5 Negotiation Tips That Yield Better Results

SaaS Negotiation

Vendr | Proven results
Written by
Ryan Neu
Published on
July 22, 2019
Read Time

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Whether that's the final meeting after finally hearing the good news that you've been offered the job, the last conversation slated before onboarding a new software, or determining the terms of a new investment deal.

Most people still consider negotiation a battle. I mean, how many times have you heard someone say:

• "I'll play the bad cop."
• "We won / lost that negotiation."
• "Let's beat them up over price."

But this outlook is costing you time and money. Statements such as the ones above are the wrong lens through which to negotiate. The mentality of "us versus them" pits the two parties together against one another, leading to poorer outcomes for both parties and a sour start to a new relationship. Imagine if a new personal relationship started with you negotiating how often one person would pay for dinner versus the other -- not the best way to kick things off and plan for a long-term engagement.

In fact, according to Black Swan, people are six times more likely to give you what you want if they like you (Click to Tweet!). And hey, I'm assuming the stands true for those personal relationships as well! It's all about giving and receiving shared value. 

So how do you create that shared value? Here are five ways I've seen negotiations yield better results. 

Tip 1: Listen actively.

I know, I know -- active listening. You could have heard that one coming. That's because it not only is important, but many people forget how engaged your mind needs to be to listen actively. It's not about listening to the exact words someone is saying, but the underlying message and needs they're getting across that you need to be able to extract and respond to. 

For example, when I worked on the sales team at HubSpot and would hear someone saying ...

"I start my day by logging into our CRM and ensuring everything is updated. I then go to LinkedIn to find prospects that I can reach out to, which takes forever. It can get frustrating to track sometimes when I'm connecting all the tools to our analytics platforms but overall it's manageable."

What I'm really hearing is that they're wasting a ton of time going through a slew of tools and seem content, but by no means enthusiastic, about their current workflow. My job is to understand the underlying context to provide a solution that he or she may not even realize they need yet.

Tip 2: Communicate directly.

Your counterpart will always be looking for the best deal -- and let's be real, you are too. Sometimes you'll hear an ask that is completely unreasonable. That's okay. Rather than getting upset or assuming it's over, be direct. It's okay to tell someone that their ask is unreasonable so long as you give examples.  Believe it or not, sometimes "no" is the best thing you can hear in a negotiation.  Offering your counter-party the option to say no is empowering---this is their choice, after all.

During one negotiation class at MIT, the professor had his class do an exercise where they had to write their offer down on a paper and quietly hand it to the moderator versus speaking directly to their counterpart (you know, the kind of scenes you see in movies).

While there are more layers to the exercise, I'll skip to the conclusions: A number of students tried to undercut their counterpart for the best gain. Upon succeeding, the professor stopped the class to say: "You just screwed over a classmate, someone you may work with post-graduation, someone you may need to negotiate with on a real deal five years from now. Remember how your indirect behavior tarnished the beginning of that relationship."

Tip 3: Don't try to fool the other party. 

In order to get to the optimal outcome for yourself, sometimes we make large claims that don't hold true. A prime example of where this goes wrong is online car sales. If one dealer is offering you a $1,700 discount and claiming this is the *BEST* offer you'll ever get, but another dealer or quick Google search unlocks a dealer giving you the same car, model, and year at a $3,000 discount ... you're left feeling scammed and no longer feel you can trust the initial dealer. 

And this applies for hardware and software, too.  For example, if you logged into CDW to buy a new Apple Mouse, you might see this:

Screen Shot 2019-07-22 at 9.38.19 AM

But is that actually a good deal?  It depends. In this case, no---it would actually be cheaper to buy from Apple directly. 

Screen Shot 2019-07-22 at 9.38.30 AM

Buyers are powered with more tools, information, and options than ever before, and our job isn't to trick them into small gains, but to build relationships that lead to positive outcomes for everyone involved and through the long haul. 

Tip 4: Solve problems together.

One of the greatest pet peeves employees have about their managers is when said manager uses "I" instead of "we." It makes their work feel like a non-essential part of what the team has accomplished.

This translates in its own way in a negotiation. Using "we," "us," and "our" in a negotiation helps signal to your counterpart that you're negotiating for a mutual benefit. You're allowing your counterpart to be viewed as a team member versus an adversary. Here's how this sounds in action: 

• "How can we solve XYZ problem together?"
• "What happens if we aren't able to figure this out?"
• "How can we ensure that this doesn't happen?"

The best negotiations are the ones where both parties come together to solve mutual problems. 

Tip 5: Be efficient. 

Respect your counter-party's time and ask that they respect yours. Too often conversations start by skirting around various social subjects. While there's nothing wrong with pleasantries, constantly going on side tangents can appear disrespectful of someone's time. 

To help be efficient, avoid questions with a binary response (aka "yes" or "no"). Instead, frame your questions with "how" or "what" to dig deeper into the problem as you unravel remaining tasks and potential outstanding items that both teams can work on. 

Pro Tip: Just about every negotiation ends with homework for both sides. To tee this up efficiently, end the conversation with questions like ...

• "What will happen once we get off the phone today?
• "How can we ensure that we have made progress by our next conversation?"

Next Step: When you find yourself in your next negotiation, instead of thinking about how you are going to win, step back and think about what you can do to empower your counter-party to help solve your challenges, together. 

Did you know: Many of the world's fastest growing companies have realized that negotiating software is not a good use of their time.  If this sounds like you, shoot me a note! Ryan@vendr.com

Ryan Neu
Ryan Neu
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Ryan Neu is the CEO and founder of Vendr, which is focused on connecting SaaS buyers and sellers through unique experiences. Ryan founded Vendr in 2019, leveraging his extensive experience in the SaaS industry from his prior roles at HubSpot and InVision. A Y Combinator alum, Ryan has guided Vendr to become a leading player in the SaaS space with his strong vision and passion for innovation and customer satisfaction.

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