Nogotiation Blog

Insights on Business and Sales Negotiation

Join us for insights on how to negotiate a winning balance, where where both sides understand and appreciate the value they receive. As a result, you are more likely to forge a long-lasting relationship that yields more and better opportunities in the future. This idea underpins K&R Negotiations’ Win Wisely™ approach and underlines the importance of using leverage wisely.

Technology Buyers and “Advance Fee Fraud”

First - we're not really writing that technology buyers are defrauding sellers - so don't send nasty letters.  But there is a common technique that buyers use that has a parallel to the infamous Advance Fee Fraud, and which provides a negotiation lesson for sellers. An Advance Fee Fraud, also known as a "Nigerian letter" scam, or a 419 scam (named after the part of the Nigerian criminal code that deals with fraud), or a bunch of other names, is not unique to Nigeria.  Perhaps you have received the email... DEAR SIR, CONFIDENTIAL BUSINESS PROPOSAL HAVING CONSULTED WITH MY COLLEAGUES AND BASED ON THE INFORMATION GATHERED FROM THE NIGERIAN CHAMBERS OF COMMERCE AND INDUSTRY, I HAVE THE PRIVILEGE TO REQUEST FOR YOUR ASSISTANCE TO TRANSFER THE SUM OF $47,500,000.00... In case you…

The Qualcomm and Nokia Patent Agreement

In a previous article we discussed Negotiation Leverage in the long-running, but recently settled Qualcomm/Nokia patent dispute.  Setting leverage aside, let's look at just one of the reported terms of that agreement as an illustration of one of K&R's Six Principles of Negotiation. The principle is this: "Terms Cost Money, Someone Pays the Tab (expense)." What the principle means is that as you negotiate, you should consider that every term in the final agreement will cost one side or the other money.  You should therefore be careful when altering your terms.  Mistakes can be expensive. This does not mean, however, that the cost to each party is the same. First example: in the Qualcomm/Nokia case, the agreement included an up-front payment and then per-unit royalties from…

An Outage at Netflix

A lovely (to us, not so much to Netflix) example of how to make a value argument in sales arose after a recent Netflix technical problem caused their web site to go down, and shipments of movies to stop for days. The unknown technical issue was rumored to be internal to a proprietary software solution Netflix uses to manage their movie reservation/shipping/check-in/check-out processes. The head of Netflix operations actually posted some status on their blog on Tuesday, apologizing for the problem. He posted again on Wednesday, then two more times on Thursday. All shipping function was not yet restored when we started this article. How does this relate to value and sales? The best sales arguments compel action based on a reward if you take action (buy) or a risk if you don’t. If you…

Oh No Mr. Bill! (Part 2) Patents at Qualcomm and Nokia

In our preceding article we applied the principle of Negotiation Leverage to a sales argument for replacement software.  The case we looked at used an overstated fear of the risks of lack of support to attempt to drive a client to buy a replacement.  We called it the "Oh No Mr. Bill!"[1] argument, because it relied on using the fear of catastrophe to motivate the buyer.  For the most part, it is an ineffective argument. Let's look at another "Oh No Mr. Bill!" argument, this time for patents. In 2005, a string of lawsuits began between Qualcomm and Nokia, after Nokia's license to use Qualcomm patents had expired.  It is a certainty that Qualcomm, in advance of that expiration, warned (or "threatened" - take your pick) Nokia that failure to renew would cause any number of catastrophes…

Oh No Mr. Bill! Your Software is Going End-of-Life.

When negotiating, you should be aware of the principle of Negotiation Leverage.  Leverage describes the use of facts, rationale or conditions to move the other party closer to your way of thinking.  Here are some simple examples: Your software is already installed and in production, or your services team has completed 2 phases of a 3 phase implementation project. You have leverage when additional licenses are required for the same task, or when phase 3 of the project starts, because your software or services team is proven, and there is a cost of conversion to move to another alternative. Leverage can be related to time (such as end-of-life). When cars are leased, there is leverage on the buyer (leasing party) to make a decision at the point of the lease expiration (or slightly…

Is Your Software Better than Free?

Open software is in the news every day.  Much of it is licensed for free.  For priced software, K&R hears, time and again, sales pitches similar to this, "We're providing you with $100,000 (Euros, Rupees, Rubles...) of software value for only $63,000 (just sign here)."  If you are a buyer, you have almost certainly heard this type of argument.  If you have used this argument as a seller, you can be almost completely certain that it did not close the sale.  Even if the sale closed, this argument was not what made it happen.  Let's look at the reasons. First: a certain logic is at the heart of this argument.  One version goes like this:  "Price is a shorthand description of customer value, and a lower price is better because it makes the same value available for less."  There are…

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Creating Value-Based Leverage

In this short video, learn why negotiation is really the art of finding agreement.

Mladen Kresic introduces the concept of value-based negotiations leverage and why it is a powerful tool for moving conversations to an agreement.

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