Negotiation – The Importance of Commitment


Negotiation Skills 101

negotiation training coursePrior to commencing any negotiation, it is important to know what you may and may not commit to.
if you are a seller, you need to know what your organisation’s WAP (walk away price) is, regardless of subsidiary terms and conditions.

If your walk away price is lower than the buyer’s, there is room for negotiation.  If not, there will be no deal.

Remember, what you agree to in the negotiation will be reflected in subsequent legal paperwork, so you must be certain that your organisation can deliver.

Training in how to negotiate is critical in assisting you to determine your negotiating partner’s absolute limits (such as WAP).

Negotiation training will be of great assistance to help you work out what areas of another company’s offerings may be subject to flexibility (open to negotiation), and which are fixed (absolute limit).

An expert negotiator ensures that all parties leave the room feeling happy with the outcome.

In sport, there is only win-lose.

The Expert negotiator aims to secure a Win-Win.

PD Training, 2010

RE: Catch up [Scanned]‏
From: gregtalk@hotmail.com
Sent: Monday, 21 June 2010 3:54:31 PM
To: Lawrence Howard (lawrence.howard@hands-free.co.uk)

Hi Lawrence,

Vikki can sometimes be a little less than instantly helpful, especially if she doesn’t know the answers to your questions.

VPS was charging $197/hour (Inc 10% GST[VAT]).  A normal Pro install/ training was 2 x 1.5 hour sessions, so a touch under $600.  Training was generally done on an individual basis.  A travel cost would be levied for out-of-town sessions.  As we will no longer have the vocabs to sell, I would probably add an hour to the first session for on-site vocbuild, so a total of around $790.00 per user.

I rarely discounted software or services, occasionally a vocab or a mic upgrade.

Mining and power – a few isolated small sales, ones and twos rather than department/officewide deployments.  While they do run all the normal functions of any other business, my gut feel is that they are more likely to deal with expansion through headcount and/or outsourcing rather than tech change and process redesign.  Additionally, they are probably being targeted by just about everyone right now, and it may be difficult to get any attention with things like a mailshot/fax shot/calling campaign, unless you have something really innovative in mind.

If we are looking for the low-hanging fruit, I would suggest possibly barristers, small medical practices and boutique (small) law firms:- those have faster decision rates, and it is often possible to speak with someone who can make a decision without going through a 3 month cycle of getting past the gatekeepers.

Re: lists, there are plenty of list brokers around.  I have attached a legal stats sheet from one of them at random.  There are more to be found at this link:
http://www.google.com.au/#hl=en&q=mailling+lists+australia&aq=&aqi=&aql=&oq=mailling+lists+australia&gs_rfai=&fp=b5e480d56b50cf90

Concerning the VPS database, I do not have access to it anymore.  The servers were already turned off brfore I was notified of the liquidation.  Most of the country was selling 12 months support in advance for $88, though I was charging $149.  Given that payment was made in advance, I think there is little possibility of immediate revenue from Support, even if we had the database.

AusTrade is the Government body responsible for gaining Inward Investment into Aus:
http://www.austrade.gov.au/Invest/Investment-Specialists/How-Austrade-can-help/default.aspx
Local (London) contacts:

http://www.austrade.gov.au/Austrade-s-offices-in-the-United-Kingdom/default.aspx


I have done some rough figures on calling costs, working on a 1% hit rate for securing a demo time from a cold call (does not include cost of the list).  This is based on calling from Manila.  Obviously, if the calling is done from here, costs will be higher (local landline connection cost is 24c, as opposed to 6.5c, including staff time, from there).

Per Connected Call Per Dem appointment
$0.065 $14.70
Conversion rate from appointment: 0.7
Calling cost per sale (projected) = $27.50

Calling cost per sale is calculated on (100 x connection cost + fee for securing a demo)/0.7.  I will need to check that the guys in Manila will be ok to work on this model, but it is a starting point at least.

If there is anything else I can do to assist, just let me know!

Kind regards,
Greg


Subject: FW: Catch up [Scanned]
Date: Fri, 18 Jun 2010 22:48:43 +0100
From: lawrence.howard@hands-free.co.uk
To: gregtalk@hotmail.com

