From Conflict to Collaboration: B2B Negotiation
If you’re in business, the chances are you’re no stranger to negotiation.
It’s a skill needed on a daily basis, yet it’s a source of anxiety for many. Especially if you’re trying to win work.
Once a client has shortlisted a proposal and you know you’re in the running, there are two primary paths that a business could take.
- Agree to all of the client’s terms to win the work
- Push back on some key points that help your business operate effectively
While option 1 is most attractive for those who really want the work, or the conflict-avoidant, option 2 is going to serve your business best.
It can be nerve-wracking to push back before the contract is signed, but once you’ve been shortlisted acknowledge that you’ve come this far because you’re worth working with. So now make the relationship work for everyone involved.
Businesses who’ve been around a while are likely to have some key terms that protect them from mistakes they’ve made in the past. At the very least, consider your position from the following two angles before moving forward.
- Milestone and payment terms being the most obvious – make sure those are covered at a minimum. There are also likely to be assumptions within the scope that are worth shining a light on before you move forward.
- Don’t assume your proposal has been interpreted as you intended, think ahead to deliverables that might cause friction in the future and negotiate the scope up front. This can be done strategically so it flags the point for any other proposals the client is also considering, ensuring your playing field is as even as possible.
Is negotiation a zero-sum game?
The challenge of negotiating with people or clients that you’re not yet familiar with, is that it’s impossible to know how they will approach the table. Is every point a battle to be won, or do they believe it all comes out in the wash? Ultimately, it doesn’t matter – work on your own mindset and you’ll be in a better position to respond constructively to any communication style.
Ideally, every negotiation will be collaborative, with parties working together to find solutions that meet everyone's needs. This approach requires open communication, understanding, and trust. It involves actively listening to the other party's needs and concerns, expressing your own clearly and honestly, and working together to find a mutually beneficial solution.
Inevitably there will be situations where it feels like you’re fighting against the people you’re meant to be working with. But even when you’re up against someone who likes to argue the point, one of their primary goals will be for a successful delivery. This means you need to be successful too.
Be mindful of falling into the trap of approaching negotiation as a zero-sum game, where one party's gain is another party's loss. This will only lead to conflict and dissatisfaction. And if you’re already in conflict, this path is likely to further undermine your relationship.
Strategies to transform your negotiation
If you’re struggling with negotiating the scope of a particularly challenging project, or you find yourself butting heads against a combative personality, try these strategies to get yourself back on track:
- Put yourself in their shoes: Empathising with the other party’s needs, priorities, and goals, will give you a better understanding of what is and isn’t negotiable.
- Consider long-term relationship goals: A repeat customer is going to generate more revenue, so think about what you need to do to build a strong relationship from the start. Mutual respect, reliability, and trust will go a long way.
- Communicate effectively: You’ll be surprised what you can get away with as long as you keep your client informed. If you have bad news, get ahead of it. And if there is something that’s not working on your side of the table – express it. Invite the other party in to solve the problem together to create mutual buy-in for the solution.
- Win-win: Price is often hotly contested in any negotiation, but if you’re only focusing on that then it’s likely to feel that there is a winner and a loser. In reality, there are many points that can be negotiated – cost, scope, time, deliverables. Consider where you’re able to move if the turnaround time needs to be shorter, or the cost needs to be lower. Showing willingness to be flexible will build good faith, and you’ll be in a better solution to find solutions that benefit everyone.
Working towards collaborative negotiation
Improving your collaborative negotiation skills will lead to better outcomes. It can help you manage project delivery more effectively, improve your client relationships, and ultimately grow your business.
Rather than approaching negotiations as a battle to be won, think about what you’re happy to give and take to reduce the potential for conflict. Go beneath the surface of your wants and examine what your motivations truly are. Then, to the best of your ability, do the same for the other party – consider things from their perspective so you can begin negotiations from a position of respect and empathy.
By entering negotiations with the mindset of growth and collaboration, you’re more likely to have a positive impact on the other party’s mindset, too. Renowned negotiation expert, William Ury, once said, "Conflict can make us think small. We reduce the whole thing to a win-lose battle between us and them. Often, the bigger the conflict, the smaller we think. The secret is to do the exact opposite. Instead of thinking small, we need to think big. We need a wholly different approach. Instead of just starting from the problem, we need to start from the possibilities."
By shifting your perspective and experimenting with different strategies, you can turn negotiation from a source of conflict into an opportunity for collaboration. Ultimately laying the groundwork for more successful projects and improving your chances of building long-term, profitable, and mutually beneficial relationships.
This article is part of our 'setting yourself up for success' series.
If you like finding new strategies to try in your business, check out the below articles:
12 things you need to thrive as a service-based business.
Nailing project discovery meetings
Take the pain out of B2B proposals
