Dancing The Negotiator’s Dance
All this is part of the dance negotiators do in the early stages of a negotiation. Trying to get a feel for what their opponent might value and might accept. Experienced negotiators will keep their cards close to their chests, especially in the early stages.
For inexperienced negotiators this can raise the fear factor. They want to inject some certainty into the negotiations. Maybe they received a list of asks from business stakeholders and they want be able to show a paper trail back to those stakeholders showing that these demands have been requested.
My advice would be: keep it vague, let the supplier do the work of thinking up solutions to problems. Then elaborate on whatever solutions the supplier might propose.
Image credit: “Cliche photo of a bad poker hand” by Benjamin Lim, Flickr.com