Negotiations are the toughest part of the marketing business.
Whether you’re negotiating a new contract, your salary or even a merger, getting everything to work out in your favor is never easy. How often do you hear someone say, "I got everything I was asking for… and more"? In fact, even reading that line someone just won the lottery (it’s not something you hear all that often). There’s an old saying in real estate that the best deals are those where the buyer feels like they paid more than they should have for the house and the seller feels that they got less than what they were asking for.
There are a few things to think about prior to the negotiation that will affect the outcome.
I’ve had the pleasure of sharing the stage with Herb Cohen on more than a few occasions. Cohen is widely regarded as one of the best negotiators. He’s written a few books on the topic (You Can Negotiate Anything and Negotiate This!). One of his main themes to a successful negotiation is caring. He says: "You have to care… really, really care… but not that much." His point? You have to be willing to put everything you have into a negotiation, but you also have to be willing to walk away from it. If you’re not willing to walk away from it, it’s not a negotiation.
Finding your bottom line in two-parts:
- Non-negotiables. You have to choose the components of the negotiation that are truly non-negotiable to you. If, at this point, everything is non-negotiable, you may be better off looking for another deal that doesn’t involve any form of negotiation. Meaning: haggling is a part of business, so you’re better off setting up the rails (the unmovable ones) well in advance. The important part here is that the prospect should not know which parts of the negotiation are the non-negotiables. This gives you play room. One commonly-held belief is that price should never be negotiable. In fact, I would argue that in setting up your rails, never make price a non-negotiable. That sounds crazy, but if you demand other things but are flexible on price, this demonstrates to the prospect that you are negotiable, simply because the overriding assumption is that price is always the hardest thing to negotiate. When I do speaking events, one of my non-negotiables is how I fly (it must be business class and a member of the Star Alliance family on flights that are longer than two hours). Some see this as me being a snob, that’s fine. The truth is that I spend a lot of time in the air and being comfortable is key to both my physical and mental health. I’m of no use to anybody if I’m constantly getting sick and I’m tired when I arrive to speak (or come home). People are spending good money to come and see me speak, and I need to be at my best. With over a decade of constant travel, I know my body and being comfortable during the travel portion is paramount for me. When someone asks for me to fly coach, it’s a non-starter, but because I have rails, there are other components that are negotiable, so my class of flight has never been a contract ender. You have to be strong with your non-negotiables because the minute you break down and say, "fine, this one time…" it’s over.
- Desired outcomes. Prior to negotiating make a list of five desired outcomes that you would like to have happen in a perfect world. It can be anything from price, to length to engagement to deliverables. Be very, very specific here. Write the list down, memorize it and hide it in a safe place. Once you get your final offer, compare it to your list of desired outcomes. Is it a perfect match? I doubt it. But, that’s the point. Remember, this was called "desired outcomes" not "perfect outcomes." If the final offer meets three out of your five desired outcomes, my advice is to move the deal forward and make it happen. Your desired outcomes were a "perfect world" scenario and there is no perfect world. It will be hard to get to – what I call – The Meat Loaf Scenario (aka Two Out Of Three Ain’t Bad). Have five desired outcomes and getting three out of five makes it a "win" for you. The last tip, is that you shouldn’t create your desired outcomes list knowing that you’re going to accept three out of the five. Assume you’ll get all five (just play along at the beginning), because you don’t want any one desired outcome to have more weight and balance than the others (so make them all of equal importance). It always fun to look back and see which out of the three made it through.
The great philosopher, Kenny Rogers, once said, "you’ve got to know when to hold ’em, know when to fold ’em, know when to walk away and know when to run." Walking away from a deal is the hardest thing. I believe that most people wind up in bad deals because they didn’t do their homework. They didn’t define their non-negotiables and they don’t have their five desired outcomes. I walk away from deals all of the time, simply because they were deals that weren’t fair. I believe that negotiations are easy when the people negotiating know that one party is delivering a service of value while the other party is happy to pay for that service. The chasm is usually smaller than people think and it’s usually the ego that gets in the way. Walking away from deals is easy for me because with the two-step process defined above, I can remove both the ego and emotion.
What are your tips for getting what you want?