When a 'No' Is Not a 'No'

Last month I began this series on negotiations by asking lawyer Deanna Brown, counsel to Hallstrom, Klein & Ward LLP and senior corporate counsel for Skyworks Solutions, a few questions that I thought might benefit my readers. Coincidentally, I find myself in contract negotiation with my new book publisher. Brown's advice to be willing to walk away is the most powerful thing I keep in mind during these contract negotiations. I also have a back-up plan, meaning I've already contacted other publishers. And before I began the conversation with my preferred publisher, I asked, "Are you willing to negotiate this or not?" Being direct in business and life will always give you power. The following is a continuation of my conversation with Brown:

WomenEntrepreneur.com: Does negotiating start in the sales process or after the deal has been sealed?
Deanna Brown: Setting expectations during the sales process is a key part of negotiating a deal. Many aspects of a contract, such as pricing and delivery terms, are often negotiated in the early stages of the sales process. This makes it much easier to work through other contractual issues. That being said, sales professionals need to make sure that they correctly represent their role in the decision-making process. I've been involved in many negotiations where the other party is frustrated because their sales representative promised them certain terms that aren't acceptable to the sales manager or company CEO.

Why is it so important to make sure you're talking to the decision-maker?
Brown: Rather than spend large amounts of time negotiating with a person who isn't empowered to close the deal, it makes sense to find out who has the decision-making power for the transaction before negotiations begin. Many large companies will insist that you initially negotiate with a junior member of their business or sales team. If this is the case, the junior team member may be empowered to make decisions on certain issues, but you'll need to encourage him or her to quickly escalate other issues to a more senior member of the company's sales or business team.

If there is more than one decision-maker in the deal, you should try to get them involved in the negotiations as early as possible. Even if they aren't willing or able to attend initial meetings or join conference calls, you can keep them in the loop by sending them issues lists and meeting summaries.

What can you do when told "no" in the final stages of a deal?
Brown: Many times a "no" in negotiations is an invitation to negotiate. In some cases, however, representatives of the other party truly may not have the flexibility to compromise further on a particular issue. If a key issue is at stake, I try to escalate the matter to a more senior member of the other party's management team to reach a compromise that works for both sides. If no compromise is possible, you must evaluate whether or not it's a show-stopper for the deal. If not, then it's often possible to use the issue as leverage to negotiate other key issues.

For example, I recently worked on a deal where the attorney for the other party refused to budge on the warranty terms associated with a particular part. Although my client was concerned about the warranty terms, she decided to give in on this point in exchange for obtaining a significantly lower price on the part.