Setting The Table: A Fresh Approach to Procurement Negotiations (a downloadable whitepaper)
A few months ago, I looked at my list of blog topics I have jotted down in my Remarkable tablet (free plug for Remarkable - it’s awesome) and decided to write some tips and guidance on negotiation. It was top of mind after a friend mentioned how they worked for four months pursuing a new client through an RFP, and, after celebrating being verbally hired, got raked during the negotiation. They had to cut their fees so much that they’ll only make a few bucks above break-even. He wondered whether it was even worth the effort. We chatted about the approach he took in the contract negotiation, and he missed a lot of opportunities to improve his outcome. He also allowed some changes to the indemnification section that worry me a little, too.
The thing he said at the end of the conversation is what’s stuck with me the most, though. He said, “It will be fine. We’ll basically do this at cost for now, show them how much value and impact we can deliver and then we can get better fees on the next project or a renewal.”
My heart sank. No, no, no. “Betting on the come” as it’s been called, rarely ever works out in the agency’s favor. You’ve already shown them that you’ll work for less, so why would they decide to pay 25% more next time? It’s like when you get an introductory rate on home internet for six months and then it goes up. Complacent people just pay the higher fee when it increases. Others call the provider to see what other deal they can offer them to stay and not go to a competitor with a better deal.
Negotiation has long been an interest of mine, mainly for the psychology inherent on both sides and amongst each team. I led client contract negotiations at Jackson Spalding for many years, and then even more deeply during my time as an SVP in sales at LHH, a global HR solutions firm.
My original intention in writing this was just to create a blog post with a few negotiating tips, sparked by my aforementioned friend’s experience. Before I knew it, I'd written 12 pages and decided to just keep going. I guess I had a lot to say. When I stopped, I’d written over 20 pages and decided to just package it all up in a whitepaper and give it away to help others. I certainly wanted it to be a helpful and useful guidance tool for those finding themselves in negotiations more and more, but I also wanted it to be a fun read. I wrote it in a style that emulates my favorite business books, weaving in stories, humor and a kitchen metaphor that will become clear once you start reading it.
I hope this helps you and your team. I’d love to hear your feedback, and would love any tips you have as well. I’m always yearning to learn from others. And if I can help you in a negotiation, please reach out to me for that as well. I’m here for ya.
DOWNLOAD LINK > Setting The Table: A Fresh Approach to Procurement Negotiations (full PDF version)