We rave about the marketing techniques and initiatives to drive the all-important sales strategy, for sure, but quite frankly it’s all for nothing if you can’t seal the deal, secure the contract and possibly allow for renewals (can you say “continual revenue generation”?) of those contracts for a large span of years.
It’s all about convenience, sustainability, residual income. When you feel like you can just sit back and watch the money roll in because you successfully negotiated a hefty 5-year contract, you know you’re doing well. There are secrets, though — five, to be exact — to negotiating with clients and partners well. It’s an art form, basically, and it must be practiced studiously with all small business owners and entrepreneurs.
Pay close attention to these secrets, starting with….
Be Proactive With Your Negotiations
Don’t be ‘aggressive,’ though. Definitely show that you’re interested — not desperate, though. Taking the initiative simply means offering to do some of the most minute tasks involved with contract negotiation, such as drafting the actual document.
That’s right: offer to do all the writing. Such great poise and professionalism will strike a chord; I guarantee it. Additionally, though, you get that inside look to all the terms given the fact that you’re actually writing. Think of it as having the ultimate ringside seat to everything going on.
Additionally, pro-action does come with the characteristic that you must be active with your language. Be simple. Don’t use the legalese stuff as most people (unless you’re an attorney) won’t get the lingo at all; and when it comes to contract negotiation, that’s a major turn-off. Be straightforward, succinct. Even short-winded.
This Allows You to Really Listen
By listen, I mean really knowing the other party’s requirements, hopes, goals, dreams, desires. Basically everything and anything. In fact, it’s a prime strategy to do a bit of research on your prospective partner or client even before the negotiation ensues.
You might want to consider evaluating these concepts and characteristics:
- Spending Habits
- Business Costs
- Certain Linguistics
People do speak different ‘languages,’ and I am certainly not talking about Spanish, French or Sanskrit. There are corporate dialects galore. Know them. Understand them. Moreover, how a contract looks for an order of goods going to a church will look a lot different than a contract for an order of equipment going to an automotive manufacturing facility.
More importantly, don’t overstep any of your bounds. Listen to what the other party is saying. It’s about finding that common ground.
Patience Is Truly a Virtue, Even Outside of the Bible
You’ll find that contracts often do take time for finalization and agreement. Don’t freak. Just because you had the initial conversation about a month ago with no contact back for any progress doesn’t mean the deal will go sour.
It takes a lot of time for decisions to be made, especially when the contract in question is possibly worth thousands of dollars. I’d venture to say that the longer it takes, the better the chances are of the contract going through. You never know, though, but the last thing you want to do is stew about all of it, bug the other party to death about when you’ll see an update on the negotiations, because you certainly don’t want to lose the deal.
Think of it like fly fishing. It’s about patience. Pull the line only gently, but let up some slack here and there as you slowly reel it in. Take your time.
That means you can easily send a follow-up email if you like. Just don’t repeatedly do it. Allow counter-offers, too. Shared control is essential. It’s a bouncing back and forth of ideas, so just let it evolve. Then the steel head bass will be yours for the taking.
Add Some Extra Value to Your Propositions, Too
What does that mean? In a way, you always sweeten the deal. Don’t be gimmicky with it, though, as it doesn’t matter if you have a warehouse to offer when the other party already has the ready-made storage. The deal doesn’t really look as sweet then.
Add value that the other party can’t even provide for himself or herself. Add services the other party can’t even provide at all. Add multiple provisions. Stack it up like pancakes at your favourite breakfast stop. They always look better that way.
You’ve Got the Edge….
Ultimately, contract negotiation is about competition. Do you stand out above the rest? If you do, you stand the best chance to getting the contract. Remember: you’re not the only one trying to get customers, clients and partners. Parties do shop around for better terms, so take a good look at yourself and what you offer, do the research and see if you really stack up as better than the rest.
Ultimately, You Need to Not Give Any Reason for the Other Party to Reject Your Offer
It sounds like a mouthful, and it looks good on digital paper, yes. It’s easy to understand, though. Successful contract negotiation isn’t simply about saving the other party some money. Providing a cheaper service or product is only a small, albeit essential, part of the project.
You basically have to show and prove that your service and product is better than the rest. There’s more value there. Emphasize the value, the ROI even, as well as the cost, and chances are you might come out on top.
Have a discussion with your business lawyer about what you can emphasize about your business during a contract negotiation, because ultimately this is about what you can bring to the table, not necessarily what the other party can bring to you. Yes, successful contract negotiation will benefit you greatly, obviously —
More importantly, though — contract negotiation that continues to grow and prosper, over and over, is successful. The only way to do that is to focus on your prospects and basically get them to love what you have to offer. Then, only then, will you succeed.
About the Author
Matt Faustman is the CEO at UpCounsel. You can follow his business insights on Twitter at @upcounsel.
