Getting Your Deal Unstuck

Last month I covered two of the most common reasons that business negotiations reach a dead end: gatekeepers and distracted decision makers. Here are a few more insights to help you revive seemingly dead deals. Employed effectively, these strategies may turn never-ending negotiations into winning business transactions.

Avoiding the Deal Funnel
Desirable business partners can be deluged with offers, sales pitches and partnership requests. To cope with this, they often develop a complex screening system into which a multitude of deals enter but from which only a few deals successfully emerge. While participating in this process, your company will most likely blend into the crowd of prospective partners.
You need a way to stand out. To achieve this goal, consider avoiding the deal funnel altogether. Instead, approach the person within the client organization who suffers from the pain that your company is trying to alleviate. For instance, one of my clients was recently negotiating a deal with a large technology systems integration company. Negotiations appeared to be going nowhere, and after several months, I saw that my client was stuck in a deal funnel with a multitude of other deals waiting for technical evaluation. I cold-called the company’s VP of sales and gave him a 30-second pitch of my client’s offering.
This executive immediately saw the profit potential in a deal with my client, and in a matter of days he took over the negotiations and shepherded the deal through the process.

Creating Back-Channel Discussions
Developing a good understanding of the issues and processes within the client organization is crucial to expediting deal negotiations. Anticipating obstacles before actually running into them will keep you one step ahead of trouble.

One approach is to develop informal communication channels within the organization you are trying to penetrate. Such channels do not have to be high-level ones: You are trying to develop a better understanding of your client, and for that you do not necessarily need to talk to decision makers.

Using your personal or business network is the best way to develop such contacts. Attend a trade show where the client company will be presenting and strike up a conversation with one of the speakers. Respond to an article published by an employee of the company, or go to an event where you know you can meet people who work for the client.

Delay as a Negotiating Tactic
Occasionally the long delays that are plaguing your deal are the result of a calculated stalling tactic on the part of your potential partner or client. For example, a client may be extending negotiations with you while awaiting the outcome of its negotiations with your competitors. In another possible scenario, the more powerful side may use delaying tactics as a method of extracting more value from a deal with a weaker partner. By playing for time, investors can try to squeeze better terms out of financially starved start-ups, who become more desperate with every passing day.

If you have multiple channels of communication within a client organization, you stand a far better chance of discovering the cause of the delay early on in the process. The more sources of information you have about your client’s tactics the better, whether it’s by speaking with other companies that have negotiated with your potential client or by approaching your contact person within the client.

Sometimes, simply discussing your concerns with a partner that seems to be using delay as a tactic will be enough to cause them to abandon this approach. Don’t bet on it, though. The best defense against such tactics is to ensure that the partner does not have anything to gain and may in fact have something to lose by delaying negotiations. For example, promising a sizable discount for any deal closed within a certain period creates a measurable economic cost for delaying the deal and can be a great incentive for your partner to negotiate in earnest. Just make sure that the discount or other tactic is bona fide, or else it may backfire.

If you have good reason to believe that your partner is delaying the negotiations for tactical benefit, a risky but often effective counter-tactic is to turn the tables and set a short-term deadline for decision, after which your company will terminate the discussions. But such ultimatums are risky and will work only if your company has a credible alternative to a deal.