Preparation and Leverage

Know your own position

• Your target — the outcome you are aiming for, which should be ambitious and justifiable.
• Your walk-away point — the point below which no deal is better than this deal. Set it before the negotiation, in writing, and with your manager's agreement. A walk-away decided in the room under pressure is not a walk-away.
• Your alternatives — what you will do if this does not happen. A seller with a healthy pipeline negotiates differently from one whose quarter depends on this deal, and buyers detect the difference.
• Your variables — every element other than price that can move: scope, term length, payment schedule, start date, support level, training, volume commitment, references, case study rights, exclusivity, renewal terms.

The most common preparation failure is treating price as the only variable. A negotiation with one variable is a contest; a negotiation with ten is a trade.

Understand their position

• What is their alternative, realistically? Often weaker than they imply.
• What is their deadline, and is it genuine?
• What are they measured on — total cost, risk reduction, speed, a saving they must report?
• Who is negotiating, what authority do they have, and what do they personally need to achieve?
• What does this cost them if it does not happen? This is the value you established in discovery and it is your strongest position.

Leverage

Leverage comes from need, alternatives, time and information. Yours increases with: a strong, quantified value case; genuine differentiation; a healthy pipeline; a real constraint on your side; and a champion who wants this to happen.

It decreases with: an approaching quarter end you have revealed; a discount offered before it was requested; a single deal carrying your number; and an eagerness the buyer can see.

Quarter end is the single largest self-inflicted loss of leverage in professional selling. Buyers know the calendar, wait, and extract terms that would never have been given in month one. The defence is a pipeline that does not depend on any one deal, and a price that does not move because of a date that matters only to you.

Negotiate late, sell first

Do not negotiate before the buyer has decided they want it. Discussing terms while value is still uncertain means negotiating against an undefined benefit, which always favours the buyer. Establish the decision, then agree the terms.