Lessons Learned in Negotiating Software Testing

By Randy Wetmore, VP of Sales & Marketing

March 3, 2017

First of all, I am not great at negotiations.  I know how that sounds, VP of Sales and not a great negotiator, what gives? I like to think - like most sales people – “what I do have is a very particular set of skills” that help with prospecting, relationship-building, and solution-building.

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Negotiations, however, are somewhat my Kryptonite.

 My Challenge with Negotiations

I learned a long time ago that the best way to build relationships is to take a genuine interest in people, companies, and products.  While I know that when I put a deal together there are minimum parameters we need to meet in order to be successful, to reinvest into our people, and to ultimately keep the promises we’ve made; I sometimes find it hard not to side with my client.  This gets especially dangerous when someone is asking for terms, pricing, or anything else that may jeopardize the quality of work, or the relationship itself.  

A quick “war story” to set the stage

I was in the end zone of closing a major electronics retailer here in BC; a brand you have definitely heard of, as it is likely that one of your devices came from them.  I was excited.  We, as a company, were on a series of sales “wins” and our Co-CEO and I walked away from our presentation feeling confident in victory.  Procurement phoned to tell us we were the front-runners; however, due to price they couldn’t move forward.

This opened up a series of negotiations that were both intense and frustrating.  There were calls that were borderline threatening around losing the work if we didn’t play ball and meet our competitor’s prices.  This is an extreme example where the conversation was dominated by price and an unwillingness to concede that there were any differences between our competitors and us.  I found out afterwards that we were indeed the vendor of choice, and likely had far more negotiating power than I had assumed.   

Days after we inked the agreement, on a call which I was not a part of, the client’s procurement person asked if I was under my desk crying – referring to the concession we had made to make the deal. 

For various reasons the partnership dissolved quickly, leaving me to wonder what went wrong and what I would have done differently to avoid a similar outcome in the future. My retrospective left me with a few points to ponder:

1. Did you set a Goal?  Good.  Did you WRITE IT DOWN? 

It sounds silly, but from personal experience, writing a goal down increases the likelihood of achieving it.  Forbes did a study a number of years ago comparing the 3% of students with written goals to those who didn’t have written or measurable goals.  Those with written goals were 10 times more likely to achieve them.  There are a multitude of reasons to write down your goals, but in a collaborative sales environment, it’s critical for me to be able to visualize what I want, and to convey that idea to the rest of the team.3    

2. Know your ZOPA – Zone of Possible Agreement

If you know what you want, you have it written down, and your team is aligned, then you have to think of what your negotiation counterpart’s goals are.4

Making assumptions about the goals of your counterpart is essential to success, but this comes with the caveat that they can be flawed, incorrect, or biased. By understanding where two parties’ goals overlap, you understand the borders within which a successful agreement can fall.  Of course during the negotiation process itself, you will need to work to verify and challenge the assumptions you’ve made as you work to discover what the assumptions your counterpart has made about your goals

3. It’s not really gambling, but you still need to “know when to walk away”

Once you understand where the overlap is between your goals and your counterpart’s, it’s critical to firmly define your absolute boundaries. It’s typically much easier to close a negotiation that isn’t in your best interest, but remember that the goal shouldn’t be to just agree to “something”; you are agreeing to something both you and your counterpart can live with, and something that provides mutual value.

You don’t want to give up too much; likewise, you don’t necessarily want to take too much. 

You are better off walking away from an unfair deal than suffering through the agony of watching is slowly erode and fall apart.

4. Perspective and value

Negotiations often crumble when people fail to see things from other perspectives.  I consulted my resident MBA, Ohad Gavrieli (https://www.linkedin.com/in/ohad-gavrieli-66875a59/), and even when explaining the value of sharing perspectives, he used the term “opponent”, but quickly corrected himself. I have done the same thing countless times while writing this. 

It’s easy to focus on what’s important to you, but you may be leaving real opportunities on the table.  If you understand their perspective, what’s really driving them, you may find that your ZOPAs have different goals. In Ohad’s words, “You can discover areas that are valuable for your counterpart, but are less valuable to you, allowing you to reach a more holistic and inclusive deal”.   This can be the difference between a stalemate in negotiations and finding big wins for both sides.    

5. Give and take – Everyone wins

A former sales manager impressed upon me that, if you give something up, you should get something in return – Thanks, Patrick Gatien (https://www.linkedin.com/in/patrickgatien/, @patgatien).

He was right.   

Understanding where you and your counterpart differ on goals and perceived value can dramatically impact your negotiations.  When two parties put emphasis on different aspects of a deal, there’s a huge opportunity for everyone to win.  From my own experience, most people stick to negotiating around the same areas: rates, payment terms, delivery schedules, etc.  Getting creative here, and understanding where you are willing to concede, is usually easier than defining alternative wins, but I highly recommend building a list. 

It’s always more palpable as a manager to hear that your team lost a few dollars an hour, but gained public testimonials or guaranteed referrals which could more than offset the price reduction’s difference.  

Negotiations take all forms. They can range from from who’s picking up the kids after school to how you will invoice a client for a $10 million purchase.  The above was a reflection on some ideas and lessons I’ve learned and hopefully you can recount a point or two during your next negotiation.

 


1. Liam Neeson. (2014, November 3). Retrieved February 27, 2017, from http://wickedhorror.thunderroadinc.netdna-cdn.com/wp-content/uploads/2014/11/liam-neeson.jpg
2. Kryptonite. (n.d.). Retrieved February 27, 2017, from https://i.ytimg.com/vi/LLTSXgQeCyk/maxresdefault.jpg
3. Pros, D. (2015, June 15). 5 Reasons Why Writing Down Goals Increases The Odds Of Achieving Them. Elite Daily. Retrieved February 27, 2017, from http://elitedaily.com/money/writing-down-your-goals/1068863/
4. Spangler, B., & Burgess, H. (2013, June). Zone of Possible Agreement (ZOPA). Retrieved February 27, 2017, from http://www.beyondintractability.org/essay/zopa
5. Poker game, Casino Royale. (2013, November 21). Retrieved February 27, 2017, from http://www.raketherake.com/rakeback-news/wp-content/uploads/2013/11/Casino-Royale-Worst-Poker-Movie-Scenes-RakeTheRake.png


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About Randy Wetmore

Randy Wetmore is VP of Sales with PQA and is responsible for building and maintaining new and existing client relations throughout PQA's entire client portfolio. Randy assists clients in understanding the services and delivery options available and in aligning delivery solutions with procurement and budgetary constraints. Randy oversees engagements across the Retail, Education, Finance, Technology, Gaming, Public/Crown Corporation and Insurance sectors.

https://www.linkedin.com/in/rwetmore/, @wetmorer

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