What You Need to Know to Negotiate Better Deals
Monthly Webinar Series - April 2012
Negotiating Tips for Executives: “What You Need to Know to Negotiate Better Deals” by
Jim Geisman Copyright © 2012 by LeveragePoint Innovations Inc. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of LeveragePoint Innovations Inc. This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion.
COMPANY CONFIDENTIAL
Sponsored by LeveragePoint the Software Solution for Value-based Pricing
2
Today’s Presenters
Jay Manson is Vice President of Sales at LeveragePoint. He joined LeveragePoint in June 2010 and is responsible for bringing LeveragePoint to market. He brings over 15 years in business development, sales and sales management experience, and has spent the past 10 years in the value-based marketing, pricing and sales industry.
Formerly, Director of Business Development in Monitor’s Strategic Pricing Group and as Managing Director for Benchmark Partners.
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Today’s Presenters
Jim Geisman is President of Software Pricing Partners, Inc and is a recognized expert in software pricing and negotiating software transactions. Jim's pricing experience started in 1988. Jim was a member of the original ARPANET team and was honored as an Internet Founder by the Massachusetts Software Council. He is on the Board of Advisors to the Professional Pricing Society. Jim holds BS and MS EE degrees from Tufts University and an MBA from Harvard.
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Win on Price -- Lose the Deal • Anyone can negotiate — and everyone does. • Doing deals too fast means they may be poorly negotiated deals. Good deals take time and care.
• Carefully negotiated deals stay in place longer and can be more profitable. • Companies that negotiate systematically have predictable revenues, cash flow and earnings. • The tips in this webinar should help you (and your colleagues) negotiate systematically.
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Polling Question
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Polling Question
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Negotiating Goes Beyond the Price • Sales negotiations are often viewed as simply… – Vendor sells: Product – Customer buys: Product (after price haggling)
• Few negotiations are that simple because… – Product/service/company is unique – Unique offerings means negotiation is unique i.e. not simple
• Unique sales negotiations are more complex as… – Vendor sells: product, services, delivery, expertise, futures, company reputation – Customer buys: improved financials, customer acquisition, lower costs, improved competitive position, etc.
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Three Phases of Sales Negotiations • Negotiate your value – Be Prepared – Lay Foundation
• Negotiate the offering – Before Starting
– In the Thick of It
• Negotiate the deal – Coming to an Agreement – As the Dust Settles 9
Negotiating Tips for Executives
Negotiate Your Value Be Prepared • • • •
Understand Value of What You Offer Be Clear on Why (and What) You Are Negotiating Make Negotiation Fit Market Strategy Support Negotiation Process
Lay Foundation • Qualify Interest Level — Which stakeholder has wins the most? • Don't Start Negotiating Too Early – Does the Customer believe your value? • Set Limits and Designate Lead Negotiator – Who/what/when/how far?
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Negotiating Tips for Executives
Negotiate the Offering Before Starting • • • •
Have Right Attendees at Meeting Stay Focused on What Changes Your Economics Maintain Control Over Your Side of the Conversation Don't Answer Every Question
In the Thick of It • • • •
11
Don't Play "What If" Games Keep Your Eye on the Actual Amounts Involved in a Deal Give Something; Get Something—Value Trade-Offs Use Term Sheets Before Contract Details
Negotiating Tips for Executives
Negotiate the Deal Coming to an Agreement • • • •
Agree on Value of Offering Not Every Deal Can Be Done Don't Bluff Final Offers. Don’t Volunteer to Draft Contract
As the Dust Settles • • • •
12
Avoid Surprise Demands Be Careful With Last Minute Changes Don’t Just Accept Late Requests for Concessions Follow Through on What You Negotiate – Measure the Value
Tips For Negotiating Prices • What Does “a Better Price” Mean?
• Learn Why a Competitor Cuts Prices; Ignore Some Price Cuts • Keep Price Lists Simple Use Printed Price Lists • Make Volume Purchase Agreements Work • Reserve Large Discounts for “Real Big Deals“
• Invest Your Discount Dollars Wisely
13
Next Steps • Think in advance about negotiating a deal.
• Train people to negotiate better deals • Develop customer-specific, quantifiable value propositions • Build models to assess the financial impact of negotiated items • Provide coaching assistance during sales negotiations
14
Thanks for Watching!
