Unless you can read your customer’s mind like Dr. Xavier, you’ll have to rely on other skills to avoid being taken advantage of during IT negotiations. If you’re not careful, your approach will lead to one of two results: you lose the business, or win but leave money on the table. As a lawyer for IBM and Thomson Reuters, and as a purchaser for numerous billion-dollar corporations, I’ve negotiated for 25 years on both sides of the table for large IT acquisitions and sales teams. And I’ve seen negotiators crash and burn by making these self-destructive mistakes:
You’re negotiating for a big company, and your attitude is, “Hey, we’re great, and you’re stupid if you don’t pick us.” No one wants to do business with someone like that. The customer expects you to be arrogant, and you confirm their bias. Imagine how they’d react if you surprised them with some humility.
2 Acting Like a Robot
You’re not a machine, and neither is the customer. It won’t kill you to act like a human, and you may even enjoy it. Instead of getting right down to business, ask them about their family, where they grew up, what they do for fun. It’s a small thing, but you’d be amazed at how some friendly chit-chat at the beginning of negotiations will help you get what you want at the end. They say once you learn how to fake sincerity, you’ve got it made. Not true. Real sincerity and interest in another person will serve you well. Remember, if you do this right, your customer will buy from you again and again. It’s not a one-shot deal.
3 Acting Like a Used Car Salesman
There is nothing weaker than a salesperson who repeatedly says, “I think we can agree to that price (or that term), but I have to run it past my manager first.” It sounds like you’re buying a car, and soon they’ll ask you to add floor mats and undercoating. As a seller, go into the negotiation with a bottom-line price or set of business terms in your head, knowing you can make decisions up to that threshold. Otherwise, you may as well bring in the decision-maker early.
4 Stepping Over Your Line in the Sand
Never say, “This is absolutely my best offer,” unless it is. Once you lower a price you said you could never in a million years lower, you are at the mercy of the negotiator (and customer). Forever.
5 Filling Every Silence With Talking
“The next one to talk loses,” is a common negotiating maxim. Sometimes, it’s better to say nothing, and wait to see what the other person says, especially when the silence becomes uncomfortable. The customer may be ready to say “OK, I’ll buy,” but you keep talking until you’ve talked yourself out of the deal.
6 Trashing the Competition
You know how your mom said, “If you don’t have anything nice to say about a person, say nothing?” Well, that works in business too. The moment I hear trash-talking about a competitor, I have serious doubts about the ethics and professionalism of the negotiator. Long-term relationships don’t start there.
7 Being Afraid to Walk Away
Everyone wants to hit their number for the month, the quarter, the year. You always want the deal, right? But if you sound desperate, the customer will surely smell blood; before you know it, you’ve made huge concessions. Be willing to walk away – not fake walking away like you’re buying a rug in Marrakech – and you’ll either get the deal you want, or avoid a poor deal for your company.
Are there only seven big negotiating mistakes, you ask? 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 Crow retired from practicing law after 25 years as in-house counsel and legal consultant to major corporations in the software, finance and shipping industries, including IBM and Thomson Reuters. 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.