Due to our involvement with NBA teams, SNI has been keeping a close eye on the NBA lockout. The following link is to an interesting article on the NBA’s labor negotiations.

Click here to view the article

Trust but verify, it sounds good in theory, but how can it really be implemented? At SNI, we typically advise our clients not to make adjustments to their prices when a potential buyer claims that one of their competitors is cheaper until they see hard evidence.

I asked my colleague, Jeff Cochran, for his thoughts, and with a chuckle he said he could tell me a story about how he recently implemented it.

I had a project; I needed to get my driveway paved. Being a negotiator, I knew that I needed to do good preparation. The first step in preparing was to collect estimates so that I would have alternatives. Therefore, I contacted three contractors, provided them with the details of the project, and collected estimates. Of course, all three estimates were different. The most and least expensive estimates were significantly different. The first contractor I called was an acquaintance. He gave me an estimate of $8,500 to do the job. The second estimate came from a contractor who I found from an ad in my local paper. His estimate for the project was $7,500. Lastly, there was a sign on the driveway up the road. When I called the number on the sign to inquire about the cost of my project, I got an estimate of only $6,000. 

Naturally, I was inclined to choose the least expensive contractor. However, his offer seemed too good to be true. I did some research, and sure enough, I found out that cheaper offers like the one I received for $6,000 raise a major concern that the contractor would skimp on materials. Not using the correct amount of asphalt on the driveway could lead to major problems.

I went back to all three contractors and asked for the specifications on the work they would be doing. All three indicated that they would use four and a half inches of blacktop. Since the first contractor at $8,500 was an acquaintance, I went to him to give him right of last refusal. I informed him that one of his competitors was willing to do the job for $6,000, $2,500 least than his estimate.  I was very surprised with his response because he told me that there was no way for him to drop his price without losing money on the job. In turn, I asked him how come his competitor could do the job for $6,000? His response was that the competitor would most likely skimp on materials and do a bad job.

It was the end of the summer and I wanted to get this project done while the weather was still nice. How could I choose the least expensive contractor but know for certain that he was going to do quality work? I had him put in writing a detailed description of the work he was going to be doing and the specs that needed to be met. I then confirmed with him that what he had written is what he planned to deliver. Still, I remained a bit skeptical. Just his word alone didn’t seem like enough. Thinking back on my negotiations skills, I thought trust but verify. I went back to the contractor who would have cost me $8,500 and asked him if for $200 he could have one of his guys supervise the work of the least expensive contractor, guaranteeing that he delivered what he said he was going to deliver.

It was a good thing I did! In the end, the contractor I opted to go with for $6,000 did not have enough asphalt to finish the job, so he suggested that he use three and a half inches of asphalt instead of the correct amount, four and a half inches, to save time and money. It was one of the hottest days of the summer. He told the inspector that he knew that they were both exhausted from a long day’s work and ready to go home. He even added that I probably would never notice the difference of an inch. He was right. How would I have ever found out until I started seeing cracks and needed to dish out an additional $2,000-3,000, if not more, to pay to repair his shortcomings?

Luckily, the inspector who I hired insisted that he do the job correctly, go back to the asphalt plant, and get another load. The $200 I paid for the inspector to be present was well worth it and it potentially saved me thousands. When I first thought about it, I wondered why he cared enough to prolong the project and make the least expensive contractor use the correct amount of asphalt. In the final analysis, it made perfect sense why the inspector would be adamant that the job gets done correctly. He was not going to let a competitor steal potential business by offering to do the “same job” for cheaper when in reality he was shorting clients.

Getting a Raise Using the Prep Planner:

In today’s economic environment, it is harder than ever to get a raise at work.  On the other hand, people who have not had raises in several years may be in a great position to get that raise.  When we talk about effective preparation, it is important to have precedents to establish the justification of the salary you will request.  There are several precedents you can use:

Find out what other similar jobs pay (you can find them at payscale.com and glassdoor.com.)

Use prior percentages of increases that you have received in the past to justify that percentage again.

Uncover possible examples of ‘bonus for performance’ opportunities that have been given by your company.

Look for ancillary economic benefits provided to others in the organization such as company cars, additional vacation days, or opportunities to work from home.

While precedents are important to establish, the other elements of the preparation planner, such as you alternatives (and theirs), interests (what can you do to help the business make/save money), and walk away (your willingness to leave if you do not get the raise you want). 

While asking for a raise in these challenging times is difficult, it is often said: “much is lost for the want of asking…”

In a previous post we discussed a negotiation tactic that we refer to as “Higher Authority”. 

We had a chance to sit down with our CLO, John Buelow, to discuss new developments in SNI’s training delivery methods. Additionally, John gave us an inside look at the customization process for SNI programs.

What are you currently working on?

There are three main things are going on right now. First, I have been repurposing all of our negotiations content to e-Learning and virtual platforms. We are trying to meet the needs of organizations with smaller budgets by offering alternatives to the traditional, more expensive classroom-based training. Second, I have been developing content along with Mark Jankowski to develop our influencing course. We are doing research and field observation in the areas of pharmaceuticals and medical devices to give them the psychology behind the negotiation such as: Why do the things that we teach really work in the field? And thirdly, I am in charge of customizing and producing material and delivering programs for a wide variety of our clients. So, our traditional customized negotiations programs are all part of my responsibility to deliver.

How do you go about customizing a program?

Typically, we engage with a client very early in the sales process to let them know that we do not sell a standard program. We are immersed in their business so that when we teach negotiations, we teach it in a language and a format that uses examples that are very familiar to the audience. This allows us to accelerate the learning curve. Once we explain to our client that this is our process, typically I will interview critical stakeholders on the executive team, and then I interview job performers. In many cases, we become embedded in the organization. We observe them and take all of that information that we see and we make recommendations on how the content needs to be customized in order to have maximum impact. By the time we complete an engagement we often know our clients’ businesses so well that we find ourselves providing consulting/advice way beyond the scope of our programs – an indication of a true partnership.

Are you seeing any changing trends with the companies you are working with?

Certainly in the pharmaceutical business the ever increasing rules and regulations are producing new challenges in our field. Also, everyone is much more budget conscious than they were 5 years ago due in large part to the global economy. In addition, I have noticed audiences are much more engaged. Whether it is sales people or negotiators, people are looking for an edge to help them maintain their margins and to close more deals.

 How do you feel about e-learning or virtual platforms, especially in light of the success you’ve had delivering the programs in the classroom?

We believe that the skills we teach in our negotiation programs can be greatly enhanced with the study of strategic questioning tactics, the psychology of influence, and by offering a wide range of reinforcement options to maximize the transfer of learning to the job. That’s one of the main reasons why we are embarking to the e-learning and virtual learning paths. We are trying to teach the foundational skills in the classroom and then offer a variety of delivering channels for our reinforcement and advance skills.