To recap, our first seven bonehead negotiating mistakes were:
2. Acting Like a Robot
3. Acting Like a Used Car Salesman
4. Stepping Over Your Line in the Sand
5. Filling Every Silence With Talking
6. Trashing the Competition
7. Being Afraid to Walk Away
Here are the next seven mistakes you should avoid if you don’t want your customers to take advantage of you during IT negotiations:
Forget to Ask Where It Hurts
Before you can “ask for the sale,” you have to be a good listener. Pretend you’re their doctor, and ask them, “where does it hurt?” Uncover their pain points, unearth their bottom line, understand what they really, really need. Only then will you know how to structure your negotiation.
Get Hung Up on One Contentious Issue
Negotiations get derailed early when the parties are stuck on one contentious issue. You can only beat that horse so much. If you’ve spent more than 10 minutes on an issue without any movement, just table it. Move on to other items more easily agreed, and circle back to the difficult issue. By that time, the customer may be more conditioned to say “yes.” Or maybe you’ll find another issue you can bend on as a trade.
Give Artificial Deadlines
Common negotiating theory states setting a deadline gets everyone focused and more likely to make concessions. “If we can’t finalize this by June 30, this price is off the table.” Don’t say this. The customer KNOWS they’ll still get that price on July 1st, even if it means you’ve missed your number for this year. If June 30 is important to you, there are other ways to get there without looking desperate. And once you look desperate, game over.
Focus on Price
If price is everything, you have nothing special to sell. Telling the customer you are the cheapest in the market is a race to the bottom you don’t want to win. It seems counter-intuitive, but a higher price can be an advantage – if you frame it correctly. Most of your focus should be on your solution, the pain you can relieve. Then your premium pricing seems like good value.
Let the Buyer Control the Contract
No customer wants to sign your standard contract without negotiating changes. The trick is to keep that to a minimum. Massive changes mean you’re giving up more than you want, and spending too much on legal. By giving your standard contract to the customer in editable form, you’re inviting wholesale changes. You’ll get back a contract with so many changes the whole document is red. This is impossible to manage, and requires negotiation of every comma. Instead, present your .pdf standard and invite your customer to a conference call where you’ll discuss high-level issues. And offer to have YOUR lawyer make the agreed-upon changes.
If you agreed to make a change to the contract while negotiating, be sure to reflect that change exactly as agreed when you revise the document. Ensure every change shows in track changes. Don’t add in anything new that was never discussed. If you try to be sneaky, try to slip in something they might not notice, they WILL find out. And then you’re dead.
Sign It Without Reading It
This one is so obvious it shouldn’t need repeating. But unread contracts are signed all the time. “I was in a rush.” “It’s probably all OK.” “I trust the other guy.” A year down the road, when one of those unread terms comes up and bites your behind, you can’t say, “It doesn’t matter what it says, that’s not what I meant.” This isn’t strictly a negotiation strategy, but how can your negotiation be considered a success if you don’t know your contractual obligations?
After two blogs, we’ve now been through fourteen bonehead mistakes. That must be all, right? Of course not. There are as many negotiating mistakes as there are stars in The Cloud. Stay tuned for the next seven. And the next seven….
Bill retired as a lawyer after 25 years as in-house counsel and legal consultant to major corporations in the software, finance and shipping industries. When not snowboarding or playing hockey, Bill currently negotiates IT contracts for one of the world’s largest restaurant chains, and acts as Neural Impact’s Chief Negotiation Officer.