Introduction To Negotiation:
Today, I am going to talk about something that makes Jay and I very excited. Jay is the all-time Master and something that makes our clients, and most people, incredibly nervous, may give you butterflies in your stomach and that is the topic of negotiating. Yes, negotiation. So for the sake of today’s episode, over the years, Jay has put together a list of we’ll say the top six tips you need to know when negotiating, either in business or in life. We use those tips in Shorr Solutions over and over and over again so I’m going to be talking about those and of course, if you have additional questions at the end of this podcast I always welcome feedback so we are here to help if you need this. So one of the things I find, again and again, is that folks really don’t know what all of the different things that can be negotiated in their business. So, everything from equipment and supplies, as far as buying or leasing. Is there a financing agreement i.e. if you’re not necessarily buying something completely in cash, or is there a discount to buy in cash?
We know that so many pieces of capital equipment cost what some people pay for a mortgage so we might see a piece of equipment that is $150,000 for instance, so we look at financing options. There are marketing and advertising expenses that you pay for as a small business and so we look at what sort of negotiation is able to take place there. Again, credit card processing fees we’ve talked about this in previous podcast episodes. Credit card processing fees, most people don’t know this is something they can negotiate. We do this all the time for the practices that we work with. There are so many different things that can be negotiated in your business and you always want to make sure you’re keeping an eye on them.
Getting The Best Bang For Your Buck:
Now, once you determine what it is you’re going to be negotiating, purchasing, etc. How do you know you’re getting the best price? You want to make sure you’re getting several quotes and you want to make sure you’re not just settling on the first quote that you get. Are there other vendors through which you can purchase this?. A lot of times when we look at supplies you may be using, again we’re talking about medical practices here so gauze needles, syringes, etc. some of those small things, all the way through pieces of equipment that you may consider a little bit larger for your practice. So some of them are physically larger i.e. exam tables, etc. You want to look at getting a couple of different options, whether it’s a laser unless you know you want a particular laser for a particular reason, but of course, you have done your research to pick that particular piece of equipment. We’re going to talk about how you can negotiate once you’ve picked out exactly what it is that you want.
Six Tips Of Negotiation:
- You want to make sure you understand the other person’s needs and objectives. What is it that the other person, in this case, that is most likely your sales rep, right, is looking for? Quite honestly, they’re looking to make a sale, sometimes they’re looking to meet a quarterly goal, sometimes they’re looking to meet a monthly goal and end of year goal, and you want to look at what is it that they’re looking for. What is it that you’re looking for, is it to lower your rates, is it to include other items in the contract which we’ll talk about in a little bit. What is it that would make you happy? Is it getting more included in a particular contract, so you want to pay that same amount of money, the money may not be the issue but the issue is how much work is being done with a marketing vendor for instance. What is the happy medium? You want to make sure you know what your must-have is in that situation. Now, one of the things that are incredibly important here is to not show that immediate need. If you go into a negotiation and you say, I need to have this by tomorrow, that takes away all your negotiating power. You need to go into it and say, I am ready to make my purchase sooner than later, I don’t need to have this by tomorrow. If it takes another several weeks to make sure that the contract is just how we need it to be and to make sure that the contract is something that we’re both happy with, I’m willing to put in the work, so don’t show that immediate need.
- Don’t be afraid to ask questions. I see this all the time where people don’t understand something that’s in the verbiage so our clients might say, I see this contract but I just don’t understand it. I don’t understand what the terms of the agreement are, I don’t understand if I have to exclusively go with this vendor or if I’m able to go with another vendor as well. Sometimes we’ve seen this in the past with skincare lines. Does a skincare line allow you to carry more than one at the same time? Because you want to make sure that you’re not getting into an exclusivity without knowing it. You want to know what sort of warranty you’re getting and is that spelled out in the contract or is that not spelled out in the contract. A lot of times what we see when we are talking about website companies, for instance, is we want to know what exactly is included. For example, when you’re paying for the design, how many pages are included in that website. What happens if you go over that amount of pages? What happens if you realize that you are opening a new location and you need to add three more services because originally you hadn’t planned on doing laser hair removal or you want to separate out each of the injectables on two separate pages. Maybe initially that wasn’t what you had planned. Side note I always recommend having a separate page for your injectables. You want to make sure any questions you have, what do the timelines of the contract look like, what are some things that you can and can’t do. In other words, if you’re buying a piece of capital equipment does moving that piece of capital equipment between two different locations void a warranty. Right. All of these questions you want to make sure that you are asking them all upfront with your vendors, ask them to spell out details about things like samples if it’s skincare, what are the financing terms, what sort of rebates are available, what happens if you need to return a product? What happens if that product goes bad? If it’s a piece of capital equipment if it’s a laser or an RF device, for example, then what happens if the piece of equipment is down, are they going to send you a loaner? You want to make sure you’re covering all of those things and look for the hidden fees in that contract. This episode is not by any means to make it so that you don’t purchase the equipment. We love purchases when they make sense for your practice, but we want to make sure that you know exactly what you’re doing going into it. You want to make sure that you have all of your questions asked. One thing that I find happens, again and again, is that our clients feel like they’re getting the runaround so you never want to feel like you’re getting the runaround from a potential landlord from capital equipment.
