SYMBIOTICNEGOTIATIONSDeal Skills for Life Scientists

James GilmoreStine Bergholtz

Can You Name the Most Common Negotiating Mistake Scientists Make?More Importantly...Can You Avoid It?

Move from humble lab rat to keen-eyed negotiator with the defi nitive guide to life science sales negotiations. From purchasing equipment to learning how to walk away, get the resources you need for your laboratory to level up.

Quickly learn how to negotiate with confi dence:

Easy-to-understand framework All worksheets included Real-life case studies from biotechnology

Practical strategies for eff ective negotiation are divided into three sections: Foundation, Advanced, & Mastering the Industry.

Filled with ProTips: Insider advice you can make your own.

Real-life examples: Learn from the successes (and the occasional mistake)of industry veterans.

Take Control of Your Research Money—Get More With Every Purchase

James Gilmore has turned hundreds of scientists into sales professionals for biotechnology vendors with the knowledge and coaching methods found in this book. Stine Bergholtz has conducted extensive research on the world’s top life science teams for the elemental strengths that give them an edge. Both are formally trained as life scientists; they now run BrainSpores in Carlsbad, CA.

SYMBIOTICNEGOTIATIONSDeal Skills for Life Scientists

Working with purchasing agents Signs of amateurs Common sales tactics

SY

MB

IOT

IC N

EG

OT

IAT

ION

S

BrainSpores, LLCMaking Bett er Scientistswww.brainspores.com

A A

SYMBIOTIC NEGOTIATIONS

A A

SYMBIOTIC

NEGOTIATIONS

Deal Skills for Life Scientists

James Gilmore Stine Bergholtz

A A

Copyright © 2014 by James Gilmore & Stine Bergholtz

This edition published in 2014 by BrainSpores, LLC.

ISBN 978-0-9960177-0-1

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, except as may be expressly permitted by the 1976 Copyright Act or by the copyright holder in writing.

Whilst every effort has been made to ensure that the information contained within this book is correct at the time of going to press, the author and publisher can take no responsibility for the errors or omissions contained within.

Typesetting by www.wordzworth.com Printed in the USA by Book1One Printing.

Brain Spores LLC 2588 El Camino Real F344 Carlsbad CA 92008 USA

www.brainspores.com

A A

Preface

How much extra are you paying for equipment and reagents to get your research done? Even more importantly, do you know how to capture that extra so you can convert it into more research?

Having worked in the life science industry for over two decades and for one of its largest vendors, Stine (pronounced “Steeneh”—she’s Norwegian) and I had a pretty good idea of how much extra was being spent. Additionally, I have had the opportunity to train hundreds of former scientists in successful negotiation tactics—turning them into life science sales representatives.

But it all looked very different when we switched from research and sales to startup entrepreneurs. We found ourselves setting up a 3D bioprinting lab from scratch, which as you can imagine, required considerable equipment and reagents. Additionally, since the lab was located in a DIY biospace, we were interacting with like teams facing the same dilemma: how to bootstrap their research.

With a quick realization, we saw that we could reverse the process of our former training. Everything we knew about research, sales and market-ing could be turned around to drive savings and stretch our research dollars. As we strategized, we shared the tips with our (grateful!) colleagues, who inspired us to expand the discussion, and we began posting our strategies on the BrainSpores blog (www.brainspores.com). We weren’t prepared for the response—these negotiation tips were some of the most hotly viewed and highest rated posts we generated.

A blog has its limits though. There was no way anyone would learn enough from a blog to even begin mastering the subject of negotiations in the life sciences. With that realization, Symbiotic Negotiations was born—a complete course in negotiations, geared directly towards

scientists, with tips and worksheets that would allow our colleagues to start immediately improving their negotiations skills.

The book you’re reading now is only a portion of the course; we decided to include real-life case studies and questions, accompanied by video so that users could see and hear a negotiation, and then analyze each step. Though scientists are our main focus, sales representatives, purchasing agents, or those wanting a better understanding of our industry will also find the book and course a useful resource.

While there are two authors behind this book, we decided to write in first person for simplicity of reading and comprehension. Everything you read here is taken from our own experiences and research—in other words we own any omissions or inadequacies.

