Ben Neumann: Views From The Trenches

I recently taught a class on negotiation strategies and tactics. As part of my preparation for this I started formulating a set of guidelines using some of the obvious thing most people know (or should know) and adding some of my personal experiences. The results are my "Rules of Engagement" ;-)

I'm starting this post by making it crystal clear that negotiation is a process that can be learned! By following a number of rules, which I have outlined below, and practicing (repetition, repetition, repetition is the mother of retention), virtually everyone can fine-tune their skills at negotiating deals in which everyone wins. Please note that the “everyone wins” part is very important when you negotiate and want to continue a good relationship (i.e. funding/financing deals, leases, or salaries) with your counterpart post negotiations. If you are negotiating a one-time deal (i.e. bazaar, flea market) its more of a guideline than a rule. You'll notice that the majority of deals you negotiate, however, fall under the win-win rule.

Ok, here goes:

1. Always remember that everything is negotiable! Don’t narrow a negotiation down to just one issue. Develop as many issues or negotiable deal points as you can and then juggle in additional deal points if you and the other party lock onto one issue. Line up deal point early that you are willing to give up later.

2. Form and crystallize your vision of the outcome. In my book that is the NUMBER ONE most important rule, success of which requires some of the other rules. The counterpart who can clearly visualize the end result will most likely be the one who guides the negotiation. “Buy into” and “believe in” that you will get this deal done in a way that works for you.

3. Set a goal for each deal point. Define your minimum level of acceptance for each goal. If you aren’t clear on your goals, you will end up reacting to the propositions of your counterpart.

4. Prepare in advance. Information is power. Obtain as much information as possible beforehand to make sure you understand the value of what you are negotiating. Remember, very few negotiations begin when the counterparts arrive at the table. Keep the 5 “Ps” in mind: Proper Preparation Prevents Poor Performance!

5. Ask questions and address your concerns. Concerns are sign for missing clarity. Clarify information you do not understand. Determine both the implicit and explicit needs of your counterpart. Make sure your questions are or at least sound educated and on point or you risk losing credibility.

6. Listen-listen-listen. Please don't formulate your next thought while your counterpart is talking to you. When you do a good job listening, you not only gain new ideas for creating win-win outcomes but also make your counterpart feel cared for, understood, and valued. This also allows you to find out what the other party wants. If you assume that his or her wants and needs are the same as yours, you will have the attitude that only one of you can “win” the negotiation.

7. Aim your aspirations high. Your aspirations will likely be the single most important factor in determining the outcome of the negotiation. You can aim high just as easily as you can aim low. Good deals meet somewhere in the middle. The higher you aim the more you will see that middle being closer to where you actually need it.

8. Be flexible and develop options and strategies. Successful people are those who have the greatest number of viable alternatives. They can "go with the flow". Similarly, successful negotiators are those who have the most strategies they can use to turn their options into reality.

9. Think like a dolphin. I love Dolphins (as everyone who has been at my house can attest to). The dolphin is the only mammal that can swim in a sea of sharks or in a sea of carp. Dolphins are able to adapt their strategies and behaviors to their counterparts. Remember, even when negotiating with a shark, you always have an option - you can walk away!

10. Be honest and fair. In life, what goes around comes around. The goal in creating win/win outcomes is to have both counterparts feel that their needs and goals have been met, so that they will be willing to come back to the table and negotiate again. An atmosphere of trust reduces the time required to create win/win outcomes.

11. Never ever accept the first offer. Often, the other party will make an offer that he or she thinks you will refuse just to see how firm you are on key issues. Chances are, if you don’t have to fight a little for what you want, you won’t get the best deal.

12. Deal from strength or act the part. Be strong, and exert confidence. If that’s not possible, at least create the appearance of strength and confidence. If the other party thinks you have no reason to compromise in your demands, he or she is less likely to ask you to.

13. Find out what the other party wants. Concede very, very slowly, and call a concession a concession. Giving in too easily tells the other party that you will probably be open to accepting even more concessions.