Hi Greg,
I’ve just chased up Viki Rigg and Cc’d Bob Anderson on my last e-mail as she hasn’t yet got back to me.
I guess that in the meantime to help establish how we might move forward, the viability etc of setting up something in Brisbane initially it would help me if you could give some thought to the following:
  • What is the market rate $ for training and do you normally sell full or half days.
  • Do you normally sell software at retail price or is it normally discounted and if so by how much
  • Have you previously sold into the power and mining industries – if so what sort of size deals would you typically sell and how long is the sales cycle.  If you haven’t previously sold to this market, do you know of anyone who has or do you have a gut feeling as to what might be achievable.
  • If we targeted legal firms, power and mining or hospitals, where would we go to buy a mailing list so that we can market to those firms in Brisbane.  If you know of any good sources I can then get prices from them.
  • If we were to target hospitals in the Brisbane area has this already been exhausted by VoicePerfect.
  • Are there any old clients that you have dealt with that you could re-establish a relationship with and turn into sales or clients that you were dealing with that are still live and ready to buy.
  • Do any of VoicePerfect’s clients have ongoing support contracts that we could contact and get some immediate revenue from.
I have tried to contact the firm handling the insolvency about purchasing some of the assets – e.g. the database, but not yet heard anything.  However, I am actually not sure how much it would really be worth as I am sure that the consortium / co-operative of Colin Paterson etc have probably been in contact with everyone anyway and they therefore already have some momentum on us.
Alex my Operations Manager is back next week, so I’ll talk to him further about the logistics, administration, technical support etc, but if you can get back to me next week with your thoughts on these things we can start to progress things and quickly come to a decision as to whether Hands Free setting up an operation in Australia is viable.
Have a great weekend.
Kind regards
Lawrence

From: Lawrence Howard
Sent: 15 June 2010 10:33
To: ‘greg Talk’
Subject: RE: Catch up
Hi Greg,
Thanks for sending over your resume and all of the detail in your e-mail.  I am working on things to see if we can make a viable go if things in Brisbane as I recognise what you can do to help us set up an operation in Australia.  Likewise, I also recognise what you could bring to Hands Free in the UK, so let keep both options open.
I fully understand your domestic situation and how that really dictates your working location.  Likewise, I recognise that a tentative suggestion to Kath about the idea of relocating to the Uk could be a sensitive subject.  You are the best judge of whether to suggest anything at this stage or to leave it until there might be something more concrete to discuss.
In the meantime, do you know how I might find out about any incentives from the Australian government about setting up a business in Australia.  E.g.  UK company looking to expand into Australia and employ Australians and help boost the Australian economy…  I don’t know who I would get in touch with to find out – any ideas?
In the meantime I’ve Bcc’d you in to my correspondence with Viki Rigg / Bob Anderson at Nuance so you are aware of any discussions.
Cheers
Lawrence

From: greg Talk [mailto:gregtalk@hotmail.com]
Sent: 14 June 2010 16:57
To: Lawrence Howard
Subject: RE: Catch up [Scanned]
Hi Lawrence,

I really enjoyed talking to you this evening.

Thank you for your kind words, and for remembering me fondly.  It is good to know that mutual friendship and respect endure, even without regular correspondence.

If not for the need to stay close to my boys, I would pack my suitcase and head right over to manage a couple of your sales teams for you, and update the rest in solution selling in the corporate environment — we could really start a whole new arm to your company. I have grown considerably in capability and experience since we last interacted closely.

As for the possibility of you employing me here in Brisbane, it would be great to be able to stay in an industry I passionately believe in, and to work for somebody I already know, like and trust, as long as the figures, projections and admin all look viable.

In terms of my capabilities to run a partially independent business unit, my own Philippine company’s first job margin (after some infrastructure costs) looks like being 20-22%, depending on exchange rates in 32 days (only 6 staff, 4 of whom worked part-time, but still, normal project planning/costing, software sourcing, procedure creation, etc, etc had to be done). I had no external assistance or consultant involved, I created all the project documentation and procedures myself, with assistance from my very talented, but part-time Operations Manager.  As far as I have been able to determine, this is the most high-tech worker survey ever carried out globally.  There is no referral like actual success!

The Australian economy avoided the worst of the GFC, and is improving rapidly (refer current AUD:GBP rates vs 5 or 10 year averages), mainly being led by the resources sector. Areas of rapid growth: Power, mining (? depending on political events), finance (picking up). The area of greatest governmental focus relevant to us is health care (primary, secondary and tertiary care, including a fairly large focus on mental health, and regional primary care).  be aware that while active, there is not the same level of focus on the

The legal mailshot was done on paper, by post/DX.  I believe it was targeted correctly.  It was sent in full colour and used a message of fast, easy operation, coupled with low cost. It might be worth trying something like a banner headline of “Promote your admin staff, reduce costs and increase billable hours” and following on with “your secretary can become your Executive Assistant, and with no typing, you can both spend more time focusing on clients and billable events” — something like that.

We can also have a go with your previously successful primary care campaigns/techniques, as not too many organisations (other than drug companies) focus on primary care here.

