It was the start of a critical negotiation. The other side responded to our proposal with a counteroffer that was insanely low. I could have gotten mad. Instead I said: “I love it!”
Why?
Keeping your cool – even having a little fun – helps you get a good result from a negotiation by helping you be creative.
Creativity can get better results for both sides because it lets you approach the negotiation as a joint problem solving exercise.
But let’s be honest: It’s VERY easy to get frustrated. In this deal, the sales rep on my team had done fantastic work with the account for months and now his revenue was getting called into question.
Getting mad would be totally natural.
But why not appreciate the other side’s strategy instead of getting pissed? Why not say “I love it!” instead of “Take your offer and shove it up your &*(Q!”
After all, they have a job to do too. And sometimes they do it well.
Appreciating their strategy keeps everyone calm and open so we can be creative.
What other conditions need to be in place for a creative negotiation? Here are three:
First, your counterparty needs to be thoughtful and empowered.
This isn’t always the case. I negotiated with a junior procurement person once who could repeat their side’s position over and over but lacked the ability to consider alternative solutions.
I had to get someone else to take over negotiating for their side before we could be creative.
In this negotiation we were negotiating with the buyer’s CFO. He was a sharp guy and he had the final say.
Second, you need multiple dimensions to negotiate over and you need to have different top priorities. That lets you make a trade where each side gets what they most want.
Imagine that we’re dividing up 100 apples and 100 oranges. We’ve got two dimensions: the two kinds of fruit.
If I love apples and you love oranges, I can let you have all the oranges in exchange for getting all the apples.
We both walk away happy.
This isn’t always the case. Sometimes the only variable to negotiate is price per unit. In that case, put your dukes up!
In this negotiation, we had multiple dimensions: (1) the price per unit, (2) the number of units purchased, (3) the timing of the deal.
We also prioritized different things. They cared most about the price per unit. We wanted more units (for a larger total deal size) and to get the deal done this quarter.
There was a deal to be done!
Third, you need to be able to talk about your business interests and theirs. That means explaining why you’re flexible on some things and not others and why your proposal gets them what they most need.
In this negotiation, we had to explain why we could cut the unit price but not match another vendor’s price. Our value was different and our costs were different too.
The CFO understood our position and realized that we could all walk away happy.
Win-win. We all loved it!
- - -
If you liked this article, have a look at video series on Building Your Startup Sales Process to see how to define your value Themes and then use them to build the critical sales conversations that your sales process depends on. You can also check out the P.S.I. Selling Content Page for more insights on sales communication, strategy, and leadership.
Want to build a sales process that proves value and a team that can execute? Have a look at our services and get in touch.
For more about the author, check out Mike's bio.