Over the development of this book and the course, we have benefited from the generosity and assistance from key friends and colleagues, in specific: Chelsea Batten—one of the best copywriters we know—for her tireless editing and masterful word-smithing, Morten Lukacs for early eyes and good advice, Carol Johnson for proofing and challenging our assumptions, Albert Salvato for videography, and Steve Erro for illustrations.

Our goal is to show how, give advice, warn off, extend money, and most of all, encourage. Negotiating can be uncomfortable, we know; what’s more it appears to be particularly challenging for scientists and researchers, who have little formal training in transactions or business. After years of delivering training in sales and marketing, there are few things more gratifying than seeing a formerly introverted scientist take charge of a negotiation and deliver an Opening with confidence and style.

It’s even more gratifying to be that scientist…you’ll see.

—JAMES GILMORE & STINE BERGHOLTZ MARCH 5, 2014

A A

Contents

Preface v

Part 1 The Foundation 1 Introduction 3

The Symbiotic Negotiating Framework 6 Win-Win Principle 8

Preparation & Planning for Negotiations 11 Negotiation Objective, Timing and Partner Analysis 13 Vendor Financials and Relationship 15 Vendor Referrals 19 Must-Haves and Wants 19 Tradeables 22 Preparing Your Opening 25 Concluding Your Homework 27

Opening 27 Trading Phase 32 Closing 37 Verifying 39 When and How to Walk Away 42 Summary on the Symbiotic Negotiation Framework 45

Part 2 Advanced Techniques 47 Introduction 49 Unacceptable Negotiation Behaviors 49

Disclosing Confidential Terms 49 Swearing/Profanity 50 Negotiating in Bad Faith 51

Signs of Amateurs 51 Threats 51

Bluffing 53 The Walk-Away Trap 54

Common Sales Tactics in Negotiations 54 Anchoring Effect 54 Limited Availability 56 Framing 56 Nibbling 57 Whirling 58

Negotiating for Equipment, The Next Level 58 Counter-Opening 60 Dealing with Multiple Negotiating Partners 63 Working With Multiple Members on Your Team 65 Negotiations and Gender 66

Part 3 Mastering the Industry 67 Introduction 69 How Vendors Work 70 How Sales Representatives Work 72 Who You Negotiate With Matters 74 Pricing in the Life Sciences Field 76 The Benefits and Pitfalls of Working with Purchasing Agents 77

How to Justify Purchases from Non-Preferred Vendors 80 Sole-Source Vendors 81

Preparation 82 Opening and Trading Phases 82

Summary 85

Appendix A: Negotiation Case Studies 90

Appendix B: Worksheets 1-9 101

About the Authors 111

PART ONE

The Foundation

T H E F O U N D A T I O N

3

Introduction

Valerie wandered into the office next to the research lab, dreading the day ahead. “I should be happy,” she thought wistfully, “my grant money has finally come through, and I can actually afford to get some research done.” But even while feeling fortunate that she'd survived the latest round of cuts, Valerie, like most researchers, considered any time not working on the lab bench or investigating promising new leads to be time wasted.

And today was likely to be a total waste.

She hoped a cup of tea would help. It didn’t; her calendar app showed a day still blocked out with appointments to talk with sales representatives. To achieve her milestones, Valerie's renewed funding was designated for a new sequencer—one with higher accuracy than the one she currently used. There were four companies that could potentially meet her needs, and each of them had an appointment for an hour-long sales talk. The first was just 90 minutes away.

“Half a day with sales representatives. Please, someone put me out of my misery,” Valerie said aloud.

“With anesthetic or without?” asked Andrew, coming into the office.

“Definitely without,” replied Valerie. Andrew was her brightest post-doc, and it would not be seemly for her to be seen taking the easy way out.

“So what’s your plan in dealing with these guys?” he asked.

“Ah! I was thinking of getting their lowest price, then maybe seeing if they could make a deal,” countered Valerie.

