By Marty Finkle, CPT
If you're a David—a smaller company negotiating with a corporate Goliath—don't let fear dictate your decisions, because you could get swallowed up and be forced to do something that could hurt your firm in the long run. To help create a level playing field, practice strategic negotiation skills that will lead to more favorable outcomes.
Understand the company’s perspective
Especially with large corporations, you need to understand the key issues from the other side’s perspective and map out your own. If you can figure out your issues, intends, musts, wish-list items, concessions and questions to be answered, you gain power in the negotiation--and can guide the discussion. The questions to ask:
- What are your intended results?
- What are your priorities for this agreement?
- On what terms can you be flexible?
Pay close attention to their answers, and, at various points during the negotiation, summarize their point of view out loud to ensure there are no misunderstandings.
Make the first proposal
Don’t wait for this big company to come up with a proposal and be forced to consider their terms—and possibly lose power for the rest of the negotiation process. For example, if, you find out that this l corporation wants to pay you for services 90 days after billing instead of the customary 30, don’t react with an argument. Instead, propose these two options:
For payment within 90 days
We'll add a 5% upcharge to our fee.
If you pay after 90 days, finance charges (equivalent to prevailing credit card rates) will be retroactive to the first day.
For payment within 30 days
Payment will be due 30 days after receipt of the invoice instead of immediately upon receipt.
All upcharges and finance charges will be waived.
If the company selects to pay within 30 days—the more likely option—both sides win. You get the business and the corporation gets more favorable terms.
Other keys to negotiating with Goliath Among the other steps to effective negotiation:
Be alert to the prospect’s verbal and non-verbal signals, which may reveal true needs that you didn’t pick up in previous conversations. Give those on the other side what they want—on your terms—and shape your proposal based on any uncovered needs. Always set a price for the prospect’s demands. Put conditions before offers with this type of statement: “If you agree to sign a three-year contract, then we’ll reduce prices 5%.” Consider trial closing with a question such as, “Are you saying that if I agree to free service and delivery for the first three months, you’ll sign a two-year contract?” This will encourage those at the large corporation to reveal up any hidden issues and, hopefully, allow you to bring the negotiation to a conclusion. Clear up any ambiguities, and confirm that terms of the agreement are acceptable and can be implemented by both parties.
So, as a David, stand up to the Goliaths you face by following these negotiation strategies—and you’ll earn their respect, which will produce more favorable agreements and ultimately a healthier bottom line.