Adversarial or collaborative? Which style prevails in a vendor negotiation?

 Pat Bohnenkamp

Pat Bohnenkamp

We were recently retained by a mid-market financial services company to lead a negotiation. While there were competitive products, our Client really wanted to buy from this vendor and, unfortunately, the vendor’s sales team was keenly aware of this. As a result, the vendor’s attorney immediately took an unusually hard line on whose contract to use... his.

Ok. I know most readers will assume that the negotiations were doomed to be drawn out, contentious, painful and, ultimately, unsuccessful for our Client, and some won’t blame the attorney for taking a hard line when he had the leverage. Contrary to conventional wisdom, however, this created an opportunity for us to make up ground. Our Client, once they engaged us, had committed to our process, which included clearly establishing their priorities and understanding the landscape.  Therefore, we knew what was important, and what wasn’t, and we knew our Client didn’t have a contract template that was well suited for this product. So, when the attorney demanded we use their paper, we conceded easily and without argument, merely stating that, in the interest of working together, we would work off their paper. 

Our initial redlines to their agreement were also purposefully light. We maintained a reasonable, measured, and collaborative approach to our proposed modifications, focusing on protecting our Client’s priorities and keeping any other changes to a bare minimum. It was clear the vendor’s attorney saw this as weakness on our part, and as further evidence of his perceived position of leverage.

Unfortunately, the initial conference calls to go through our redlines were not productive, because the attorney argued every little nit-picky point and conceded only those things that clearly meant nothing to him. We accepted those concessions but offered no further material concessions of our own. As we worked through the document, I’d casually throw in that we’d not modified this section, or that section, in the interest of progress. When he would ask for us to reconsider something we proposed, I’d ask how our position was unreasonable. He was using an adversarial, or what I call ‘tick-box’, style of negotiation where, for one party to win, the other must lose. And because he had the leverage, he felt we should do the losing.

However, rather than play by his rules, we reversed the field entirely and suggested that he needed to stop nit-picking and start accepting our minimal, reasonable changes that addressed only our highest priorities. In other words, because we offered concessions early (largely on our terms), we could dig in our heels as discussions progressed. The attorney lost it, and kept arguing that we were asking and asking, but not giving, which is how a tick-box negotiator thinks. He was resisting losing the advantage in ‘wins’ that he had so carefully built up. 

My response was that we’d agreed to start from his preferred terms, and that the only outstanding issues were those things most important to us. I reminded him that his wins were all the issues that we weren’t discussing… all of the changes that we could’ve made but didn’t.  I told him that these were huge wins for his company, but that, in exchange, we needed a few reasonable things too. I thought his head might explode and we had to adjourn so he could cool down.

I then had my Client Project Champion call the vendor VP of Sales and communicate that negotiations had not progressed to her liking and that, if we couldn’t stop the nit-picking and make progress, my Client would need to pivot to an alternate product, even though we preferred the vendor’s product. This poor vendor VP had just sat through these brutal calls hearing his lawyer belligerently argue the most trivial of points while being unable to articulate how our request was unreasonable in the first place. The VP was clearly uncomfortable being on the adversarial side of the discussions and knew that his side looked unreasonable (and slightly unhinged). He told my Client that he’d need a few days to sort things out and, three days later, we received a new draft agreement, completed by a different attorney, with minimal changes to our original proposed draft. Additionally, the vendor made major concessions on pricing and a few other key commercial terms. The final deal, which was signed only a couple of days later, was nearly the ‘best case scenario’ from our negotiation matrix.

In the end, the vendor was saddled with the damage that this attorney’s adversarial style had caused, and to undo that damage, which was exacerbated by the fact that we were nothing but nice, they had to voluntarily concede more than they would have had they merely taken a collaborative approach in the first place.

So, does collaboration usually beat adversarial? And aren’t their other negotiating styles? What’s with the extremes? Tune into to the next post to get answers to those questions and more as we pull back the covers on negotiation styles.

Thanks for investing time in reading the Seprio Blog, a place to find stories, tips and other pearls for you to protect your business priorities with best practices in negotiating, strategic sourcing, and vendor management. I’m your host and Seprio Master Certified Negotiator, Patrick Bohnenkamp.

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