Negotiation techniques

ER&LAustin, TXMarch 17 2014

What’s SCELC?The Statewide California Electronic Library Consortium

We have 111 private academic and nonprofit research member libraries throughout the state, plus one in Nevada and six here in Texas

We also have partnerships with hospital libraries in the Southwest and Hawaii; TexShare; Cal State Universities, and ATLA, for a total of >145 libraries licensing as SCELC Affiliates

What’s SCELC?Our primary activity has been negotiating offers for electronic resources and related services for our member libraries

We are an opt-in consortium, which makes negotiation more tricky – we license over 3000 different products so we negotiate all the time…

Plus we serve a very diverse set of libraries made up of many sub-groups, which is why we sometimes have to negotiate with our libraries

The Consortial Approach

SCELC has a small staff yet offers a large number of products

Success has come from dealing with our vendors honestly, fairly, and with an openness to understanding their position

Having events such as our SCELC Vendor Day helps build strong relationships with our vendors

SCELC Librarians vs. Vendors Bowling Tournament

Inter-consortial collaborations and ICOLC meetings help

The Consortial Approach (2)In the SCELC strategic plan

some of our core values arePartnering – working with vendors as partners in achieving a fair value and a fair returnInclusiveness – Soliciting the active involvement of our members by sharing expertise and best practicesCollaboration – Involving members and other organizations in our dialogue and work

Negotiation1. is a basic means for getting what you want from

others2. occurs when there are differences between the

needs of the buyer and seller3. is a “back and forth”, “give and take” process

which often involves a “compromise” - a settlement in which each side gives something up in order to gain something else

• Pricing negotiation seeks to reach equilibrium between what the vendor charges and what our libraries are willing to pay

• License negotiation seeks to reach equilibrium between the ideal terms for the library and the ideal terms for the vendor

Inventory Your Negotiation Experience

Frequency of vendor negotiationAt least once a yearAt least once a quarterAt least once a month

Negotiation typeMostly licensingMostly pricingAbout equal

Self assessment of negotiation skillAbove averageAverageBelow average

Two common/contrasting styles

War Room: ‘Win-Lose’More common at the consortium level

Especially among all or nothing consortia

May lead to better prices in some cases

More likely will burn bridges or cause bigger problems in the next round

Not likely to lead to collaboration

Scott Boras, New Yorker 29-Oct-07

Relationship-Based: ‘Win-Win’More common at the library level

Built on relationships and compromise

Power of Nice : How to Negotiate So Everyone Wins – Especially You!, by Ronald Shapiro

Getting to Yes, by Roger Fisher and William Ury, Harvard Negotiation Project

1. Do your homework / Be prepared

2. (Shut up and) Listen

3. Aim high… Don’t be afraid to ask…

4. Don’t be in a hurry… Be patient a. Don’t make the first move b. Don’t accept the first offer c. Don’t negotiate against yourself! d. Focus on the other side’s point of viewe. Seek transparency

5. Meet in the middle a. Don’t make unilateral concessions b. Defining the middle through discussion is the best part!c. Make sure both parties needs are satisfied

6. Be willing to walk away – have a plan B

7. Don’t take issues or other person’s behavior personally

COMMON

SENSE APPROACHES

and their UNCONVENTIONAL

sides

Prepare

Determine your objectives

Set a timetable

Assemble a team if you are working with others

Develop a strategyWho takes the lead on the negotiation?What roles might other team members play?

The Unsustainable Models Debate

Is it enough to start a negotiation by complaining to a vendor that the current models of subscription are not sustainable in the current library budget environment?

A complaint is also a negotiation so long as you have an alternative in mind

Think creatively of what models might workTalk to the right people in the hierarchyBe bold: Don’t be afraid to propose new ideas

http://www.theauroracrossing.com/wp-content/uploads/2013/04/listen.jpg

Ask questions…

Used without permission…

Aim h

igh…Don’t be afraid to ask…

http://goo.gl/axfyccommons.wikimedia.org

Be Patient

commons.wikimedia.org http://goo.gl/LVdn0

Meet in the Middle

http://t3.gstatic.com/images?q=tbn:ANd9GcQHUAjV1VXB-dZiSThyEWtmkzUIR_sJZG9IZKI1s0P8APHgoAnk_Mr0MA

commons.wikimedia.org http://goo.gl/FZhVa

Be Willing to Walk Away

Don’t Take it Personally

Additional notes

Humor is a crucial ingredient

Use data!

Find a mentor

Look for opportunities to negotiate, they’re everywhere!

Practice, Practice, Practice

Prime negotiation opportunities

1. Making the most of a budget crisis

2. Ongoing Subscription vs. One time Purchase

3. Access fees

4. Ebook archives

5. Intractable license negotiations

Primary source collections: subscription

vs purchasePublisher A Publisher B

Tota

l sp

ent

Use your knowledge of other deals to negotiate a better deal

Access fees

*Access Fees: think about the long term costs

access fee increase capswhat are you paying for?

Demand transparencyWhat is the repurchase point

At what point will access fees add up to another purchase?Suggest alternative pricing models

E-Book archives

Know publisher Profit & Loss calculations

2 years after a book is published, the expected sales drop to zeroBackfiles should be deeply discounted!

Intractable negotiations: Think

outside the listConverting Elsevier’s Unique title list to a Shared title list

Price JS. 2006. Making the most of a "big deal” Charleston conference proceedings, 2005

Some more general practical approaches

Don’t pay until you have what you wantSoftware under development

Be willing to beta test only at a reduced or “free” rateAnnual title access list updatesLicense negotiations completed

 Use peer pressure - what do other companies do?

 Hold off for a better deal

Wrong Model: Unreasonable minimums to obtain discountsUnsettled pricing: ebooks and simultaneous use restrictions

Sometimes NO is the only acceptable answer3x price increase

No ILL or other sharing allowed

No remote access (hardly ever occurs anymore)

Unmanagable Restricted list of authorized users

…and other issues that depend on the context

Insert your own examples here

Negotiation PrinciplesGet to know your negotiating partner; establish rapport with them

Listen carefully to what they have to say and take notes

Focus on shared interests, and try to avoid hard position bargaining that obscures real goals

Express your interests clearly and specifically while exploring & acknowledging their interests as well

Questions? Contact information:

Rick BurkeExecutive Director, SCELC

rburke@scelc.org

Donna LaFolletteDirector of Financial Operations, SCELC

dlafollette@scelc.org

Jason PriceProgram Manager, SCELC

jason@scelc.org