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.