10 Tips for Contract Negotiations Success (#7 is often overlooked!)
Contract Negotiations Article Summary
In this article and embedded video I’ll share 10 Tips for Contract Negotiations that can help you close more deals. Our focus is on creating a ‘win-win-win’ mindset of collaboration so that we can negotiate a deal that works for all sides.
I’ll share the video lesson upfront as well as the written tips from the video below.
Editor’s Note: We’ll use hospital sales contracting as our real world example for the video portion of this lesson.
Contract Negotiations — Video Lesson
Contract Negotiations — Why Listen to Me?
Because I can help you.
- I have 20+ years in contract negotiations experience at B2B and personal level in diverse set of industries (hospital sales, insurance & financial services, and real estate contracts).
- The example in the video focused on hospital sales — I’ve spent the last 10 years in medical device and pharma sales and have closed over $90+ million in contracts for individual Hospitals, Systems, and GPOs.
- My Contracting Business Acumen includes Contracting Analysis, Drafting Agreements, Negotiations, Formulary/Protocol projects, Supply Chain, GPO, and System Agreements, Reimbursement, and T&C’s.
If you like my tips, connect with me so we can help each other…
Contract Negotiation Best Practices — Summary of Tips
- Right Attitude
- Know Your Customer
- How to use Evidence
- Don’t be Hasty and Miss the Way
- The Influence of Others
- What am I Buying?
- Be Creative with T’s & C’s
- Connect the Dots
- Cross the Goal Line…and Beyond
Contract Negotiation Best Practices Explained…
IMPORTANT NOTE — all these tips are explained in more detail in the video example. Be sure to watch it to get all the pearls. :)
Tip 1 — Right Attitude
- Avoid the “Us vs Them” and use an “US” Mindset.
- Focus on the WHY. You all want to do business together so find a way to make that happen.
- Focus on Collaboration to get over the finish line.
- Don’t take it Personal — even if it gets nasty. Understand that everyone has a job to do and some people are trained to try to use manipulation/aggression to get what they want. Combat Aggression with Calmness and diffuse the situation.
Tip 2 — Know Your Customer
- Apply the wisdom of Sun Tzu — “Every battle is won or lost before it is fought.” Know your customer’s pain points before the negotiations begin.
- Conduct a Quantitative and Qualitative Analysis of the customer to see the big picture from their POV.
- Use pre-meetings with key personnel who work for the customer (but won’t be at the negotiations) to gain inside intelligence.
- Talk to Key Opinion Leaders within the customer’s network who won’t be at meeting but could influence the customer.
Tip 3 — How to use Evidence
- Provide Data to backup your claims — Examples: value sheets, usage history, comparison to similar customers.
- Use Testimonials.
- Review real situations of benefits at this institution to showcase what your company has done to help this customer over time.
Tip 4 — LISTEN
- Let the customer talk. Listen. Take notes.
- Really HEAR what they are saying — the pearls they provide are the keys to really understand what they want/desire/NEED in order to get the deal done.
Tip 5 — Don’t Be Hasty and Miss the Way
- Use the Wisdom of Solomon — avoid being hasty or angry. Use patience and calmness to bridge the gap to your customer.
- If things are going south, take a breather, don’t agree to do things under pressure.
- If don’t know all answers, get back to them on those specific items but meanwhile continue moving forward on what you can agree on today.
- Remind everyone of the goal — to do business together. Focus on the end game and the benefits to all when the deal is done.
Tip 6 — The Influence of Others
- Using your Pseudo Sales Force — insiders who work for the customer who believe in your product can ‘sell’ the idea from within the customer’s ranks.
- Prime the Pump before negotiations, during negotiations, and through the deal close — keep your insiders working for you the entire time.
Tip 7 — What Am I Buying?
- Ensure contract signers know what they are buying. Remember, the people who sign are often not the front-line users of your product. Do they really understand the product? If not, lay it out for them so they get a real flavor for the benefits doing business with you can provide to them.
- Focus on VALUE vs just bottom line pricing.
- Focus on what’s really important — AKA that by buying your product, the customer will in turn be able to make their own customer more satisfied — thus everybody wins!
Tip 8 — Be Creative with T’s and C’s
- Offer desired ‘premiums’ (free training, reimbursement advice, extra equipment/supplies, etc).
- Adjust contract time period — match the customer’s fiscal year to help them with budgeting, offer longer/shorter contracts, offer multi-year contracts, etc.
- Customize Terms and Conditions to your customer’s desire where possible.
- Offer system agreements if your customer is part of a group.
- Use volume based pricing — the more your customer buys the lower the unit price.
- What ideas do YOU have?
Tip 9 — Connect the Dots
- Trace the path from your product to your customer’s ‘sales’ to their (end-user) customers’ happiness.
- Create a Win-Win-Win Mindset.
Tip 10 — Cross the Goal Line…and Beyond
- Keep the ball moving towards the end zone with all parties. That means follow-up on what you promised to deliver. Follow-up on any customer questions/ideas. And keep pushing to the close.
- BUT, this also means follow-up AFTER the deal is signed. Ensure the customer is happy and that they are using the product effectively. Offer them ongoing training and touch points. Stay involved. Keep them happy and develop them as a partner who will not only be happy with you but will tell others too.
These 10 tips have helped me achieve contract negotiation and sales success for 20+ years. I’m certain they can help you too. And if YOU have a tip to share with me, please do so.
What to Read Next…
- Essential Guide to Pre-Call Planning for Sales — The Pharmaceutical Sales Edition
- Pharmaceutical Sales Call — Best Practice Ideas
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Originally published at thathelpfuldad.com on May 4, 2018.