Good negotiators understand position. Intimately knowing the landscape – the market and all parties’ needs – can dramatically shift the approach and terms of a negotiation.
But what happens when the landscape crumbles?
The spread of the COVID-19 coronavirus has dramatically altered business operations and cast uncertainty over the markets. Many businesses are paralyzed. Most are implementing immediate budget evaluations (and freezes) to cope. These evaluations will halt in-progress deals, and they will impact existing sales deals or partnerships, too.
While COVID-19 is a crisis of speed and magnitude most were unprepared for, it is not the only crisis businesses face. No matter the cause, every negotiator should be prepared for crisis re-negotiations. Our playbook prioritizes simplicity and clarity through each stage: Understand the landscape, identify leverage, and own the alternatives.
Understand the New Landscape of Sales Negotiation
It should go without saying, but we in sales are not robots. We’re people. When crisis shifts the landscape, most parties involved feel uncertain, anxious, and scared. These emotions will cast a shadow over initial discussions. It is not your job to remove them but to consider their impact.
Identify Your Leverage
However you choose to establish the new landscape (we really recommend putting pen to paper to make those lists), the next step is identifying which pieces are most critical. Strengths and weaknesses alike (on both sides) will reveal points of leverage for the discussion.
Imagine a tenant temporarily out of work. They can’t afford rent. Their landlord won’t be happy to go rent-free, but it may be difficult to find a replacement tenant. This reality gives the renter more leverage than they might have realized (and, if multiple renters come together, this could create quite a powerful shift in leverage).
Leverage doesn’t need to be complicated. Identify the primary needs, pressures, and challenges of each party, as well as their relative situation in the new landscape you’ve established.
Own the Alternatives
Hypotheticals quickly become real re-negotiations; since a deal is already in place, use this to anchor your sales conversation. It is less about “striking a deal” than it is about protecting all parties’ interests as best as possible.
Here, we tweak many of the same practices used in the original negotiation:
Don’t be afraid to ask, “What might be possible if…”
If you’ve thought of a creative alternative your counterpart hasn’t, lead by proposing something new. Openly ask what is possible. In crisis, flexibility and ingenuity can save a deal or relationship.
Crises come from new forces rapidly altering the landscape of an original deal. Re-negotiations must salvage the factors that remain and look for the best outcomes possible. Proactive steps set the foundation for leadership, so don’t delay any longer. Own the new reality.
Andres Lares is managing partner of Shapiro Negotiations Institute (SNI).