- Prepare and compare. Do your research, and have all of that information and if you are between for example two different pieces of equipment or two different brands of neurotoxins then look at what is Option A, what is Option B, you may even have an option C, and do your research. Really prepare and compare, some people really love that old school side by side checklist, so make sure you know what are your options, look over those facts side by side. Again, you’re talking about the vendor when you’re talking about capital equipment. Are there applications for that piece of equipment face versus body for example, what is your option if you are looking at leasing versus purchasing an actual building? If you’re going out on your own you’re looking to open up a second location. Then are you planning on leasing the space or purchasing the space, we have these conversations with practices all the time where they might think that leasing is the best option but once we look at how long they’re planning on being in that particular space, or what the options are financially, and all of the things that go along with that purchasing might be a better deal for them? We want to look at ongoing training so when you’re talking about technology, then it is so often that ongoing training tends to not be included unless you ask for it. Now, let’s be honest that COVID has changed the world of ongoing training, quite possibly forever but even before that companies and especially EMR and technology companies are moving more towards cloud-based and virtual trainings, so you want to find that out. Does your technology company provide you with prerecorded modules for frequently asked questions, or do they provide cloud support, do they provide phone support, do they provide phone training? You have a marketing person that starts and you want the technology company to train them. Look at what is included and what costs extra. Also, look at marketing support. Are they providing either a certain amount of dollar spend for you or reimbursement for that PPC campaign for instance, are they launching a national campaign that you’re able to launch and leverage? Do they provide great photos that you’re able to use for stock images before you’re able to actually have your own images? We always know all stock images are helpful, quite honestly your own images are better. You want to make sure that you are really asking all of these questions, and insisting on the answers. One of the tips that I like to give and I’m going, to be honest, Jay and I use this tip all the time, we call it facts versus opinion. What I mean by facts versus opinion that if you consider there are two people on either side right of this negotiation. If it’s your opinion versus their opinion you just have two different opinions, right. If it’s your opinion versus their fact then they have the upper hand. If it’s your fact versus their facts well you could but heads depending on who has the stronger fact. If it’s your fact versus their opinion facts are going to win. What you want to make sure is that you are not going into a negotiation based solely on opinion. You want to make sure you are bringing all of your facts to the table. Do you have statistics, do you have research that you’ve done, have you done a demographic study in your particular area. You know exactly what it is that you need, you might know what others in your industry have paid for that piece of equipment for the space if you’re leasing you’re negotiating the lease. You want to know what are the facts versus opinion, bring the facts to the table every time and I will tell you, Jay and I, whenever we are on the initial opposite sides of an issue and we’re looking to launch a campaign we look at the facts, what are the facts, what do the statistics tell us so?
- You’ve heard I’ll check with my boss. We find this, again and again, think about when you went to go lease or purchase a car and you start with a car salesman or a car saleswoman and that salesperson starts and then they have to go check with their boss and their boss goes and checks with their boss. Know the level of authority of the person that you’re speaking with because what you want to make sure is that they are bringing the best deal to the table for you. What you don’t want is to later find out if you would have just spoken with a different person than you could have gotten a better deal from. Do they have the authority to bring you a discount, for instance, to bring you more value? Are you able to get an extended warranty? Think about even related to certain dealerships, when you go purchase a car they will give you free oil changes for life, my car dealership said this right now. I’m going on seven years with my car, and I have now gotten free oil changes for life something else that honestly worked very well in their favor is that since I’m in their office and in their dealership, I now am presenting the problems to them. As far as, Oh this may not work quite right on my car this is time for a tune-up and its additional revenue. If you’re purchasing skincare, you want to make sure that there are no minimums and they’re able to throw that in. Are they able to throw in additional items, what does that look like? Once you have come to this point, you want to make sure you insist on putting everything in writing.
- Put everything in writing. You want to avoid the, quote/unquote, he said she said, so verbal contracts they aren’t legally binding. If it’s not spelled out in an email, if it’s not spelled out in writing then it didn’t happen because there’s no way to prove it. You want to make sure all of these details that you spent this time and effort negotiating, they’re all put into writing. You want to have that piece of paper to go back to in case anything goes wrong in the future.
- Don’t be afraid to walk away if you are not able to come to an agreement that you are happy with on paper and you are happy within your gut. One of two things will happen, you’ll either find what you’re looking for somewhere else in another agreement, or that salesperson will come back to you and say, as it turns out I could do that after all. Okay, so you want to make sure you are not committed to a deal and committed to a contract that you’re not able to get out of later. You want to make sure you go with your gut.