[email protected] Jay Manson (781) 727 – 5977
www.SoftwarePricing.com [email protected] Jim Geisman (508) 647 – 0330 15
Negotiating Tips for Executives: “What You Need to Know to Negotiate Better Deals” by
Jim Geisman Copyright © 2012 by LeveragePoint Innovations Inc. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of LeveragePoint Innovations Inc. This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion.
COMPANY CONFIDENTIAL
Sponsored by LeveragePoint the Software Solution for Value-based Pricing
2
Today’s Presenters
Jay Manson is Vice President of Sales at LeveragePoint. He joined LeveragePoint in June 2010 and is responsible for bringing LeveragePoint to market. He brings over 15 years in business development, sales and sales management experience, and has spent the past 10 years in the value-based marketing, pricing and sales industry.
Formerly, Director of Business Development in Monitor’s Strategic Pricing Group and as Managing Director for Benchmark Partners.
3
Today’s Presenters
Jim Geisman is President of Software Pricing Partners, Inc and is a recognized expert in software pricing and negotiating software transactions. Jim's pricing experience started in 1988. Jim was a member of the original ARPANET team and was honored as an Internet Founder by the Massachusetts Software Council. He is on the Board of Advisors to the Professional Pricing Society. Jim holds BS and MS EE degrees from Tufts University and an MBA from Harvard.
4
Win on Price -- Lose the Deal • Anyone can negotiate — and everyone does. • Doing deals too fast means they may be poorly negotiated deals. Good deals take time and care.
• Carefully negotiated deals stay in place longer and can be more profitable. • Companies that negotiate systematically have predictable revenues, cash flow and earnings. • The tips in this webinar should help you (and your colleagues) negotiate systematically.
5
Polling Question
6
Polling Question
7
Negotiating Goes Beyond the Price • Sales negotiations are often viewed as simply… – Vendor sells: Product – Customer buys: Product (after price haggling)
• Few negotiations are that simple because… – Product/service/company is unique – Unique offerings means negotiation is unique i.e. not simple
• Unique sales negotiations are more complex as… – Vendor sells: product, services, delivery, expertise, futures, company reputation – Customer buys: improved financials, customer acquisition, lower costs, improved competitive position, etc.
8
Three Phases of Sales Negotiations • Negotiate your value – Be Prepared – Lay Foundation
• Negotiate the offering – Before Starting
– In the Thick of It
• Negotiate the deal – Coming to an Agreement – As the Dust Settles 9
Negotiating Tips for Executives
Negotiate Your Value Be Prepared • • • •
Understand Value of What You Offer Be Clear on Why (and What) You Are Negotiating Make Negotiation Fit Market Strategy Support Negotiation Process
Lay Foundation • Qualify Interest Level — Which stakeholder has wins the most? • Don't Start Negotiating Too Early – Does the Customer believe your value? • Set Limits and Designate Lead Negotiator – Who/what/when/how far?
10
Negotiating Tips for Executives
Negotiate the Offering Before Starting • • • •
Have Right Attendees at Meeting Stay Focused on What Changes Your Economics Maintain Control Over Your Side of the Conversation Don't Answer Every Question
In the Thick of It • • • •
11
Don't Play "What If" Games Keep Your Eye on the Actual Amounts Involved in a Deal Give Something; Get Something—Value Trade-Offs Use Term Sheets Before Contract Details
Negotiating Tips for Executives
Negotiate the Deal Coming to an Agreement • • • •
Agree on Value of Offering Not Every Deal Can Be Done Don't Bluff Final Offers. Don’t Volunteer to Draft Contract
As the Dust Settles • • • •
12
Avoid Surprise Demands Be Careful With Last Minute Changes Don’t Just Accept Late Requests for Concessions Follow Through on What You Negotiate – Measure the Value
Tips For Negotiating Prices • What Does “a Better Price” Mean?
• Learn Why a Competitor Cuts Prices; Ignore Some Price Cuts • Keep Price Lists Simple Use Printed Price Lists • Make Volume Purchase Agreements Work • Reserve Large Discounts for “Real Big Deals“
• Invest Your Discount Dollars Wisely
13
Next Steps • Think in advance about negotiating a deal.
• Train people to negotiate better deals • Develop customer-specific, quantifiable value propositions • Build models to assess the financial impact of negotiated items • Provide coaching assistance during sales negotiations
14
Thanks for Watching!
[email protected] Jay Manson (781) 727 – 5977
www.SoftwarePricing.com [email protected] Jim Geisman (508) 647 – 0330 15
