Facts Win Every Time vs. Emotions and Tricks
Regardless of face-to-face or virtual negotiation, it is our experience that the #1 driver of a successful negotiation is planning and facts. In the absence of facts what is said and presented by the other side carries more weight. Think about it this way, if you’re having a conversation with someone about a topic you know nothing about, their words carry more weight. On the other hand, if you just finished a research project on that same subject, their words will have less impact on your perception.
We know that “anchors,” those items like opening offers or last year’s deal, have a huge impact on negotiation. In fact, opening offers have more impact on final outcomes than all subsequent counter-offers combined. It is also our experience that these items that tend to “anchor” negotiations become even more powerful in a non-face-to-face environment.
In virtual negotiation, we strongly suggest using many of the great video conference tools and increasing your negotiation preparation. This begs the question, what does good preparation look like? We know from our own primary research that 97% of buyer negotiation tactics fall into two categories:
- The buyer will refer to their alternative (a named competitor, a substitute, do it themselves, do nothing).
- That alternative will be leveraged for concessions (price, payment terms, service upgrades, etc.)
In fact, the most common successful negotiation tactic globally was: “I can get the same thing from someone else cheaper”
So, when doubling your preparation for a virtual negotiation, these are the two areas on which to focus:
- Know more than your customer (or your competitor) on how your solution meets the buyer’s needs better than their alternative. This = your value.
- Be prepared for the likely areas of concession pressure and prepare a plan for quid pro quo trading. Something lower in cost to one side, higher in value to the other.
In fact, we suggest having three different possible paths forward prepared ahead of time to keep you from focusing on line item concessions. Present them as relationships.
The more you know about #1 above, the better informed you will be for #2. This means when faced with concession pressure, you will be able to gauge how aggressive you need to be only if you first understand the value you bring above and beyond what the alternative does.
So please, whenever possible, leverage a virtual face-to-face meeting and increase your planning to be less impacted by negotiation “anchors” from the other side.