A little negotiation strategy

Almost everything in business relations comes down to two tensions: building relationships, and getting results. If you focus too much on building relationships, you tend to avoid conflict and don’t achieve objectives. If you focus too much on getting results, relationships suffer and you don’t get long-term results (since people will be cautious with you).

Of course, you have to know when to focus a bit more on relationships and a bit more on results.

For instance, I’m working with a product manufacturer now for one of my sites (http://www.momsonedge.com). The manufacturer has — 2 days before delivery of product — insisted on a price increase. He claims that the product was harder to make than he thought, despite months of comments by me and a contract.

At the same time, he has delivered some good product and has been good to work with.

So I’m pushing a bit on the “results” side now, telling him that his request is inappropriate, and why, and threatening to go to another vendor with more competitive pricing if he continues to insist on higher prices.

This constant balancing of results and relationships comes up in sales, project management, negotiations — really any kind of business relationship.

I hope you manage the balance correctly!

In my experience, a lot of technical people tend to avoid conflict, or even run from it. So they have inauthentic relationships, and don’t push enough to get the results they want.

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  • mhdoc

    I despise that kind of negotiation; I always loose. I find the webpublishing business model wonderful because of the lack of exactly that kind of requirement.

  • Dr Livingston

    i don’t have the time nor the patience to negotiate. i give a quote for a project and a probable time scale and if the client is happy with that then great.

    if not they can go elsewhere – after all there are other businesses out there who will benifit – proberly more so – from my skills.

    i don’t have the time for those who are too tight or are to ignorant to budget properly. it annoys me.

  • shadowbox

    There’s always room for negotiation – not backing down though, but you need to understand where some people come from and the way their minds think.

    With some people, I tell them the price and they accept. With some, they expect that the price I give them is an over-quote and something that can be bargained down. I refuse to drop prices for no reason, so make it clear that my prices stand, but at the same time offer to sit down with them and examine the project spec to see where we can trim the spec down a bit without adversely affecting the effectiveness of the site.

    The same goes with any aspect of contract negotiation. I love it when I tell people how I expect everything to be done and they happily accept, but this isn’t always the case as sometimes they have very set procedures in place that they expect me to conform to if we are to work together. Hence we have to negotiate an equal and fair compromise in which both sides give a little.

    But you need to know when to put your foot down – I recently found a client quite unwilling to compromise over a deposit I was due from them (the old 30 day accounting period thang – fine, but they wanted me to start work while I was waiting for the deposit to arrive which is not the way I work – bear in mind that my proposal had clearly stated a deposit was required). It got to the point where I realised there were actually unwilling to compromise at all on this and in the end I told them to stick their contract where the sun don’t shine . There then followed a big round of apologetic phone calls and grovelling emails from them and we finally reached a satifactory compromise.

    Some people like to see how far they can push you, some people are so used to having things done their way that they are oblivious to the fact that there may actually be another way of doing things. Some people like to be told exactly what to do. You just need to ensure throughout that your negotiations you are clear with your client (and yourself) about what your procedures are; be firm but fair and be willing to consider compromises in the right situations.

  • http://www.tpdevelopment.com.au ricktu

    Thats was a good post Shadowbox and I wanted to emphasise on of his points. A couple of times recently I had clients who complained about the cost of my quote and rather than reduce it sat down with them and went through it in detail to see where it could also be trimmed to lower the cost. The end result was the client actually realised how much work was involved and that what they were getting was actually more than reasonable. And both times the clients decided to leave the quote as is.

    Richard.