Mark Suster writes a great article on negotiations.
He haggles for a living, and there’s no doubt he’s better than I am. I represent myself at the level of conscious incompetence.
One of the things that he doesn’t (yet) get into, not really, is the iterated game. You fight this battle to make the next one go more smoothly. He says:
In face, your goal in a negotiation is not always to get the lowest possible terms. Your goal is to understand the needs of your partner and create win/win outcomes where both sides are incentivized to continue to want to work hard together – now and into the future.
Here’s the deal. A lot of times people I negotiate with have a reflex aggression that doesn’t help them. They’ll fight for terms that they don’t need and conditions that actually disincentivize deals from getting done.
This is not a surprise. We have to get things done despite man made obstacles.
I negotiate with legal departments all the time. They get involved in profoundly dumb ways. Simplifilm pursues course towards big and small companies. We’ve pursued multivideo deals worth, often, tens of thousands of dollars, and hundreds of man hours of work.
We’ll often come to terms with the person needing the work, and legal will push back on some type of material point. It has occasionally absurd. Everything from net 60 pay days (which would hurt us majorly), to who gets to choose the voice talent (seriously, legal has said that they get to pick from a minimum of 40 choices).
At a certain point, we push back. Even when we can live with the points. Demonstrating indifference – in a respectful and cheerful way- is how you create long term clients.
Now, it seems like an ego trip. FAR from it. Having us be a peer and not a lackey means that the tension that comes from the back and forth yields a superior product. That’s what the client wants.
Being willing to walk means:
- We get respect.
- The client gets better work.
- We don’t go through mutual agony or client-side tantrums.
- The client rehires us
- We’re peers, not serfs.
Having respect is only possible when you negotiate with vigor and good cheer.
When a client gets the idea(delusion) that we’re financially in need of this deal…holy hell, will the number of revisions double or triple. When the client feels like they are lucky we made time for them, they respect our ideas for the video, and it closes smoothly. For them, and for us.
“What do you think about this idea” is a more respectfil starting point than “we need you to do this for us.”
I was willing to kill what was the second biggest deal we had done over a minor point. Client wanted X’d out “mutual approval” on script and said “All scripts to be provided by client with no revisions by Simplifilm.” This was tens of thousands. It came at a time where we felt that losing this would set our momentum back. You can’t make a great video with a bad script. We needed to have mutual approval.
We were willing to walk, and in a way that can’t be faked. I sent a letter – and I’m paraphrasing:
Thanks for getting this far. I hope to be able to work with you on these videos, but we won’t be able to go forward if we can’t have input and approval on the script. I would like to know in the next 2 days if this will happen or not. If that’s a sticking point for you, it is for us too, for reasons you can understand.
Mutual approval means that we’re both happy with the script. It could be that your script is fine as is, or it could be that you’re walking into a minefield.
Let me know, and if this particular gig isn’t a fit, we’ll be happy to consider whatever you needs the future.”
We got the deal, and everything went swimmingly. They referred us more in the future.
That was for everyone’s benefit.