Do you have a negotiating framework for major deals?
In B2B settings negotiations are more complex than ever before. Most companies know how to prepare for and negotiate effectively but don’t have a negotiating strategy or framework when negotiating with their top 10-20 accounts. They negotiate based on who is the ‘top gun’ negotiator.
So, the question is ‘Why do so many companies fail to develop a negotiation framework for major deals?
The main two reasons are:
- Most fail to sit down as a leadership team and decide what the value proposition is for their top 20 accounts or how they measure their offering.
- They don’t have a framework in place for how to engage with key stakeholders in the negotiation to create trust. If you want key stakeholders to see you as problem solvers, you need to demonstrate this capability before the negotiation.
A framework enables senior managers and executives to decide what the substantive issues would be in critical negotiations and start to develop some workable scenarios. Creating choices and setting a framework for what you do and what you do not do in major negotiations.
The framework should focus the team on results; this means that as a leader you need to measure a range of possible outcomes, not just the dollars. How persuasive the team is during the negotiation on your value proposition should be as important as the final deal. Value drives results not price.
Every negotiation is different and having a practical and successful framework allows you to focus on your preparation and negotiation. In your marketplace, your top accounts are under tremendous pressure and are struggling to deal with the chaos in their business world. So you need to be proficient at persuading decision makers why they should use you and not a cheaper supplier. For those who manage your top accounts strategically, you know that if you don’t bring value to them, they will negotiate purely on price.
To be successful, you need to find growth opportunities and then negotiate on value. A great tool to help you achieve this is a negotiating framework. Do you have a negotiating framework in your company?