What you need To Know To Negotiate Better Deals

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Effective negotiation is essential for maintaining predictable revenues, cash flow and earnings. Simple negotiations work when all things are simple, but usually they aren't...especially when it …

Effective negotiation is essential for maintaining predictable revenues, cash flow and earnings. Simple negotiations work when all things are simple, but usually they aren't...especially when it involves complex product/service offerings. Watch this webinar for ideas that can save you valuable time, money and aggravation.

Jim Geisman from Software Pricing Partners will share practical tips on the nuances of complex negotiation from his years of experience working in the software industry - which are applicable to any complex, highly differentiated products.

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  • 1. 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
  • 2. Sponsored by LeveragePoint the Software Solution for Value-based Pricing2
  • 3. 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
  • 4. Today’s Presenters Jim Geisman is President of Software Pricing Partners, Inc and is a recognized expert in software pricing and negotiating software transactions. Jims 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
  • 5. 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
  • 6. Polling Question6
  • 7. Polling Question7
  • 8. 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
  • 9. 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 Settles9
  • 10. 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? • Dont Start Negotiating Too Early – Does the Customer believe your value? • Set Limits and Designate Lead Negotiator – Who/what/when/how far?10
  • 11. 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 • Dont Answer Every Question In the Thick of It • Dont 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 Details11
  • 12. Negotiating Tips for Executives Negotiate the Deal Coming to an Agreement • Agree on Value of Offering • Not Every Deal Can Be Done • Dont Bluff Final Offers. • Don’t Volunteer to Draft Contract As the Dust Settles • 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 Value12
  • 13. 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 Wisely13
  • 14. 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 negotiations14
  • 15. Thanks for Watching! jaymanson@comcast.com Jay Manson (781) 727 – 5977 www.SoftwarePricing.com jimg@softwarepricing.com Jim Geisman (508) 647 – 033015