Negotiating after an agreement: calling all PSS pros!
The PSS, or post-settlement settlement, refers to an agreement made after the initial deal has been approved. It’s a common negotiating practice that is part of the corporate culture at some companies. For many, it’s a source of inspiration.
Why do we often hesitate to enter into discussions on a PSS? Probably to avoid giving the impression that we want to renegotiate or that we’re not satisfied with the deal.
But there are some good reasons for negotiating a PSS:
- The agreement that was just signed is a testament to both parties’ ability to work together under good conditions. They just reached an agreement, so there should be a positive climate for discussions.
- Because in general, once an agreement is signed, the parties feel more open to sharing information, which paves the way for even better agreements (the conditions are more conducive to the integration process).
- The parties’ BATNA is the agreement they just signed, so at worst you stick with that, and at best you improve the deal for both sides.
Develop your PSS negotiating skills and stay on your toes when your contacts bring them up with you, for example under the pretext of productivity plans. Buyers are often loathe to sign long contracts, so that they have more leeway to negotiate on an ongoing basis. For years they’ve been seeking out shorter contracts and attempting to renegotiate them as quickly as possible. But the situation is changing in many sectors. Shortages, bullish markets for certain products and materials, supply-chain limitations— the stage is set for suppliers to be the ones who take advantage of post-settlement settlements.
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