What to do When a Negotiation Sours

Here are the three most common problems, with short term and long term solutions:

Problem: The customer threatens to go to a competitor.
Short Term Solution: Say something vaguely nice about the competition (e.g. “well, they’re a very fine company”) and then explain why your solution is unique.
Next Time: Treat the sales process as a means to eliminate the customer’s options. At the beginning of a sales cycle, the customer is typically open to multiple solutions from multiple providers. You need to convince the customer that your product or service is the only one that can adequately fulfill the customer’s needs. Don’t start negotiating the deal until you’ve aced out the competitors.

Problem: The customer cites internal politics as the source of an unreasonable demand.
Short Term Solution: Say something understanding and sympathetic (e.g. “Gee, it must be hard when other groups fight against your success”) and then ask questions that cause the customer to feel the pain that will result from not having your solution. (e.g. “What are you going to do when inventory costs skyrocket again?”)
Next Time: Develop at least three contacts inside the customer’s organization, so that you’re aware of any real political problems and can head them off before they become problems during the negotiation.

Problem: The customer surfaces a list of last-minute demands and insists that the deal is off if those demands aren’t met.
Short Term Solution: Call the bluff. Last minute demands that magically appear after a negotiation has been largely completed aren’t what they seem. The customer is probably testing you to ensure that the negotiated deal is the best possible agreement. Hold steady, and the customer will be relieved and will take the demands off the table.
Next Time: Spend time during the sales cycle to articulate your firms policies and precedents and why they make sense for both firms.

The above is based upon a conversation with negotiation guru Randall Murphy, president of the sales training firm Acclivus R3.