A client was negotiating with their largest customer. During the negotiation, their buyer, in a very angry and aggressive manner, ended the negotiation by proclaiming:
“If you don’t give us what we want, we will fund a start-up competitor to you!”
This was a tough sales negotiation tactic – one of the toughest sales negotiation tactics we had ever experienced. The buyer had the resources to do so. Executives in our client organization were scrambling.
We immediately assembled key members of our client’s account team, including knowledgeable engineering and finance representatives, and in 30 minutes, we could feel the panic diminish, and the courage rise. As we guided the conversation, some key facts helped cool the room:
- How long would it take to find this start-up competitor?
- How would this impact business in the meantime?
- What would the due diligence look like, and at what cost?
- What is the reality of the investment needed?
- How long before bug-free tools were ready for commercial use?
- What would commercial terms be between the manufacturer and this new start-up?
Negotiation is very often thought of as a soft skill. We are asked regularly for “tips and tricks” for negotiating. Our clients are frequently faced with angry, threatening buyers who walk out of the room, don’t return calls in the middle of the negotiation, declare the negotiation over, threaten, and yell! Most want a list of tips and tricks to counter these tactics. Here is our list:
In reality, the threat was nothing more than a verbal tactic. Because our client could meet their customer’s needs with higher confidence and lower risk than their alternative (funding a start-up), their customer’s tactic was irrelevant. We’ve seen this countless times. Panic and countering a trick, or an aggressive tactic, with another aggressive tactic rarely works. Repeatedly, it puts pressure on the relationship instead.
When dealing with tough sales negotiation tactics, do you know what helps? Facts!
Facts from a rational negotiator who has more data and seeks to calmly educate all parties at the table wins!
We call this “changing the conversation.” We have choices about how to react to aggressive tactics, and our research continues to prove that using rational, fact-based analysis is always the better choice. Rigor and cadence around negotiating may not be as entertaining as hostage negotiation tricks or exciting as tips from high-end sports agents, but winning deals and protecting margin is a pretty sound end game.