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  • Writer's pictureBenjamin

๐—ก๐—ฒ๐—ด๐—ผ๐˜๐—ถ๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—œ๐˜€ ๐—Ÿ๐—ฒ๐˜๐˜๐—ถ๐—ป๐—ด ๐—•๐—ผ๐˜๐—ต ๐—–๐—ต๐—ฒ๐—ณ๐˜€ ๐—–๐—ผ๐—ผ๐—ธ

Updated: Apr 4, 2023

In business school, we discussed an example of two chefs fighting over the last orange in the kitchen. One chef prepares an appetizer, and the other creates a beverage. Each chef needs an orange for their recipe.

After much debate, they realize that while one needs the rind for flavor the other needs the pulp for juice. With the right communication, there would never have been a disagreement since they could use the same orange.

Negotiation can be tense and complicated, but if you recognize what both sides need, you often can find the right path forward.

Chris Voss is a former hostage negotiator who knows how to handle stressful discussions. He emphasizes understanding the other person's needs, building trust, and working collaboratively in solving problems.*

โ€œNegotiate in their world. Ask them questions

that open paths to your goals. Itโ€™s not about you.โ€

โ€“ Chris Voss

In the orange example, if the chefs opened up and understood each otherโ€™s needs, they would get their ingredients quickly.

You may be near to closing a significant deal but stuck on a couple of negotiating points. The key to sales negotiation is for both parties to feel excited about building the relationship.

Here are more thoughts on how to proceed thoughtfully.

Cash Flow

Your company needs to pay the bills. At the same time, customers may be interested but unwilling to commit initially. There are different approaches to thinking about long-term customer engagements.

Initially free: Consider offering a free trial or sample to demonstrate your quality and to build relationships. Make it clear that this is a free trial and consider the customerโ€™s experience if you make renewal automatic.

Strategic Discounts: Consider offering discounts that benefit your cash flow: for instance, when the client commits to order large volumes, places repeated minimum orders, signs on to multiple-year deals, or agrees to pay upfront. You may find that a signed deal now and a price increase later will soothe a clientโ€™s immediate cash flow needs, close the deal, and protect your long-term margins.

Early Adopter Discounts: For new services or products, โ€œearly adopter discountsโ€ recognize that the customer is taking a risk by trying something new. At the same time, you keep the full price as an anchor. This approach to discounting makes the next negotiation easier because the future price has already been established.

Business Considerations

At a service company, itโ€™s worthwhile to negotiate terms that will save you money or time:

  • Service level agreement (e.g., how long you have to fix a problem)

  • Number of services offered

  • Quality of service (e.g., charging for more personalized services or faster delivery)

  • Cadence of service (e.g., quarterly instead of monthly reports)

Essentially, the trade-offs can serve both you and the client.

For a product company, you could negotiate the number of licenses or offer different product tiers to recognize price sensitivity. Also, consider the willingness of the client to test new versions for free initially while giving you feedback and referral suggestions.

You also may be willing to offer a discount when you enter a new industry, land a major logo, or bolster your marketing.

Key Takeaway: Respect both sides of a conversation and consider each ingredient to prepare and enjoy long-term, successful relationships.


* Check out the book Never Split the Difference by Chris Voss.

๐—ฆ๐—ฐ๐—ฎ๐—น๐—ฒ: ๐—ฅ๐—ฒ๐—ฎ๐—ฐ๐—ต ๐—ฌ๐—ผ๐˜‚๐—ฟ ๐—ฃ๐—ฒ๐—ฎ๐—ธ offers over 130 independent articles across 500 pages including leadership, growth, sales, marketing, operations, finance, and teams. In five minutes, gain invaluable insights into the best methods and practical options to activate your dreams.

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