#h4 1. All or nothing
Beginning a negotiation by presenting a long list of inflexible demands is one way to derail the process from the get-go. Make no mistake - you should never be timid when listing your contract requirements for fear of offending the other side. However, be aware that negotiating involves give and take; being unwilling to do a bit of each will frustrate the process and possibly damage the outcome.
Fortunately, most players involved in merchant acquiring recognize its complexity and quickly develop a knack for the horse trading mentality that makes for effective negotiating.
#h4 2. Lack of preparation
Before a negotiation begins, I find it helpful to develop a list of objectives, both big and small. Keep the list handy during your negotiation to keep track of which objectives are being achieved and which are not. If you do not compile a list of objectives, you run the risk of either forgetting something that's important or spending too much time on something that's not.
In preparing your list, consider what concessions you think the other side is and isn't willing to make. This often involves reflecting on the people with whom you'll be negotiating, learning about their previous negotiations, the way they have treated other negotiators and how they generally conduct business.
For example, if you are an ISO that wants portability for your merchants, don't expect to get it if the ISO with whom you are negotiating does not itself have that right.
#h4 3. Fear of sharing information
Transparency in negotiations is in fashion, and there is something to that. Parties negotiating merchant acquiring agreements sometimes falsely assume they should say as little as possible about their business plans to the opposite party. Sometimes they do this out of fear that the other party will misappropriate the information - which does happen in some cases.
However, keep in mind that the agreement you are negotiating begins when the negotiation ends and the deal is finalized. Ideally, the arrangement you are putting together will lead you to become a long-term business partner with the opposite party.
Consider that surprises are harmful in any business relationship and that sharing some of your plans, at least in a general way, can be helpful in cultivating a relationship with your new partner.
Some entrepreneurs are surprised at how helpful it can be to have occasional conversations with competitors. It is not an attempt to reduce competition or violate anti-trust laws, but instead it is a way to learn how to improve your own business and strengthen your position in the marketplace.
#h4 4. Neglecting the "how"
A little humor and levity can go a long way in business negotiations. Sometimes parties are so far apart in their positions on a given issue that it's funny. In those situations, someone has to crack a joke and break the ice.
Endeavor to step back from tussling over a specific item, and remember that most everyone negotiating shares the same general goal: to finalize an agreement that benefits all parties. This is especially true in a merchant acquiring relationship: An "abused" agent won't hesitate to take his or her business elsewhere.
Some people prefer to take a hard or serious approach to negotiating. While I respect that approach, I am nonetheless always concerned about the long-term impact of hard negotiations on interpersonal relationships between the parties involved, particularly if they agree to a contract with a lifetime of many years.
Along those same lines, another important style point is politeness. Most folks in sales already know this, but it's something to stay conscious of in the heat of negotiating - when the other side seems completely unreasonable, and you're liable to lose your usual tact. So stay calm and civil at the table.
#h4 5. One on one
I find it's best to have at least three people involved in a negotiation. Having a third voice there to moderate helps keep each party's proposal within reason and keeps the other two individuals focused on the negotiation rather than embarking on unproductive tangents.
Two people negotiating alone often get caught in a funk, stuck on a particular subject or way of thinking that can be only dislodged by the perspective of a third person.
#h4 6. Under pressure
Fortunately, there are hundreds of ISOs and processors out there. Don't let anyone tell you that their deal is the only one in town.
Sometimes an ISO or a processor will exert undue and "uncool" pressure on a merchant level salesperson (MLS) to remain in an unsatisfactory relationship or accept difficult terms because the MLS's existing book of business is under control of that ISO or processor.
While certain unpleasant scenarios are unavoidable, never sign a deal under this kind of pressure without first shopping around for alternatives. Merchant acquiring is rife with ways to share revenue, make a deal or draft a divorce. Don't be pressured into a deal that is unfair because your portfolio is threatened by a heavy-handed negotiator.
#h4 7. Not enough shopping
I recommend that at least once every few years, ISOs and MLSs should lift up their heads to see what kind of deals are out there. However, I do not advocate that agents hop around from one acquirer to another.
Instead, I recommend MLSs know what the market is offering and consider where a deal fits in with market trends. This kind of continuing education may inspire you to sign a second or third deal that could help you earn residuals you'd otherwise leave on the table.
#h4 8. Dishonesty
I'm sorry if this sounds like a sermon, but I very rarely see dishonesty benefiting anyone in the long run. In this age of transparency as it relates to the payments industry, parties benefit from their reputations and the integrity they have developed over many years. A short-term gain from a dishonest act is unlikely to be worth the risk to your reputation in the long term.
Dishonesty isn't always an overt or blatant action. For example, it can involve making modifications to a document without either informing the other side of the changes or sending that party a notated copy of that modified document.
Some processors do this, and I find it to be a silly waste of time and an insult to the ISOs negotiating with them.
When you sit down for a negotiation, you might think of the process as the formation of a new friendship. Negotiating a new business friendship puts a person in position to reap the benefits of real-life friendship: honesty, loyalty and support when times are tough.
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