Insights on Business and Sales Negotiations

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.

Lose Credibility, Lose Leverage - Another real-life example

October 10, 2009

Well, we hope you didn’t have to read this, “Sidekick customers, during this service disruption, please DO NOT remove your battery, reset your Sidekick, or allow it to lose power.” That’s the message from T-Mobile and the Sidekick data services provider after a reported “cloud computing” failure, which is expected to cause clients to lose their contacts, calendar entries, and photos. We now have the latest in a long line of real-life “credibility and leverage” scenarios. T-Mobile is scrambling to regain credibility and the satisfaction of T-mobile clients. As part of that scramble, they have offered credits to affected clients. You may expect to see their competition start advertising something like this: “Your personal information is safe on your phone, and is…

Subcontractor Negotiations Foil Penske Bid to Save Saturn

October 1, 2009

By now most of you have heard that the Penske Automotive deal to save Saturn fell apart. (See page 1 of the Wall Street Journal, for example) The reason given is that Penske failed to secure a commitment from a third party to manufacture cars for sale under the Saturn name. GM has guaranteed to do so for 2 years, but the issue was what happens after that. Penske was negotiating with Renault to be that supplier two years from now. But Renault balked at the plan. In our opinion, this was a good business decision by Penske. Too often the requirement of a subcontract relationship to make a deal happen is left for later, especially if it seems that there is time to secure the subcontract. But the risk does not go down just because there is more time. In fact, as in this case,…

Cash for Clunkers - Part 2

September 17, 2009

In our recent “Cash for Clunkers” post, we discussed leverage in government car purchase incentive programs. One question we posed was: “who has more leverage – the salesperson or the buyer?” We thought the buyer had more leverage, feeling that it was easier for them to walk away given how long they had already owned a clunker. (You just get used to some things.) We used this example in a recent K&R Negotiations Workshop, and heard a different view from someone who had experience with the program as a buyer. He told us that at the car dealership he used, they were so busy that if you didn’t get “in the queue” early (days early!) you weren’t going to get processed before the program expired. He told us that he waited over 3 hours to see the financing manager. …

Cash for Clunkers: Some Simple Lessons in Timing and Value

August 27, 2009

If you live in Spain, Germany, France, Italy or the United States, or are following the automotive or economic news, you are probably aware of the government programs commonly referred to as “Cash for Clunkers”. If you aren’t aware, here’s a simple view of how they work. Individuals that own older (but not too old) autos which get relatively poor fuel economy are encouraged to trade their car in for a new, more fuel efficient one. The encouragement is in the form of a (presumably) inflated trade-in value paid directly by the government to the seller. Buyers immediately get the benefit of the difference between the actual trade-in value of the auto and the government payment. Over time, buyers and the environment both benefit from the improved economy of…

A "Happy" view of value

May 11, 2009

"Admiral produces boringly good numbers" is a headline from the fall Times Online (UK). At K&R, we often write about the linkage between value and negotiation success (or sales success). Well-done value arguments are compelling. They result in shorter selling cycles and in more revenue and profit. Poorly done ones lead to longer sell cycles and discounted prices. Perhaps the most common value argument error we see is that people stop short of linking their value argument to a business result that the buyer cares about. Something like "My product will make you more efficient." It isn't enough. We know that to be effective, "efficiency" has to be followed to its logical business-outcome endpoint. In a simple way, Admiral gives us a clue for creating better value chains. To…

Saving your way to prosperity

March 25, 2009

Times are tough. The stock market is at 1997 levels. Unemployment is high. Sales are down. You need to manage your business results for 2009. What do you do, and why? If we were playing the television game show "Family Feud" (or Family Fortune, if you're in London), the number one answer is... Stop spending! How about it? Can you save your way to prosperity? While careful spending is always a good practice independent of the economic conditions, will it make you or your company successful? Probably not. Let's look at the economics of earnings. The big number isn't the cost line. Well, the big number shouldn't be the cost line - too many people are losing money at the moment. The real leverage to improve your business results is in the revenue / profit line.…