“Well, ok then.” Andrew raised his coffee mug in solidarity. “Let the games begin!“

You constantly negotiate—from “What should we have for dinner?” with friends, to “What movie should we see?” with a weekend date, to “Where should we go on vacation?” with family.

S Y M B I O T I C N E G O T I A T I O N S

4

Negotiating and bartering are nothing more than mechanisms used to bring two or more parties to a common understanding and set of conditions (terms). But as we all know, there is a clear difference between these familial negotiations and those within our profession.

Let's talk specifically about the life sciences profession.

In our profession, researchers will most commonly negotiate with life science vendors (in other words, sales representatives). These two sides come together to negotiate:

● In key purchases (commonly instruments or large reagent purchases) and

● On occasion, with corporations, if they are licensing technology.

Researchers also negotiate internally with human resources for salary or reviews, and perhaps when setting up new collaborations, but both these instances tend to be short-lived and rather infrequent.

In negotiations like these, the stakes are a bit higher than in a “What to have for dinner?” negotiation. You probably won’t lose your job if you choose a bad restaurant, but it is entirely possible if you can't deliver on a promise regarding contractual terms at work. Not only are the stakes higher, but also the deck is stacked against the researcher: a hardwork-ing scientist is negotiating against people who have been professionally trained.

I could sugarcoat it, but let's be honest: approach negotiations unpre-pared and the odds of losing are extremely high. I have negotiated acquisition of entire companies, set pricing strategies at one of the largest life science vendors, marketed and sold reagents, equipment and services, and trained hundreds of life science sales representatives in negotiation. In all this time, I've found that each different situation requires a different twist on negotiation techniques.

And yet, after 26 years in the industry, while I am convinced that there is no single way to successfully negotiate, there is an overarching framework that can be used to handle negotiations. It is easy to

T H E F O U N D A T I O N

5

understand as it is based upon a biological foundation all of us learned in undergraduate school: symbiosis.

In our community relationships between scientists are long-term with constant interactions. Various research teams trying to resolve a biological question will not only know each other, they are likely to be trading protocols and reagents—even as they compete for limited funding.

Additionally, sales representatives intend to stay in the field and are not likely to change roles. They rely upon the relationships they develop with their customers and intend to continue to nurture their connec-tion. Even the companies that provide tools to the community strive to foster loyalty with their scientist user base.

Due to the interdependencies and constant interactions, a biological description of the life science community would likely be Symbiotic and the relationships classified as Mutualism (as all individuals benefit). Symbiosis is the basis for our negotiations framework. The outcome you should target in your negotiation is where both sides benefit. It is not Win-Lose, but Win-Win. At the end of your negotiation, you need to retain your relationships, as you WILL be interacting again in the future.

The Symbiotic Negotiation Framework is easy to grasp and by using the accompanying worksheets in Appendix B you can immediately improve your negotiation skills. The major assumption is that your negotiations will primarily be with equipment, reagent, and service vendors. However, the framework can be easily altered to cover other types of negotiation—from dealing with unions to annual reviews.

We present it to you here, in real-world terminology free of business-speak, because we want you to be able to use it immediately in your life science negotiations.

Included throughout the document are ProTips—quick, helpful trail markers for situations you'll commonly encounter. We also cover common mistakes—and believe me, many of them are mistakes I've personally made.

S Y M B I O T I C N E G O T I A T I O N S

6

The usual suspects in life science purchase negotiations. The Symbiotic Negotiations Worksheets are designed specifically for these cases.

A quick word of warning: Before you enter into negotiations, be certain what you are asking is acceptable at your institute! Your institute may have guidelines on gifts- but it may also have agreements with vendors on prices. Messing with negotiated pricing and getting a one-time discount for your lab may have repercussions on pricing for the rest of the institute (not to mention impacting your personal relationship with your purchasing group).

The framework we present is intended for those who rarely negotiate formally. But it has plenty to offer seasoned industry professionals, as well. If there's one thing I know about negotiations, it's that there is always someone better than you, or a trick you haven’t encountered. That means I am always learning; so should you.

The Symbiotic Negotiating Framework

Throughout the book, I will use negotiating partner rather than adversary or opponent. Wondering why? It's not a Zen mind-trick...not