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Most business owners and executives are competitive, and when negotiating, they may claim their goal is to achieve a “win-win” deal. However in many cases they often try to make their counterpart “lose” in order for them to “win.” To be a great negotiator achieving a “win-win” deal through collaboration as opposed to competition is always the best solution. This is especially true, if you’re going to continue doing business together.
Even when negotiations are entered into with good intentions, typically your counterpart wishes to see you “lose” on some level; and there’s probably a part of you that feels the same way about them. According to Dr. Michael Leimbach, Vice President of Wilson Learning Worldwide, a global research and development sales training firm, the best way to change this mentality is by “increasing the size of the pie.” The way you do this is by expanding the deal and including items that both parties want. There may be things that you may not have identified, but that you come across as the negotiation takes place.
Here are five simple steps to consider when negotiating with your MSP or client. These may help you achieve “win-win” deals more often:
1. Sit on The Same Side of the Table.
This can be taken physically and metaphorically, because competition is automatically created when you’re sitting on opposite sides of the table. Often, in business situations, people who are working together will sit next to each other in order to share their knowledge and reach a higher level of understanding together. Therefore, your physical position can actually help both parties work towards their mutual goal of achieving a “win-win” deal.
2. Always Address the “Why” Behind the “What.”
Attempt to understand the logic behind every negotiating position. This will allow both parties to decide on an alternative solution to the original problem that created the position. For example, if your client asks you for the lowest price deal, instead of digging deeper into what they’d like, look into why they’re asking for this particular thing. You could discover the real problem.
Suppose the real problem is lack of cash flow in your client’s budget. By understanding this, you may be able to work together to help your client minimize the effect of an immediate purchase with limited cash flow, and help them find a strategy to meet your higher price.
3. Depersonalize Your Position Into Problems.
Using expressions such as “my firm’s position is” or “my position is” makes the position a part of your identity, which ends up making it hard to change or abandon that position because you’ve taken ownership of it.
Instead of owning a position, showcase it into a problem that both you and your client can solve together. The idea is to turn negotiations into problem-solving sessions where you’re helping each other instead of butting heads.
For example, you can try something like this: “Crafting our arrangement like this: [idea] would work really well for me, would that work for you as well?”
4. Produce Objective Standards.
Define the guidelines of your agreement by introducing independent facts; these will help you avoid competitive negotiating. Facts may include services, priorities, responsibilities and availability for both parties.
It’s easier for both parties involved in a deal to evaluate an idea or proposal if they’ve agreed on the same standards. For example, if you’re trying to demonstrate that the price of your service is a good deal, then an independent standard such as price/market value can help reinforce your position.
5. Be Sure to Have an Alternate Plan.
If you and your client can’t reach an agreement, it’s a good idea to have a backup plan that can be put into place during the negotiation. This is referred to by Dr. Leimbach as a BATNA: “Best Alternative to a Negotiated Agreement.”
This would come in handy if you’re working with a potential client and they simply can’t pay you enough in order for you to make a profit. Your BATNA could be to maintain contact with this potential client and try to find future opportunities to work together.
A good BATNA will free you from the perspective that you have to close the deal, instead you can negotiate without the fear of “losing” the potential client.
Still having trouble negotiating a deal with your prospect? Schedule some time with Ulistic’s MSP Coaching Services and learn how to negotiate and achieve a “win-win” deal every time.
Call: 716.799.1999 ext. 102
Stuart Crawford serves as Creative Director and CEO with Sebring, FL and Fort Erie, ON-based Ulistic, a specialty MSP Marketing firm focused on information technology marketing and business development. He brings a wealth of knowledge and experience pertaining to how technology business owners and IT firms can use marketing as a vehicle to obtain success.