April 27, 2020

Negotiating Your Sales Deals in a Crisis

By Andres Lares, Managing Partner, Shapiro Negotiations Institute

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.

  1. Start by reviewing notes from previous exchanges with the partner involved. Remember the priorities that were most valuable to achieve the original deal. If you don’t have notes, make a new list and identify as many factors as possible.
  2. Then, make a second list of all the ways this crisis may impact your counterparts. Does it threaten supply lines? Can their workers and teams work remotely to continue operating, or will they shut down? Were there funding contingencies in the original discussion?
  3. Finally, highlight factors that are still volatile. This will help you anticipate how the evolving crisis may cause the landscape to shift again. If you know the organization has laid off a percentage of their employees, for example, they may do so again if the crisis persists.

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:

  1. Know your personal needs. What does success look like beyond merely surviving day to day? Consider immediate survival as well as months and years ahead.
  2. Open with empathy. Crisis demands more relatability and understanding. Ask questions to rebuild transparency and trust, verifying your assumptions. “The Power of Nice” helps maintain partnership and optimism.
  3. Set the stage. Use facts and numbers. The original deal is your anchor; you are now walking through new context and considerations.
  4. Lead the alternatives. Your prep work should have identified several potential pathways based on various leverage points. In crisis, we recommend being more direct than you might be in a typical negotiation because the stakes are so much higher.

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).