14. Be willing to walk away. This is a very important part of any negotiation process. If you counterpart knows or senses that you need or want the deal badly you're toast! Be willing to let it go. If you know you are too desperate or too attached to the deal let someone else negotiate for you.

15. Be cooperative and friendly. Avoid being abrasive or combative, which often breaks down negotiations. Look your counterpart straight in the eye when you talk. Laugh, if something is funny, but don’t smirk or grin. Persuasion has a major part in any negotiation success.

16. Use the power of competition. Someone who thinks it’s necessary to compete for your business may be willing to give away more than he or she originally intended. Sometimes just the threat of competition is enough to encourage concessions.

17. If no competition is there, create it, if you can. If you know what your bottom-line is to get the deal done today make sure you tell your counterpart that, once you conclude that the negotiations have gone stale (i.e. if you can do "X" I’m willing to go for it right now, otherwise I will need to think about it some more/shop around).

Posted by Ben Neumann at 02:02 PM | Permalink | Comments (1) | TrackBacks (1)

Ok, I admit it; I’m a Foodie! Big time, and I really mean BIG TIME! ;-) Having a sophisticated and fun 3 hours+ dinner with my friends is on of the pleasures of my life and most people who know me have experienced these “mini-vacations” with me at one time or another. Pete and I are pretty much on the same wave length on the food situation (unfortunately you can tell when you see us) ;-). Chris is still “in training” when it comes to that, but I’m working on it!

In any event, this weekend we went to the Belvedere Restaurant at the Peninsula Hotel in Beverly Hills (the best hotel in L.A.) to enjoy their Sunday night special. Shortly after we were seated we found out that they did no longer offer the special dinner we came for. So, we told the waiter that we decided to no have dinner there anymore. As you might know, this is where most “regular” restaurants would drop you like you’re dead weight. Not so the Peninsula! Our waiter apologized that the hotel decided to change the menu and that we made the trip without getting what we came for. Then he left our table only to return 1 minute later with another bread basket, butter, some pistachios and the manager who asked us, which other local restaurant he may call for us to get us in right away. Amazing! We ended up having dinner at Spago just about 30 minutes later (thanks the Peninsula call we got right in). Service is what separates the boys from the men and it doesn’t become more clear than in situations such as this. Even though the Belvedere was not able to “sell to us” they still "serviced us", saved our evening, and ultimately gained three new evangelists. What a way to do business! This is right in line with my personal philosophy on marketing. Chris and I are both members of WOMMA (Word of Mouth Marketing Organization). I’ll be writing more about service, word of mouth marketing, and how these two can make or break a business in the future.

Posted by Ben Neumann at 12:37 AM | Permalink | Comments (1)

I'm a big proponent of team work. A team to me is at least 2 people working together on a common goal. That doesn't mean that there is no room for the single "star", but these "stars" are usually more like shooting stars that flare up for a while and rock your world before they disappear. Great teams, however, by the simple concept of redundancy, have a much better shot at lasting success. In light of this I thought I share the following with you.

Yesterday I’ve had a weird conversion over lunch with one of the people that work for me at Globat. While no laws were broken ;-) I decided to name him Jack for good measure and leave his real first name out of this post.

Jack’s been working for Globat in a technical capacity for about 6 months now and last week he approached me with what he considered to be a “really great idea to drive additional sales” out of our already pretty successful affiliate program (we currently have about 12,000+ affiliates). So I took him out to lunch today to see what he came up with.
I won’t get into the details of his idea as it’s as irrelevant to this post as his real name, but while his “invention” has some interesting aspects I seriously doubt that it would have a significant enough impact to justify a considerable amount of development work, and I told him so.

What “bugged” me about the entire conversation and situation overall was the fact that he told me that he developed and implemented this idea in his prior company (which potentially means that his great idea is that other companies intellectual property. Additionally, he told me that this time around he “wanted to be part of it” should we decide to implement his idea. I was caught a bit by surprise with this request (his promotional idea really wasn’t that big a deal), because Globat as well has a pretty tight intellectual property agreement with all its employees.

