February 17, 2011

If my company was buying a red Toyota Camry

red toyota camry
The common perception is that it’s difficult for small companies to negotiate with big companies when it comes to things like strategic alliances, marketing agreements, contracts or mergers and acquisitions.  Based on my decade-plus experience negotiating for a big company, I can say definitively that this is a load of shit.  If anything, it is usually the small company that has more business savvy and ends up negotiating the better deal.  My company is particularly bad when it comes to negotiating.  

My clients, i.e. the business line monkeys, approach deals like they’re an NBA wife on her first shopping trip to Neiman Marcus or a petulant child during Christmas who cries about wanting the hottest toy.  It is often more difficult negotiating with the internal bastards than it is with the other side.  They are so quick to volunteer concessions that I often think about wearing a French lapel pin into our negotiation sessions.      

I frequently tell our pansies to approach deals like they're negotiating with their own checkbooks instead of with corporate funny money.  Pretend you’re buying a car.  How would you negotiate?  Unfortunately with these knuckleheads, it would go something like this:

For sale by Small Company (SC): 2004 Red Toyota Camry, 96K miles, asking price $8,000

Big Company (BC): Hi, we’re interested in your red Camry.  A 2004 model with such high mileage is such a rare find.  It must mean that the car is well-maintained. 

SC: Yes it is.  Also, Consumer Reports named it "Car of the Year" in 2004.   We think that someday it could be a collectible, especially since it is in limited-edition red.  How much are you offering for the car?

BC: We thought you were asking $8,000?

SC: We are.

BC: OK, since it will likely be a collectible and we’re pretty sure other people are very interested in the car, we will offer you $8,500. 

SC: Pause.

BC: Hello?

SC: Yes, we’re here.  Ok, I think $8,500 is in the ball park.  Can you go any higher?

BC: We can do $9,000 if that is better for you guys.   

SC: That is better for us.  We do have a few other people who are interested in the car.  In fact, someone is calling us on our other line as we speak.

BC: We really want the car.  How about $10,000.

SC: Ok that works.

BC: We can do $10,500.

SC: You can stop now.

BC: $11,000 but we really can’t go much higher.

SC: How high can you go?

BC: $12,000.

SC: Sold, the car is yours.

Obviously I've changed the details, however, the above was essentially what happened on a recent deal.  Where is that French lapel pin…


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