I read a really interesting negotiations book, and thought about a few takeaways for every software or SAAS company in their customer negotiations (maybe even as a software negotiations best practice).
Background: The book by Gary Noesner came out in September 2010 and is called Stalling for Time: My Life as an FBI Hostage Negotiator. It has all the kinds of things you would expect to find in a book written by the retired head of the FBI’s Crisis Negotiations Unit (here is a podcast on the book from NPR): stories about estranged husbands holding their wives hostage, the Branch Davidian shootout in Waco, the DC sniper incident, etc. etc. But what is really interesting, and I think useful, are some pearls of wisdom regarding dealing with irrational people and people under lots of emotional stress. So here are a few things you may be able to use in your next software or SAAS negotiations.
1) Behavioral Change Stairway. I had never heard of this concept before, but it may be useful to you. This is how it works: a) you show interest, b) you respond emphatically (which leads to rapport), and c) only then do you attempt to influence. This makes sense, as during any negotiations with a customer, you need to show interest and listen to them, and then show them you understand their concerns and issues (you don’t have to agree to them); only then can you attempt to influence them.
2) Key to Successful Negotiations. Mr. Noesner suggests that it is important to figure out a person’s motivation, goals and emotional needs, and then to make use of this strategically. This is relevant too, as having a deep understanding of your customer’s (and the person you are working with) motivation, goals and emotional needs can really help to close the deal.
For example, maybe the company has been burned by a previous technology vendor by not appropriately supporting the product. Even if you are the best negotiator, you may not be able to get past this issue as the customer feels burned and abused by that vendor, and they don’t want it to happen again. You may have to carry this burden (in some way at least) in the negotiation, and be forced to address the issue.
3) Paradox of Power. Another interesting point is that the harder you push the more resistance you will get. I totally agree with this, and you should definitely remember this in your negotiations. Negotiations are very much about education, and not simply imposing your will on the other party.
4) People Want to Work with People They Like. You probably already knew this, but take this a reminder as the person negotiating the purchase of your technology has a lot more discretion than you probably realize, and if they like you and want to work with you, your deal is much more likely to close.
5) Active Listening. If you don’t know what this is, basically it is repeating back to the speaker what they have said or otherwise acknowledging their statement/concerns. Try this, as it takes practice, but really works.
While software negotiations are not as emotionally charged as a crisis negotiation, it would be worth your effort to try some of these skills if you are dealing with a difficult or irrational person on the other side of the table/phone (even if they are unarmed!). Practice this beforehand though. I plan to try these skills with my kids when they take my TV remote control hostage, as that becomes a crisis negotiation at my house!
Legal Disclaimer: This is for informational and educational purposes only, and does not constitute legal advice. Contact your attorney for legal advice, which should be provided after review of the facts and applicable law.