In a previous post I spoke about negotiating past the agreement at hand. As promised, here are some things to consider:
Does my counterpart’s opinion of myself or the deal matter to me?
Unless you are buying a knickknack souvenir on vacation (in which case, feel free to skip this post altogether and enjoy your vacation!), odds are the person you are negotiating with will be able to affect you in some way down the road, be it through reputation, referrals, how they comply (if at all) with the agreement or in any number of ways.
But if there is a relationship in place, be it a requirement for future performance, a partnership, or even the possibility for referrals (or public complaints), you might want to look past the “Yes” and consider some additional points:
1) Does my current negotiation strategy improve or compromise my relationship with my counterpart?
2) Are my counterpart’s interests being met? If not, what does that say about the medium to long term viability of this relationship?
3) Is the deal we are putting together self-policing? To wit: are there built-in incentives to both parties that encourage them to carry through on or even add value to the agreement?
4) Is there a dispute resolution clause? Hint: there always is an implicit dispute resolution clause: the courts. Is that the one you want to use or would you prefer to build in more viable options (mediation, arbitration, confidentiality clause, choice of venues, etc, or any combination of the above)?
5) In the case of partnerships, is there a dissolution clause in place? Example: shotgun offers, a formula for valuating the business in case of a buy-out, a non-compete clause, etc).
6) Are there contingencies in place to address events outside the control of the parties? If sales exceed x then a discount of y applies. If the price of concrete drops below x then the agreed price proportionately matches the drop, etc.
7) Is there a referral fee for additional business? Turning clients into champions is good business – do it as often and effectively as possible.
Finally, a bonus tip: Once you have a deal in place, consider reopening discussions and trying to find an even better arrangement. This can be tricky, but can pay major dividends. If you’ve done your homework on the relationship and built trust and an environment of cooperation (instead of purely competition) there is often an opportunity to review the arrangement looking for opportunities to increase value, either between the parties or by an outside agent. All parties have the option to stick with the deal in place, so there is a good chance they will be more forthcoming about their interests and creative with their solutions. And again, if they don’t like the new deal they have the option of sticking to the deal in place. Handled properly, there is an enormous opportunity for value creation.
“Yes” is a great thing to hear, but it’s a jumping off point, not a destination.