Negotiation Secrets

© Jeanette Nyden, J. Nyden & Co., Inc. All rights reserved.

www.jnyden.com | 206-723-3472 | [email protected]

Negotiation Secrets for Small Companies: Five Steps to Get Past a Large Corporation’s Poker Face

By: Jeanette Nyden

Have you ever left a negotiation feeling as though it did not go as well as you had hoped

it would? Many of us have. Negotiating as a vendor with much larger corporations is tricky

business and it seems that negotiations are getting more complicated each year as larger

companies shift more and more risk to the manufacturers. At times it might even feel as if the

deck is stacked against you, and in many ways, it is.

In this article, based on a survey that I conducted in June and July of 2005, I’ll share with

you the three typical challenges intrinsic to working with sizable organizations, I’ll reveal two of

the most commonly overlooked impediments to successful negotiations, and then I’ll share five

easy to implement tactics that will fully engage you in your role as negotiator.

Thirty-five small companies ranging in size from a few employees to several hundred

participated in the survey, and 90 percent of them reported similar challenges. For the purposes of

this discussion, small means your company has proportionally fewer resources, less revenue and

less power than your negotiating partner.

Three Typical Challenges

1 Time is on a the Buyers Side: The number one complaint reported by

the survey respondents was the amount of time involved in negotiating deals with large

corporations. There seems to be never ending, inexplicable delays, complicated by the fact that

almost everyone in a large corporation has the authority to answer, "No." Conversely, hardly

anyone has the authority to say "Yes."

2 Pressure to Reduce Prices: A second complaint registered by the survey

participants was the on-going demand to provide an ever cheaper product or service. Despite the

substantial evidence that superior products and services are being offered at the best value, the

role of the purchasing department is to always grind down the price just a bit more.

3 Constantly Changing Players: The third most common problem

experienced by the survey respondents was the difficulty in developing lasting relationships with

purchasers at large companies. Corporations are constantly reorganizing their departments and the

fall-out is that building and keeping relationships is frequently not possible.



Two Most Underestimated Impediments

While those three complaints were consistently mentioned by the surveyed companies,

those challenges are also the most obvious. The next two issues only revealed themselves under

the further questioning.

The Poker Faces: When asked, “if you had a magic wand, what one thing would

give you more confidence in your next negotiation?” the majority of respondents stated they

would appreciate the ability to see past the poker faces. Most respondents felt that despite any

traditional efforts of asking the right questions, unearthing the motivation of a large corporation

to request some seemingly onerous terms of the contract was nearly impossible.

Non-Negotiable Terms: Although the previously described issues of corporate

bureaucracy are frustrating, they only mask the deeper issue at hand. The most overlooked, and

the most serious mistake small companies make in dealing with a big corporation is believing that

the terms and conditions put on the table are non-negotiable. The most successful deals always

involve the negotiation of terms and conditions.

You Have Powerful Cards – So Play Them!

You may not think of yourself as a master negotiator, but when you enter into a deal with

a large organization, you are expected to drive a hard bargain. Not only do you need to address

the five problems outlined above, you must also improve your bargaining power by stepping into,

and owning your role as negotiator. These five simple, yet effective, tactics will help you do just

that.

1 Ask Clarifying Questions: The most powerful tactic you can immediately

implement is to ask a lot of clarifying questions. Pose questions that seek to clarify facts or

figures in an open-ended and non-judgmental manner. Do not assume that you understand what it

is that your counterpart is expecting from you.

2 Make Deliberate Counteroffers: Masterful negotiators listen between

the lines for what is being conveyed by word choice, tone, inflection and for what is not being

said. These savvy negotiators make counterproposals that speak first to their counterpart's wants

and needs, and then offer a solution.

3 Address the Customer's Bottom Line: Another simple, but imperative

tactic is knowing exactly how your products and services will improve the customer’s bottom

line. Because many purchasers at large companies are looking at very small margins within which



to purchase, buyers must have concrete facts and figures to justify price points beyond their

limited range. Rather than defending a price with references to your profit margin, be prepared to

demonstrate with facts and figures the ways in which your products or services will increase their

profitability.

4 Initiate the Bidding: From now on, make the opening offer whenever

possible. There is a strong psychological tendency that comes into play when someone makes the

opening offer. In effect, the person who throws out the first number anchors the negotiations. The

person who waits to counteroffer faces an uphill battle of negotiating to a higher price.

5 Define and Demand Tradeoffs: Many negotiators believe that if they

make a concession their counterpart will also give something up. In negotiations with large

corporations, it behooves you to be more proactive. Define what you are giving up and more

importantly, be precise about what you expect in return. Make it very clear that your concession

is predicated on your counterpart's ability and/or willingness to make a tradeoff in return.

Becoming a Master Negotiator

Working with large corporations really can be rewarding and profitable once you master

the negotiation process, but similar to a tough game of poker, you can’t just hope you’ll be dealt a

good hand, you have to practice playing the game. The difference between the savvy negotiators

and the folks who leave the meeting scratching their head in exasperation is that the successful

players have fully mastered and fully embraced the negotiation process. Learn to apply these five

tactics at your next negotiation and watch your confidence increase and your negotiations

improve.

Jeanette Nyden is president of J. Nyden & Co., Inc, a negotiation skills training company based in Seattle. She can be reached at 206.723.3472 or by non-negotiated email at [email protected].

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Negotiation Secrets