Learn some quick tips for successful negotiations such as the importance of preparation, planning concessions, sensible discount levels and more. Sources: Professional Pricing Society Lecture, Barcelona, 2015. Led by Simon-Kucher.

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Tips for Successful Negotiations
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Negotiation can be something more than a multiple of 5%!
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
% deals done at
discount level
Discount Level %

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What is the most important aspect to a negotiation?
Typical negotiation pitfalls:
1. Own position of power underestimated
2. Negotiation strategy not fleshed out, inconsistent, counterproductive
3. No alternatives offered at different price points
4. Value to key account not quantified, not communicated clearly and credibly
5. Negotiation strategy not executed in “heat of the deal action”
6. Top executives involved too early, too often, and ill prepared
7. Initial anchor offer set too low.
PreperationExecution

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3 steps to prepare for negotiations
Information Price Setting Price Negotiation
Feedback
Feedback regarding success/failure
Target Walk-away Start Price End Price
• Price history
• Competition
• Value
• Customer strategy
• Costs

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Balance of power rarely looks like this
Other Side
My Side

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… but often looks more like this
POWEROther Side My Side
Switching Costs Quality End User Influence
Don’t forget…

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Rank (non price) concessions and selectively concede
• Key bargaining chips
• Overplay their importance to you
• Concede reluctantly
• Don’t concede without a fight
• Always demand something in return
• Don’t concede unless you really have to
• Consider walking away
• Concede here first
• Generate goodwill
• Try and increase perceived importance
First
Second Third
Last

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In Summary
• Buyers are getting smarter and more sophisticated
• Giving discounts makes a huge impact on your bottom line
• No matter what they say, it is never all about price.
• Successful negotiation is sometimes the difference between
5 and 4%
• Successful negotiation is all in the preparation
• Plan your concessions and walk away price.

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