Some people believe that unless the negotiations process is long and contentious it will not produce a favorable outcome for your side.
For certain stakeholders in the process, like outside lawyers, this belief is somewhat self- serving because a long and hard process makes them appear as being very important to the process and it drives up their billable hours.
Some people believe there must be a winner and loser at the conclusion of negotiations. This is false. A one-sided deal, regardless to whose advantage, will not survive very long and certainly will not deliver its intended benefits to the parties. If either or both sides start negotiations from extreme positions it will extend the time involved to reach an acceptable conclusion…. balance.
I believe that the “sweet-spot” for all negotiations is to arrive near a middle ground of balance for both parties. These are the deals that thrive and grow because both sides are generally happy with the outcome.
The negotiations process will move the final outcome to slightly right or left of center but generally not too far
If potential clients believe that the contracting process is long, difficult, and expensive, it can cause them to choose to stay with an incumbent vendor who has an inferior solution, just to avoid the negotiations process
I have found that by following these principles and strategies, the negotiation process can be concluded relatively quickly and without incurring any collateral damage to the client relationship.
These recommendations assume that there are at least two people involved in the process on each side. For the client, it will be the business process owner and an outside attorney and/or a contracts manager employed by the client.
For Vee Healthtek it is likely the account manager and the business operations person.
Identify and assign the negotiation team and their focus:
There are likely only a few items that the client process owner truly cares about….and they probably do not include limitations of liability or indemnifications. They do likely include the fees, speed of implementation, and service levels. Knowing what is most important to the client will allow the Vee team to stress these in the process.
On Vee’s side, knowing in advance what our limits are, what our floor price is, and how fast we can implement are very important to keeping things moving quickly. You rarely want to say “let me check on that and get back to you”.
This implies that you are not empowered to make decisions on Vee’s behalf.
If you argue on every edit then you will not have credibility when you must dig in on an unacceptable term. It sets the right tone if we are saying “yes” most of the time. It also indicates that more often than not “no means no”.
This will allow the parties to get to the balanced zone in less time.
Use the account manager for back channel communication with the client business contact to move things along and keep things in context.
In a recent negotiation, the outside attorney was demanding indemnifications that have never been agreed to and are not customary in the industry. This was unknown to the client.
The account manager shared this fact in private with the business owner and reinforced that regardless of how long we debated this point Vee cannot agree to it. In the next contract draft the demanded indemnification was removed.
The negotiation process does not have to be long and hard. It also should not result in having a winner and a loser.
While each negotiation will have its own issues and characteristics, by employing these strategies, not stand a good chance of getting to “yes” quickly with a deal that is fair to both the client and Vee Healthtek.
