Negotiating_with_customers

2. Negotiating with
Customers
Gautham

3. So you’re close to getting your
first customer.

4. Negotiations with the customer
begins even before you meet her ;
with your product pricing
Like it or not, you’re negotiating
with your co-founders too,
regarding how the equity should be
split.

5. Learning to Negotiate is a never
ending lesson. We’ll touch upon it
through 3 commonly made mistakes
that startups tend to make
If this is beneficial, we’ll have more sessions

6. Before beginning the negotiation; what
are the outcomes we should be looking
forward to?
1. produce a wise agreement
2. Efficient
3. Improve (at least not damage) the
relationship between the 2 parties

7. Common mistake #1
1. Get locked in a positional
argument
2. Forget the rationale

8. Let’s deep-dive into this.
What’s a ‘position’ in a negotiation?
Let’s illustrate with an example.

9. There’s exactly one orange. Jenny and Joey
both want the orange. The common position is
to split it in half with both getting equal share.
Split by half is the ‘position’

10. Getting locked into positions is bad
scenario. Instead, look at interests and
aim at producing interest based
outcomes
What if Jenny wanted the orange peel to bake a cake and Joey
wants to eat the fruit? Unless this is explicitly discussed,
outcomes cannot be reached.

11. Well, we have a better outcome now.
Unless we really probe into what the interests were, we would have gotten
locked into position that was undesirable for both, but appeared fair.

12. For every interest there usually exists
several possible positions that could
satisfy it.
Opposed positions != Opposed interests

13. Common mistake #2
Stop looking at negotiations like a
zero sum game. You win, they lose
kind.
A win-win scenario is what should be
aimed at.

14. Explicitly state your
interests and reasoning
first and your
conclusions or proposals
(position) later.

15. • Victory != Agreement
• A victory is not what we have to aim for, an
agreement is what the goal should be. This is
tricky to understand.
• Strong positions leads to egos getting entangled.
This is a one way street with no easy way out.

16. Common mistake #3
Assuming that you are dealing
with a soul-less corporation at
the other end.

17. Most often, you’re dealing with
just ‘one’ person
• Are you trying to influence a single negotiator, an absent boss, or some
committee or other collective decision-making body?
• You cannot negotiate successfully with an abstraction like “Airtel” or
“the HR dept of US Tech”. Instead of trying to persuade “IT
Department” to make a decision, it is wiser to focus your efforts on
getting one particular Manager to make a recommendation.

18. • However complex the other side’s decisional process may
seem, you will understand it better if you pick one person—
probably the person with whom you are dealing—and see how
the problem looks from his or her point of view.
• By focusing on one person you are not ignoring complexities.
• Rather, you are handling them by understanding how they
impinge on the person with whom you are negotiating.

19. Explicitly state shared goals, future
oriented shared personal goals
Look for items that are of low cost
to you and high benefit to them

20. A relationship goes a long way in reaching
a successful favourable outcomes
People in large companies have the same
need to appear fair and legitimate. The
other side is more likely to accept a
solution if it seems the right thing to do—
right in terms of being fair, legal,
honorable, and so forth.

21. People Problems
• Perception
• Emotion
• Communication

22. Negotiating is an important skill.
What’s a specific skill you can work on to get increasingly better at this?
Skill at inventing creative options is one of the most useful assets a
negotiator can have. It’ll take a lot of practice to get good at this.
This is chance for the S&M junta in the group to get creative and think outside
the box.
Not inventing is the normal state of affairs, even when you are outside a
stressful negotiation

23. Inventing Creative Options
• separate the act of inventing options from the act of
judging them;
• broaden the options on the table rather than look for a
single answer;
• search for mutual gains; and
• invent ways of making their decisions easy.

24. General Tips

25. 1. Find ways to meet them informally. Try arriving early to chat
before the negotiation is scheduled to start, and linger after it
ends
2. You want them to feel not that you are attacking them
personally, but rather that the problem you face legitimately
demands attention
3. Reduce the number of people whose approval would be
required
4. Continuously look for precedents, within or outside
organisation
5. Threats rarely work, offers work better
6. Write it out in the form of a “yesable proposition.” Try to draft a
proposal to which their responding with the single word “yes”
would be sufficient, realistic, and operational.

26. How far you go in life depends on the number of awkward
conversations you are willing to have