Our Negotiating Leverage Was Hidden In Plain Sight

The note came from the VP of Marketing at a global software company. My eyes widened as I read it.

The VP wanted to meet and discuss a project that had three components; equipment, production and implementation. In total, it could be worth more than ten times the value of my average sale. This had the potential to make my year, and then some.

We sat down across the desk from our client. After some pleasantries, he matter-of-factly said that we were competing against a well-known company (many times our size) and that if we didn’t match their equipment price there would be no need to talk further.

With some quick mental calculations I realized that about 40% of the projected profit had just evaporated. (We learned later that our competitor sometimes used equipment as a loss-leader.)

The VP was a trained negotiator, and he was thinking ahead. We thought this was “just” going to be a sales meeting.

• He was prepared to negotiate.
  We were not.
• He knew his sources of negotiating leverage.
  We did not.
• He applied leverage.
  We gave a huge price concession.

The project required a complex, multi-office and time-sensitive implementation. Our company had far greater experience and expertise in this area than the competitor.

We had a potential source of leverage that could have made up for a lot, or all, of the price concession he wanted on the equipment. The potential source was in the implementation.

Our potential source of negotiating leverage remained just that. Potential. It went untapped.

Implementation was worth much more to our client than the equipment and production combined and we had a distinct competitive advantage in implementation. In the end, we did not have the skills to uncover and leverage its value. We needed to ask more and better questions in order to claim the value of the implementation.

Take our Negotiating Skillsclass to learn how to strategically apply leverage so that you will negotiate better deals.

This information is discussed in our Negotiating Skills ► Into Action curriculum. If you’re looking for ways to improve your communication skills, register for one of our public classes.

Other Resources:

5 Things Most People Don’t Know About Negotiating

Successful Strategies For a Win-Win Negotiation

Negotiation Tips for People Who Hate Negotiating