In Will’s Head: Negotiations—Or, Being Smart About a Necessary Evil

Is it too early? This, for Will Fuentes, is the most important question to ask before entering into a negotiation. He’s seen too many cases in which people begin the negotiation process without first identifying all of the parties that need to be involved in order to agree to the conditions of a deal. Heck, they might even be too engrossed in price tags to remember the existence of conditions altogether.

“Negotiation isn’t necessarily just about money,” says Will. “Sometimes it’s about other terms of the deal. Sometimes it’s about a legal right. Sometimes it’s about choice of law. There’s a lot of things that you’re negotiating.” If you’re laser-focused on money to the exclusion of other terms, you might actually be negotiating against your best interests.

“I’ve been involved in enterprise deals where we knocked out every single thing except for one last item…” That item can kill a deal.

Will’s antidote? Helping his clients understand and define—down to the last detail—which gets would meet their goals in any given situation. What if the buyer can offer more than asking price, but can’t pay upfront? How long is the seller able and willing to wait? Does that duration change if some money is paid upfront? What is the minimum amount of money the seller needs to see right now? What is the minimum they need to see in 90 days? Will works with his clients to distill what the real non-negotiables are. “If they don’t accept this term, do we walk away? So then that is when no more negotiation is needed.”

IN TERMS OF TERMS…

When I asked Will about mistakes he’s made that have taught him lessons, he didn’t flinch: “Number one is negotiating price before I negotiated legal terms.”

He also looked back on one of his first enterprise deals. He had hammered out price. It was great. All that was left to do was dot the I’s and cross the T’s. As it so happened, the I’s and T’s were majorly problematic. The choice of law on the contract ended up being less advantageous to Will than he had assumed. Choice of law may not be as sexy as price, but it can be just as destructive to a good deal.

In another instance, Will negotiated a large, favorable deal with a buyer. That profit, however, shrunk as soon as he bought the additional insurance that turned out to be required by the buyer’s MSA (master service agreement).

Today, he makes sure to be clear and up front about his needs from the very beginning. All of them. “When you send over pricing that you’ve negotiated, articulate it at proposal: these are contingent upon these five legal terms or this is contingent upon this pricing schedule.” This is not to say he can never be flexible. The key is knowing where the roadblocks lie and then “solving for” them. If cash outlay is an issue for a client, Will is willing to talk. If the terms don’t work, Will is willing to show plasticity, as long as he’s comfortable with the contract.

This process can also be key in understanding which negotiating partners are negotiating in good faith and which might be bad actors. “I start to ask questions, so if they’re negotiating, I want to understand their justification of how they got a price. If they’re negotiating a legal term, I want to understand the justification as to why that particular legal term.” If a negotiating partner can justify their needs, Will is open to hearing them. If it’s negotiating for the sake of negotiating, he’s less interested.

This goes both ways. Will does not believe in gluttonous bargaining. “Negotiations to me aren’t about maximizing the total dollars that someone can get. It’s about getting to the place where someone feels that they’ve gotten a fair deal.” Some salespeople become haunted, to their own detriment, by leaving a single dollar on the table. In fact, Will says, “One of the biggest mistakes is having an internal conversation around what is acceptable, getting offered what is acceptable, and then trying to renegotiate with the client.”

Will opts for efficiency. Get in, get what you came for, get out. “What’s the number that makes you happy?” he’ll ask clients. If they obtain that and walk away dissatisfied, “well, that’s not the number that makes you happy. The number that makes you happy, you should be willing to say yes to.”

And one last thing: “bargaining for the sake of bargaining is just dumb.”

STAY COOL

To Will, negotiation is a kind of necessary evil. But that doesn’t mean it can’t be fun. Will loves the game theory of it all. “I’ve played out all the possible scenarios where I truly believe it’s a win for me. When they offer one of those scenarios, I’m ready to say yes.”

Here’s one thing Will doesn’t bring to the table: a temper. Some actors, he’s noticed, can get themselves rankled during this final process of a deal. Will likes to offer composure. “I think the number one thing to remember is, at the end of the day, you’re just dealing with other human beings. Remain logical and understand that sometimes when people are in an emotional state your job isn’t to bombard them with logic but to allow them to work that emotion into logic, helps great in negotiations.” While negotiations may be a necessary evil, reckless negotiations are an unnecessary evil.

If you’re interested in executive strategy sessions with Will, reach out to us at mastery@maestrogroup.co.