This is a follow up to a previous post Three Ways To Make Contract Negotiations Easier where I explained how important it is to know your contract when involved in negotiations.
In the post I discuss three key areas to be successful in negotiating on your agreement: (1) Know common redlined items, (2) what you can’t negotiate on, and (3) what you can.
Today I’d like to talk about a fourth key area that applies to contracts and any negotiations anywhere, anytime.
The idea is simple but for some reason, I don’t see it utilized as often as it should be which is in every single negotiation every single day.
The concept: never, ever negotiate on a single concession. ~Tweet this!
Depending on your product or service there are usually a few areas that will come up in negotiations. Joel Peterson, Linkedin influencer and Chairman of JetBlue Airways, recently wrote a great piece Negotiate Great Deals, Without A Fight where he defined those areas as price, terms, time frames, representations and warranties, and remedies.
You may have more, you may have less. The point I want you to understand is that there will always be more than one area to negotiate on. Because of this, you should never allow negotiations to be centered on only one area.
No person or business makes a buying decision based on a single aspect so then why would you allow negotiations on only one?
Price is the most common example. If you are negotiating the only price then there are two directions it can go. Up if you are in control or down if the client is in control. This is not a good place to be because you have no place to go but down in most cases.
The way to avoid this is by bringing another concession into the mix. For example, when selling my software, a time frame is a common addition to the conversation when the price comes up. The longer the term, the lower the price. A win win for both parties because they get the software they want at the price point they want while we get a happy customer for a predictable amount of time. This not only means revenue, it means revenue we can expect and budget with.
By controlling the conversation and not allowing only one concession to be discussed you spread out your risk of a bad deal happening.
~ Johnny Bravo