negotiating style

Negotiating Style Part 3

Posted Leave a commentPosted in Marijuana Businesses, Negotiation

The negotiating style of the person you are in discussions with will set the tone for contract negotiation. Pre meeting preparation will enable you to adjust your approach and strategy for each negotiating style.

The most common style of negotiator is the Competitor. The Competitor is motivated to achieve their own outcomes without concerns for the other individual’s business interests. This style of negotiator is not interested in long term relationships or business reputation. They are more interested in winning than reaching an agreement. This creates deadlocks. The Competitor is more likely to walk away from negotiations rather than make concessions. This negotiation style can sabotage a company’s growth and jeopardize business relationships.

Stay calm and focused on the terms of the agreements. Your BATNA (Best Alternative to a Negotiated Agreement) is the standard you use to determine if terms are too unfavorable to accept. Accepting a competitive negotiator demands will be interpreted as weakness and they will request more concessions. Firmly restate your position using strong language “we require” or “we need.” Do not use “we’d like” or “want” with this type of negotiator.

The Accommodator negotiating style is focused on building relationships. This negotiating style offers generous product and service concessions. Giving away value early in the negotiation leaves them with little to offer as talks continue.

The Accommodator negotiating style can lure you into reciprocation and obliging you to a larger concession. This negotiating style can also be an indication that they are an incompetent negotiator. Their generous concessions could jeopardize the viability of their company. What they are offering has no value if  their company has no value.

The Avoid negotiating style can be best described as “passive aggressive.” Avoid is used by people who dislike conflict. This behavior delays coming to a contractual agreement. The business with the greatest urgency will end up losing. Avoidance is a common tactics when sales/vendor timelines are crucial.

Do not disclose information about the urgency of your need.

Determine if the value of investing your time to bring the issue back to the table outweighs the benefit.

Set a timeline with clear expectations, details and dates.

Compromise negotiation style consists of “haggling” and “splitting the difference”, without any understanding or value creation taking place. This negotiation style involves one or both negotiations settling for less than they wanted or needed.

If you make concessions without a strong rationale, the other party may assume you will continue to make concessions.

The negotiator that starts with the more ambitious opening position is likely to win. If the other party has the more ambitious opening position, quickly bring them back to reality or counter balance with an extreme position.

Compromising style is often confused with Collaboration style negotiation. Collaboration ensures both parties’ needs or goals are met and creates mutual value.

Often referred to as ‘expanding the pie’, collaborative negotiators are willing to invest more time and energy in finding innovative solutions, feeling secure in the fact that there will be more value to share out later on.

Collaboration is Win-Win negotiating.

Quiz to determine your negotiating style.

Addison Morris has been a serial entrepreneur since 1968. Addison believes that in the politically charged, competitive cannabis, hemp, and cbd marketplace, business principles and best practices are a crucial element for success. She speaks and teaches marketing, and negotiation skills. Her goal is to move women from empowerment into power through business education, resources and connections. Addison is the founder of the Women’s Cannabis Chamber of Commerce.

Negotiation Strategy

Negotiation Strategy Part 2

Posted Leave a commentPosted in Cannabis Businesses, CBD, Hemp, Negotiation

Negotiation strategy is a learned skill. This is Part 2 of a 10 part series on the Art of Negotiating Contracts within the Cannabis, Hemp, and CBD Marketplace, published every Friday.

Negotiation strategy is developed prior to your first meeting.

Know your numbers and your bottom line. Prepare a spreadsheet to determine your lowest price point. If necessary are you comfortable with accepting the lowest price point?

Analyze the long term benefits of entering into a contract at your lowest price point.

Does the contract contain an option to renegotiate at a later date?

Is there growth potential?

Does the other company offer an opportunity for marketing exposure and market positioning for your products or services? If you are negotiating with a major chain to carry your product, consider the brand exposure this offers. How does that affect your current marketing budget?

Is your company capable of handling an increase in production or service demands?

Negotiation strategy involves more than price points. There are other aspects of the contract you can leverage, such as shipping costs and fulfillment schedules.

What concessions are you willing to make? What are the real costs of the concessions?

The first contract you receive is just that – the First.

Enter into the negotiation with your ideal contract. Be prepared with alternatives.

One strategy recommended by some negotiation trainers is to present all your alternatives in the beginning. I do not endorse this. By giving them options you have given away your power and leverage. You have eliminated negotiation and made it a Yes or No situation.

It is important to listen.

Over the course of your business life there will be situations where you are writing and presenting the contracts and situations where you will be presented contracts written by other companies.

Listen to the concerns and comments regarding the contracts. Ask questions to insure that you have clarity. Initiate your negotiation strategy.

Price point too high? Your counter offer: We would consider paying shipping to your distribution center which would offset your price by………..

Their counter offer: Price decrease, no shipping charges. Can you afford to do both – what is your bottom line?

Why is your product or service of value? 

This is the point where you justify your asking price. You will need to know how your product or service compares to your competitors. Better quality is not a complete answer.

If your products or services appear equal to your competitors, emphasize your business reputation, superior customer service, guaranteed ship dates, etc. Your brand recognition and marketing strategy can also make you more desirable than your competitor.

At this point negotiation strategy sounds relatively simple. Negotiating is basically common sense, preparation, and communication.

What can make negotiations challenging are the personalities involved, their negotiating techniques and how you adjust and adapt your approach in order to achieve a Win-Win contract.

We will cover each negotiation style and technique in upcoming segments.

Addison Morris has been a serial entrepreneur since 1968. Addison believes that in the politically charged, competitive cannabis, hemp, and cbd marketplace, business principles and best practices are a crucial element for success. She speaks and teaches marketing, and negotiation skills. Her goal is to move women from empowerment into power through business education, resources and connections. Addison is the founder of the Women’s Cannabis Chamber of Commerce.