Moving Too Fast
In less than an hour the vendor discounted their price by 20%! I wish I could tell you it’s because I’m just that good (said with lots of sarcasm) but I literally had done nothing except ask a few questions and told them, “we need to think about it”. Little did I know that was the start of the end.
We were in the midst of negotiating a new contract with a new vendor for services we’ve never acquired before. Our knowledge in this space was limited so when we got the first proposal, we didn’t know how to evaluate. We had no idea if it was a good offer or not. Therefore, we followed the same advice we’d give others and that was to ask questions about the proposal. Our job at this point was to just be able to understand what’s been proposed. Everything from how they derived the quote to what were the drivers of price.
We teach negotiators to ask questions about the proposals they receive. Even if you are extremely knowledgeable about the good or service you are buying, you need to understand the other party’s logic and test your own assumptions. It also gives you the opportunity to figure out if there are any areas of flexibility that you could pushback on. Armed with that information, you can make better decisions or counter proposals that address everyone’s issues.
In the case of this negotiation, within the hour of our Q&A session they came back to us with an “even better offer”. I guess they had no idea of how that might look to us. When someone comes back with a better offer that quickly or without provocation, it tells me they are highly motivated to do a deal and there’s plenty of flexibility.
Armed with the information from our Q&A and the signal of flexibility, we made a counter proposal that included additional asks as well as a further reduction in price. Ironically, like many untrained negotiators we see, they did not ask a single question about our counter proposal. They didn’t take the time to figure out why we had additional asks or why we wanted a further reduction.
In the end, it worked out to our advantage. Our deal had literally everything we wanted at a ⅓ of the price of the original proposal. That said, we did do this deal in a way that everyone was happy with the deal. I could have pushed for a lot more but there’s no need to spend the extra time and risk jeopardizing a new relationship.
I’m sure at some point they may read this article or realize what we do for a living and will ask for advice. When they do, I will tell them:
In the end, don’t be too quick to propose, no matter how bad you want the deal. Even if there’s not a lot of time to get to a deal, take the time to ask the questions and learn. What you learn will create better deals for you, every time.
Be Patient - We Got This
We can help you keep your own demons at bay. We can be your advisor, we can be your coach, and we can be your trainer. Whether you bring us to create your strategy, or help you prepare, or develop your team’s negotiating skills - we can be your secret weapon at the negotiating table.
We’ve been consulting and teaching our proven negotiation methodology for over 40 years. We know the process, we can identify the skills required, and we have the techniques to negotiate better deals for you. Don’t believe us? Call us and let’s discuss what we might be able to do for you.
About the author:
As an entrepreneur, business owner, and Fortune 500 business executive, Brian has spent his career building winning teams and driving successful companies. Brian has spent the last 20 years within the marketing and advertising industry developing successful consumer engagement marketing strategies for trusted brands such as Google, Amazon, Samsung, Virgin Mobile, Microsoft and Sony.