Covid-19 Triggers Tough Negotiations (Part 1)
Clients who are now suffering will shortly make you suffer too. They will be much more price sensitive and cautious than before. They are reading the same newspaper articles and watching the same news programmes you are, where it is all doom and gloom right now and the same prospect for going forward. In 1929, everyone stopped spending and unfortunately that included the governments around the world. This time we are better informed and the Japanese government is trying to prop up the economy.
Clients may have not spent the lockdown boning up on economic history, so they may have forgotten some of the hard won lessons of the past. In Japan, the safest option is to do nothing, at any point in time and particularly so in a crisis. That means sales are going to be hard to come by and the previously agreed pricing is going to be on the table for renegotiation. Are you ready for that?
Let’s go over the basics again, so we are ready and able to join the conversation with the buyer and not get killed. Before getting into any negotiations, we need to specify the following items:
Our Position
What are some of the features and details of our offering, which we consider are negotiable items? In a realistic appraisal of the “New Normal”, what would now comprise our ideal outcome? Given things look like the virus may get contained a long way ahead of the recovery from the economic damage, what would constitute a realistic outcome? If we can’t get what we want, can we get what we need and if not, what is our fallback position?
The Client’s Position
What do we imagine the client’s fallback position will look like during Covid-19 and in it’s immediate aftermath? We must try to identify what, from a client point of view, would be a realistic outcome for them? Putting ourselves in their moccasins, what do we suppose would be the client’s ideal, realistic negotiation result?
Our Analysis
We should start looking for alternatives and ways to add value. Things have changed, so we need to get busy discovering the client’s new positions and new interests. Everyone is feeling stressed so we should be sensitive to reframe conversations so as to avoid confrontation
What We Will Present
Prepare the client’s case as though it were ours, for this current crisis situation. We should put a lot of effort into presenting value added alternatives, to head off buyer resistance and sales offer rejection. Link your excellent solution to the client’s current positions and vested interests
How Will We Bargain
In the face of Covid-19 and the resultant global economic meltdown, identify exactly what are your ideal, realistic and fallback positions in the negotiation. Respond to harsh or tricky client tactics, rather than reacting to these new approaches by the client, as they try to drive your pricing into the ground. Communicate your suggestions and proposals in ways which are easy to agree with and hard to reject.
What Should Be In The Agreement
Specify all points of agreement during the negotiations, in order to head off future trouble. When clients are in survival mode, we often find the Marquis Of Queensbury rules have been tossed out the window. Things can cut up rough. That means we need to put every agreement into writing, so that there is a record and clarity around what was agreed. Create a checklist and schedule for order fulfillment that both sides are in agreement with and get that signed off.
Sales is a demanding profession when the economy is working and a nightmare when it is crashing. We may have had agreements and price points set in the past, but that is now ancient history. We don’t want to be discussing post lockdown business with the client and get waylaid by stiff demands to “improve” our price point, terms, conditions etc., or else!