I look at this, of course, with my CEO had on. If you work for a company than the company pays you for your talent, ingenuity, and to help making that company stronger, more competitive, and a better place to work. Everybody in a company has a part in making what they work on, alone or in a team, a success. I don’t see why I would agree to something where we single out someone from that general idea of teamwork. I am a strong believe in rewards, so I would certainly bonus someone for awesome ideas. However, although it might end up in the same wallet, there is a huge difference between goodwill rewards and demanded compensation. I was surprised by the request because I was and still am (kind of) under the impression that Jack considered himself part of the team.

I guess I write this up as a good example of why it is worth to continue my search for people that love to be part of something a group creates instead of being the Kobe’s of a basketball team.

Posted by Ben Neumann at 09:41 AM | Permalink | Comments (0)

I have somewhat of a radical attitude toward seasonal sales and revenue fluctuations. I believe that more often than not companies and people use typical seasonal changes as an excuse to not perform up to their own expectations. The web hosting industry, as much as many other online markets tend to have weaker sales numbers during the summer months as well as between Thanksgiving and New Years Day. Now I look at these typically slow times as tremendous opportunities to find out was exactly triggers consumer behavior to change during those times.

I have spend and continue to spend a significant amount of time to study consumer behavior, seasonal sales cycles, purchase considerations, and what I call "trigger events" (what exactly triggers a purchase decision). IMHO many companies, and mine are no different at times, simply don't gear up and face the challenges early on. They simply accept the "inevitable"; which is certainly not the natural entrepreneurial behavior pattern! Think about it; if you stand in the middle of a street and you know a car approaches, yet you continue to stay in your spot without moving until the car hits you, that wouldn't necessarily qualify you for the Genius Hall of Fame. You'd move because you know well in advance what this car is going to do to your health should you decide to "accept the inevitable". As with many "inevitable" things in your life a season drop in sales is only inevitable if you don't "move out of its way" early enough.

Now, you might ask: "But it has always been that way; what can we do"? Well, specific details depend, of course, on the business you are in, but generally speaking there are several basic techniques you could apply to make it through your traditionally slow times without getting “hit”.

1. Get to know your customers and prospects ahead of time. That way you can leverage your consumer knowledge the moment you see “the car coming”.

2. Tap into your customer base by up-selling them, assuming you have the Loyalty Factor on your side. If not, you have a fundamental problem that goes way beyond seasonal fluctuations.

3. Get much more aggressive with your pricing policy and specials.

4. Incentivize your sales staff (a mix of 2 and 3 work even better).

5. Adjust your thinking in regards to where your customers make their purchase decisions and try to get in front of them at their “new place” (i.e. during the day a hot dogs stand’s regular spot is in front major office buildings, but at night it moves to the exit of a sports stadium or a concert venue). Be where your customers make their purchase decision!

The list is by no means complete and should only serve as a general concept and a motivator to get you thinking about your counter attacks rarly on to avoid your typical seasonal “beating”. If you have any other interesting ideas, feel free to comment.

Posted by Ben Neumann at 04:15 PM | Permalink | Comments (0)

Ok, my best friend Pete Pergelides (Pete, he spells it Petie [I'm German, don't blame me], is the most talented singer, voice coach, actor, and entertainer I know) and I have been talking quite a bit about creative outlets lately. So, as result of this, and after reading my other best friend Chris Ueland's (Chris is also my business partner in Globat, Modern Living, and ProcLogic) blog and my buddy Brad Feld's blog (Brad acquired one of my earlier Internet companies and with that and the 2 years we worked together changed my life) for a while I finally decided to take the plunge and join the blogging world (for better or worse) and started "Views from the Trenches". So, welcome to anyone who wishes to peek in and spend time enduring my potentially completely biased and mostly very candid view points. Feel free to "chime" in as well whenever you feel it's warranted. Enjoy! ;-) - Ben Neumann.

Posted by Ben Neumann at 10:17 AM | Permalink | Comments (1)