How Do You Negotiate With An Elephant?

 

In business, one of the best ways to grow a small company into a large company is to build strategic partnerships with large companies. A lot of vendors have seen their meager fortunes skyrocket after they worked themselves into a big deal with a major enterprise level corporation. This is kind of the business equivalent of being "discovered" by a major Hollywood producer and going on to become a big star. It is the kind of break that entrepreneurs dream of.

I call these major enterprise companies "elephants," because they are huge, and they make great targets. Also, compared to them, your organization might look like a mouse– puny and insignificant. However, looks can definitely be deceiving. It is often possible for a mouse to negotiate a great deal with an elephant; you just need the right elephant. Here are a few tips for negotiating with an elephant without getting stepped on.

Look for a wounded elephant

Not all elephants are equally good prospects for a mouse to do business with. Remember the mouse in the fable who nibbled through the rope snare that was keeping an elephant imprisoned? The elephant had a need that the mouse could help with. Even elephant-sized companies have particular needs that may not be adequately addressed. Before you even start a negotiation with a more powerful party, discover if they have a need (interest) that you can help satisfy for them.

Four Critical Steps To Take Before Negotiating With An Elephant:

1. List entities that could be suitable negotiation partners.

2. From that list, choose those that appear to have a pressing interest we could help address. (This will take some focused research.)

3. From that list, choose those that seem to be open to negotiating with newer or weaker groups who don’t have a previous history of being in the big leagues. (More focused research.)

4. If you still have more than one potential party on the list, decide in what order you will pursue them, or if you will pursue them simultaneously.

Invoke the possibility of competition

Even a mouse will appear – and become – more powerful when they can take generate some action with the competition. If you have something the elephant is even vaguely interested in, and they discover you are also discussing deals with other elephants, you suddenly have their attention. Even creating the illusion of competition (for instance, by trading phone calls and information packets with multiple players) gives you something to talk about with your main elephant that might encourage them to take you more seriously. Once the elephant realizes you have caught the eye of other major players, your credibility and leverage goes way up.

Make sure you are the smartest person in the room

When it comes to negotiation, there is simply no substitute for out-preparing the other side. You need to know more about their interests than they do, understand their markets better than they do, understand the way their organization functions better than they do and – especially – be the absolute authority on all of the issues, options and solutions that could be on the table for discussion.

The Achilles heel of many large, powerful organizations is that they stay so focused on keeping their programs running that they don’t know what they don’t know! They know how to keep the wheels spinning, but they don’t have a clear idea of how to implement effective new solutions to solve old problems. If you can demonstrate that you know something that they don’t, and that you know it very well, you suddenly have something very valuable to offer them. Another word for that is POWER. Information can be just that – information. Commonly understood information is knowledge. Knowledge that only you have – and someone else really wants – becomes truly powerful.

And that is how you negotiate with an Elephant. Happy hunting!

 

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Quick Tip of the Month – Ration Your Concessions

One of the most common mistakes people make in a negotiation is giving in too soon, or giving away too much, when the other side asks for concessions. When you give in too quickly, or give up something big too early, the other side immediately assumes there is plenty more where that came from. They will keep pumping you for more and try to wear you down. A better strategy would be to determine ahead of time just how far you are willing to go before you hit your bottom line, and then parcel out your concessions gradually and in equal parts. And don’t forget – never give a concession without getting something of equal value in return!