Is there a secret to getting what you want in a contract and fee negotiation? Is there a magical strategy to winning? Yes, in fact there are five!
Start High – This is an old trick, whether you’re a PM negotiating a fee or a developer negotiating the height of a proposed skyscraper. Begin with something higher than you’ll be happy with, so when you’re pushed to reduce your numbers, you’ll still be comfortable with something you can live with.
Go First – Assuming you’ve got as much information about the project and terms as the client, a 2004 study reported in the Harvard Business Review (HBR) suggests that you’ll be more likely to reach a number you can live with it if you begin the negotiations. The HBR report explains that when you’re the first to speak up, you come across as a confident professional, which naturally sways negotiations in your favor.
Provide Data – Solid information is difficult to argue with. If you’re fairly transparent with your calculations, and can explain clearly – with data! – how you came up with your numbers, there’s little the client can say to contradict you. Some experts in persuasion suggest that quantity is more important than quality – it’ll really look like you’ve done your homework if you litter the negotiation with hard facts.
Hurry – Researchers of consumer behavior have proven that when people feel like time is running out on a purchasing decisions, they’re more likely to act in the seller’s favor. If appropriate, use the project schedule as the pressure point to push negotiation faster.
Eat – Experiments performed last year and reported in the Harvard Business Reviewshowed that negotiating over food created substantially higher contract amounts – 11 to 12 percent! – than when no eating was involved. Furthermore, the same study suggested that negotiating in restaurants was more profitable than over food in a conference room.
