While face-to-face negotiations are always better for closing business deals, email negotiations are on the rise. Researchers have found (and common sense tells us) that email negotiations lead to less satisfying agreements and an even greater rate of failure to reach agreement. The only thing I can think of that would be even worse then negotiation through e-mail would be negotiating through texting!
The preferred negotiations approach? Face to face first, phone second (including Skype) and email last. If the only alternative is to negotiate via email, I have the following tips:
1. Talk first. No matter what the other side says you have to talk to them. You have to make some connection with this person other than through electronic dispatches hurled over the cyber wall. And picking up the phone during negotiations can be awfully handy to clarify, get context and attitudes not appearing on the printed page, and just connect. Civility goes a long way in this frenzied digital world.
2. Plan, have an agenda. Emails lead to stream of consciousness negotiation on key deal terms. Priorities, planning and problem solving don’t lend themselves to short email salvos.
3. Ask who has authority. You will go through email torture if you learn that all your negotiation efforts have to be approved by the person behind the curtain. The person needs to be cc’d and involved.
4. It’s not just the email. It’s not their final negotiating position. How many times have you pored over an email wondering why they were so rigid, inflexible? You are only seeing those words on the page—you are not hearing their conversations, their tone, their perceptions, and their feelings. Emails can often come across as too aggressive. Don’t fire off an email based on your first reaction—wait, reread their email and reread your response. Haste does make waste.
5. Ask questions. Ask such basic questions such as “who, what, when, where, why and how. Ask up front, not when the deal is almost done. See #4, it’s not black and white.
6. Be clear. The digital revolution did not do away with the need to write well and clearly—if anything it demands more clarity when no one is talking to each other.
I always read, and re-read important e-mails and put myself in the position of the person reading it. It’s so easy to convey the wrong message when you are just using the written word.
7. Timing. If you want a speedy reply, let them know. Likewise, if you have unduly procrastinated, at least acknowledge your response was slow. And don’t read too much into delay—not everyone responds to emails within seconds, minutes or even 24 hours. Also, make it clear who needs to do what when and set realistic deadlines. Otherwise, you may be waiting forever for a deal that never comes to pass.
8. Humanize. Connect with the other side if only to commiserate on the local team or the weather. LinkedIn can help you connect by knowing their background. You needn’t pander or tread into verboten territory (religion, politics).
9. Price is not the only number. If price is a mathematical equation, i.e. offer is X, counteroffer is Y and you split the difference, you may have really botched the deal. Why? Shipping, warranties, terms, service levels, returns, renewals, etc. can render a deal wholly unprofitable.
10. Written Agreement. Conflicting terms in emails will leave both sides in limbo about whose terms govern. An executed written agreement is always better than terms exchanged via email.
Carol Frank of Boulder, CO, is the founder of four companies in the pet industry and a Managing Director with BirdsEye Advisory Group, where she advises pet companies in M&A transactions and Exit Planning. She is a former CPA, has an MBA, is a Certified Mergers and Acquisitions Advisory (CM&AA) and holds Series 79 and 63 licenses. She highly values and incentivizes referrals and can be reached at cfrank@birdseyeadvisory.com.