Quick Guide: When Can You Negotiate?
There are usually two schools of thought when it comes to negotiation. The first says “No! Don’t ask…you should just be grateful for what you’re getting.” And the second has the rallying cry of “Go for it! Take them for all they’ve got!”
And somewhere in the middle is the answer to our question: “When can I, and can’t I, negotiate?”
It’s not always crystal clear on when it’s appropriate to make the ask and try to improve a price, term or contract provision, but here are guidelines to use as your litmus test when getting ready to put your negotiation boots on.
Yes - Negotiate
When you’ve asked for something and the reason behind the ‘no’ is pretty weak. What’s a weak reason? “Because” “That’s how it is” “Everyone else charges less”
What to do: Ask some more questions to move past those answers (pssst…this is you negotiating!) Try asking for an explanation on the context of the rules that mean ‘that’s how it is’. Or for more details on what services are included in those oh-so inexpensive packages that ‘everyone else’ is offering.
No – Stop Negotiating
When you’ve asked for something and there’s an actual reason for the no. What’s an actual reason? “Our widget vendor increased prices by 3% this year, so we’ve had to adjust our own pricing.” “Due to insurance regulations, our facility isn’t able to host that many people.”
What to do: Respect this. You should ask some additional questions to look for potential flexibility on peripheral items, but your initial ask? Consider that ship sailed.
A Note On Peripheral Items: You’ll hear these referred to as ‘alternative currencies’. Basically, it all comes down to there being more than one thing that holds value in those discussions. Quickie example: Can’t get a lower price? How about improved delivery time? A longer payment term? A flexible return policy? VIP customer service? Performance guarantees incase something goes pear shaped? Ta-da! You’ve just gone from a Stop Negotiating to a ‘let’s try negotiating something else…’
Yes – Negotiate
When you have something of greater than or equal value to give the other person, and you’re coming to the table focused on building a relationship and getting a great result for BOTH of you.
What to do: Step 1 is to pat yourself on the back, because you’re coming at negotiation from the right place and this world needs more of that. Step 2 is to focus your negotiation efforts on discussion, communication and collaboration to figure out what will work best. Good, honest, constructive negotiation.
No – Stop Negotiating
When you’re being cheap. When you’re thinking about winning. Or beating the other guy. Or pulling the wool over her eyes. Not cool.
What to do: Take a step back and recognize exactly why you’re trying to close this deal or make the sale. Make note of the value you’re looking to bring you’re your own company. And then respect it. For more on this, check out my ‘Negotiating versus Haggling' post.
Yes – Negotiate
When you’ve asked for a few different things, and your client or vendor has been firm on everything. Absolutely everything. Everything is a deal breaker. It’s all firm and final. There’s not an inch to pinch at their end. Trust me – 99% of the time, there’s something that they can move on…you just need to figure out what it is.
What to do: Time for some sleuthing. Go back through the list of changes you’ve asked for, or items you’ve pursued. This time, when they say no, keep asking questions about why – and take careful note. Your job is to figure out which items seem to be the real roadblocks, and which are just the nice-to-have fillers. If you’ve got a good relationship, it may be as simple as asking “Hey – let’s cut to the chase. What are your 3 absolute non-negotiables?”… and then bringing them on board to work on the rest.
No – Stop Negotiating
When things have been going along merrily, and you’ve seen flexibility and collaboration on a bunch of items…and then it comes to a screeching halt. You’ve hit a roadblock (or a wall!) on a certain item.
What to do: Time to put on your thinking cap. Not to figure out how you can break them on this one…but to come up with ways that you can help them maintain it. Look back through at the other items you’ve negotiated, and check out those peripheral items – these are your puzzle pieces. How can you put this agreement together with those pieces, so that your client or vendor is able to retain this important element, and you’re pleased as punch as well?
When you hit roadblocks, do you try to bust through…or go around? Does it surprise you that I was humming ‘Should I stay or should I go’ while writing this post? Which of these scenarios ‘clicks’ with you?