If you want me to relocate to the UK, that may be a possibility, depending on my Ex’s reaction, and whether or not her Queensland University of Technology credits (towards a radiographer’s quals) will be recognised.  I hold an European passport and have British citizenship, so there are no visa issues.  Her sister lives in the UK already.  I will not relocate without my boys, so if she (Kath, my Ex) refuses, then the only option is whatever we can arrange here in Australia..

Anyhow Lawrence, I have attached my Resume, and I will enjoy working with (for) you, if the opportunity arises.  Please excuse the fact that I have not done a custom cover letter, but you already know my capabilities.

Warm regards,

Greg

Hi Greg,

It was good to catch up just now.  I’m really sorry how things have worked out at VoicePerfect as I recognise just what a tremendous contribution you made not just to VoicePerfect but to the industry as a whole.
If you can drop me your resume and I’ll start to work out a business plan as to how viable it would be to start an operation in Brisbane + possibly Sydney and if successful then begin to expand out from there.
I agree with you entirely that the whole operational side needs to be clearly planned out to ensure that there is sufficient support in place as well as the logistics of getting products to clients in a timely manner. Alex Horwood is my Operations Manager and has been with us for nearly 3 years.  I will discuss this further with him when he gets back from holiday next week.  At the moment he is in the Norwegian Fjords, so he really is uncontactable.
If you can let me know any thoughts you have on the Australian economy and where you think the quickest wins might be achieved if we were to set something up.  You also mentioned about a mailshot that was sent to legal firms not being very successful – 4 responses from 7000.  On refection, what do you think were the reasons for this?  Was it the right audience but the wrong message or the right message to the wrong audience – or both?
For example we have had a response rate of up to 7% to GP surgeries, but only when we did it correctly.  E.g. an e-mail shot achieved less than 0.5% because GP’s in the UK don’t read e-mails – even those sent by the clinical system provider!  Traditional paper mailshots are more effective – but more costly.  Also, when we changed the message on the paper mailshots to saving money, the admin staff binned them and didn’t pass it over to the decision makers for fear of redundancy.
As an update on how Hands Free Computing has developed over the years, I realised that Gary May was not the right person in the role that he was in.  Likewise, many of the staff he recruited were not of the standard I would expect and this demotivated most of those who were any good, resulting in many of them leaving.  We therefore parted company 4 years ago and he set up his own company.  Since then I have transformed the company and, although there is still some work to do, we have doubled in size and now employ 34 people spread over 2 offices.  We still have the office you visited in Hickstead (but will move in September to larger premises a few miles away) and another office in Sunderland (350 miles north of us) not too far from the Scottish border.
In terms of business, we still do a lot of business in disability and this accounts for a large part of our business.  However, Richard Holt deals mainly with GP surgeries and has 2x sales people working for him selling into primary care.  We have neglected the secondary care side while I was restructuring the business but now feel that the time is right to re-approach this market as I now have a team who can deliver solutions at the required standard.
Anyway, it was great to speak to you earlier.  Keep me up to date with developments for you as I am sure that there will be other people out there who also recognise your skills and abilities.
Kind regards
Lawrence

Lawrence Howard
Managing Director

Hands Free Computing Ltd
Enterprise House, Old London Road, Hickstead, West Sussex, RH17 5LZ
Tel: +44 (0)845 899 0880 begin_of_the_skype_highlighting +44 (0)845 899 0880 end_of_the_skype_highlighting Fax: +44 (0)845 899 0440  Mobile: +44 (0)7768 512451 begin_of_the_skype_highlighting +44 (0)7768 512451 end_of_the_skype_highlighting
e-mail: lawrence.howard@hands-free.co.uk Website: www.hands-free.co.uk

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if you are a seller, you need to know what your organisation’s WAP (walk away price) is, regardless of subsidiary terms and conditions.

if your walk away price is lower than the buyer’s, there is room for negotiation.  If not, there will be no deal.  Remember, what you agree to in the negotiation will be reflected in subsequent legal paperwork, so you must be certain that your organisation can deliver.

Training in how to negotiate is critical in assisting you to determine your negotiating partner’s absolute limits (such as WAP). Negotiation training will be of great assistance to help you work out what areas of another company’s offerings may be subject to flexibility (open to negotiation), and which are fixed (absolute limit).

An expert negotiator ensures that all parties leave the room feeling happy with the outcome.

In sport, there is only win-lose. The Expert negotiator aims to secure a Win-Win.nce with its security and staff training policies.

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One Response to “Negotiation – The Importance of Commitment”

  1. Fiona

    This is a great article- negotiation is definitely meant to be a win-win situation, otherwise you may get the deal this time but the other party will be left feeling hard done by and will not want to do business with you again. It was a short term gain but you have lost the chance to get their future business

    Fiona
    BeChallenged