„I have to smell, feel and perceive a situation holistically in order to achieve a good negotiation result“, is a statement by an old negotiation professional at the beginning of the millennium. 20 years later, sales staff are being trained as standard in dealing with online tenders and auctions; for traditional sales, two new procurement methodologies that they are confronted with. Unfortunately, without emotions… What is still far too little used is the meaningful combination of a classic negotiation with new, modern purchasing methodologies – successful online negotiations. The only thing that has to be renounced is the smell.

On the other hand, the current crisis shows us just how quickly the digital can suddenly take hold in practice. The home office, long considered unproductive, is currently the salvation for many companies in order to maintain the necessary productivity. The conversion of entire companies to a virtual office structure, which was thought to be impracticable yesterday, has been achieved in a very short time. Despite all the serious cuts for the entire society, it has at the same time a disruptive character for the business world in terms of communication and cooperation. Something new could emerge from this crisis. The technology has been around for a long time. But the conversion of the corresponding processes in everyday life has not yet taken place. For example, many buyers and sales people have constantly and emphatically resisted the increased use of digital media such as video conferences for negotiations, presentations or workshops, preferring to make time-consuming and costly journeys. Within a few days since the beginning of the restrictions, these same digital techniques have proven to be not only a practicable solution, but also quite efficient. In fact this should not surprise anyone – in truth many of us are. Granted: it still hangs and gnashes at the implementation. Some infrastructure is not yet in its necessary efficiency. But now, at the latest, it must dawn on even the most hard-boiled traditionalists in the analogue business world that the use of these digital technologies is not a fad of recent years.

The necessary broadband expansion and the technical possibilities increasingly allow the use of video conferences without the great effort of earlier years. In 2011 I bought a videoconference room with conversion and technology for 13.000 € as part of a project. Today a notebook with a good headset and if necessary, with a small video camera is enough to get everything together for about 1.000 € in good quality.

What does this mean in concrete terms for procurement and sales?

Not only in times of limited travel activities will video conferencing be increasingly used for communication in the future, but also for contract and price negotiations. However, a well-structured online negotiation offers the much better possibility to very easy and successful use a combination of the „best-of“ of negotiations, tenders and auctions. In perspective, it is not sufficient to bridge the physical separation of the business partners solely by means of a video conference.  The special feature of successful online negotiations is the combination of different negotiation techniques and strategies. The preparation for a successful online negotiation primarily resembles a classical negotiation. You only have to deal with the technology, the right premises and the agenda for an online negotiation.

A successful online negotiation is characterized by the following 10 success factors:

1. consciously choose the form of an online negotiation and not necessarily
2. use the negotiation strategies of classical negotiation
3. prepare an online negotiation analogous to a classic negotiation in terms of strategy, but with digital documents that you can share and use
4. create an atmosphere for a negotiation (no disturbances, the right room)
5. use the right software tool for the negotiation, familiarize yourself with it in advance
6. take advantage not only of pure audio and video transmission, but above all the added value of file transmission
7. take advantage of the alternation between emotional negotiation elements and factual exchange via documents
8. actively integrate phases of a bidding, auction or last call
9. interrupt the transmission of image or sound as part of the negotiation if necessary
10. fix the result at the end of the hearing and have it confirmed

Although it has been available for many years, it is still amazing how rudimentary the basics are known for a content-wise and technically successful online negotiation:

sound and vision

Make sure that the quality is good. Your counterpart must be able to understand and see you and other participants well. In contrast to a telephone negotiation, you can incorporate gestures and movements into your negotiation. Take care to avoid disturbing noises, such as the touch of a keyboard or the filling of a water glass. You should therefore actively use the mute button on your system. Always check with the other party beforehand that these self-evident rules are also present and observed. After the first few times, this will become a matter of course and routine.

Documents, data and presentations

The added value of a successful online negotiation is achieved by integrating presentations, tables or already prepared documents and contracts. Open the documents so that people can work in them simultaneously. Use dashboards or graphics to substantiate your arguments, show pictures of recent complaints. Prepared documents can be read together and, as experience shows, can be finalized much more focused and faster. In this way, you create a gain in time compared to the classic negotiation, with e.g. the known promise of a new offer „in the next few days“. In prepared tables, newly negotiated prices, conditions or interim results can be simulated and evaluated immediately for all to see.

Another big advantage is the option to conduct parallel online negotiations, e.g. in the sense of an auction, much more easily. This also applies to awarding topics for which a classic online auction is not suitable.

Or consciously and actively use interruptions in the negotiations. Nobody has to leave the room in a great way, just pause the transmission for 10 minutes. Even the short adjournment to e.g. the next day, if results cannot be achieved ad hoc as expected, is much easier if you do not have to expect your business partner to travel a long way back and forth without having achieved anything.

An important aspect of an online negotiation is data security. Inform the other party if you are recording the negotiation, if other people outside the camera are listening in, or if colleagues in the room are listening in. Both sides must trust the set-up, which is no different if the business partners are physically present in the room.

 

Oliver Kreienbrink

Managing Director, ADCONIA GmbH