How to Use Analytics in Contract Negotiations

#Negotiation Tip Number 4: Gather and Leverage the Data.   In his book “Moneyball,” Michael Lewis quotes John Henry, renowned investment manager and owner of the Boston Red Sox, in reference to a comparison between professional baseball and the financial markets, “People in both fields operate with beliefs and biases. To the extent you can eliminate both and replace them with data, you gain a clear advantage.” Since that book was published, data analytics has become a vital part of how almost every major professional sports team makes decisions. Data is equally important in commercial real estate negotiations. Most CRE professionals realize the importance of obtaining data, but few understand how to fully use it to achieve a successful outcome. In a negotiation while representing a buyer of a low-rise office building in a submarket with dozens of similar-sized office buildings, my team cherry-picked comparable sales and sent them to the seller’s representative, making a case for a purchase price around $90 per square foot. On the contrary, the seller’s representative made the case that the purchase price should be closer to $100 per square foot — submitting their own version of comparable sales as justification. At this point, our team was certainly tempted to accept the invitation from the seller’s broker to play the high-low game. Instead, we evaluated the seller’s comp set to determine how we could either work toward bridging the gap or defend our original position all while trying to achieve our client’s goals. As we dissected both data sets, we were able to see that many of the seller’s comparable sales had already been renovated, while the property being bought still needed cosmetic renovation. That was telling from a qualitative analysis, but the most convincing case came when we put both sets of sales comps on a line graph to show the trend in sale price per square foot over time. This line graph was very helpful for both the buyer and the seller to understand the current value of the property as the next data point in a trendline. Ultimately, they agreed on a purchase price that equated to $87 per square foot. Both sides had data, but it wasn’t until it was dissected and brought to life that anyone truly understood how it brought relevance to the negotiation. #CapitalMarkets, #InvestmentSales, #CRE, #CommercialRealEstate

The biggest negotiating win for my clients last year? $10,000 in 15 minutes. Here's how we did it. 1) We compared the offer to the 2024 Randstad Life Science Salary Guide and adjusted it for the geographic location. The evidence demonstrated that the offer was $5k under market. 2) We verified that information by comparing to publicly available data from the Bureau of Labor Statistics. Again. $5k-$7k under market. 3) We drew attention to the fact that if my client left her current job, she'd miss out on a $5k bonus in the next three months. 4) We asked if there was a budget available to compensate for this through a signing bonus. 𝗧𝗵𝗲 𝗿𝗲𝘀𝘂𝗹𝘁? $5k salary offer increase + $5k signing bonus. She made $10,000 over a 15 minute phone call. Not bad for a day's work. ---------- Next time you're negotiating a job offer, remember the power of data :)

I see lots of different rate structures at ShipScience, and it always amazes me how the combination of small, negotiated changes can add up to transformative savings. Knowing what I know now, here's how I would approach negotiations as an e-comm exec: 1) Before you even start negotiating, get a tight grip on the data. Have a way to run a savings analysis before you begin and at each proposal. Do not just accept the analysis your carrier provides you. Trust but verify. This is a MUST. Analyze average weights, package sizes, and common delivery zones helps you catch patterns—like surcharges or zones that inflate costs. Dial those in operationally, negotiate where you need to.   Monitor historical carrier performance. If certain routes or services keep driving up charges, consider alternative carriers or service levels.  If SLAs are below expectations, use that to your advantage in negotiations. Go way deeper than just your "discounts". Surcharges are critically important to measure/track impact. You also need to know the hard-to-calculate factors like DIM divisor impact and minimum billable impact. Those will often void your deep, short-zone discounts. 2) Negotiate proactively, and keep a tight timeline. Know that everything on your rate card is negotiable. Provide exact details on every element you want the carrier to move on, and requested discounts for each. Ask carriers to outline the thresholds for bonus discounts or waived fees - usually you can get wins by offering upside to the carriers.  3) Review your packaging. Oversized or loosely packed boxes may push you into a higher price bracket. Sturdier, right-sized parcels mean fewer damage claims and improved carrier relationships.  4) Generate maximum (friendly) negotiation leverage. Carriers should know that you're rate shopping shipments and working with multiple carriers. Check your existing contract terms here, but try to manage your carriers into an annual review cycle, giving them the opportunity to earn significantly more business each year with big improvements to their rates. Watch out for trap doors in contractual language - carriers are know to have tricky legal language in their contracts. Make sure that all concessions you give have benefit back to you. And be sure not to lock yourself it unnecessarily, as you'll lose leverage in future negotiations. By focusing on these preventive measures, you’ll protect your budget while boosting delivery reliability. #Shipping #Logistics #Parcel #UPS #FedEx #CostSavings #Business #Ecommerce #Transportation #SupplyChain

Several times M&A negotiations stall not because of unrealistic demands from the other side but because of ❗️uncommunicated assumptions about business performance and risks and ❗️lack of a data-driven negotiation process. Two examples from the past six months: 1️⃣ We represented a buyer team, involving a complex earnout scenario in an acquisition. Negotiations around valuation and deal structure began to stall because the target felt we were pushing for a structure that would penalize the target unfairly for post-close performance. 2️⃣ We represented a seller that believed in their forward performance. However the top few potential buyers were skeptical and didn't believe our client could hit the numbers. ✅ Solutions to both scenarios: 🎯Instead of negotiating with the other side in a vacuum, we built and shared a more detailed model with them with our drivers and our assumptions based on historical data and the customer pipeline. 🎯 The discussions moved from the abstract to collaboration on a shared set of numbers and business assumptions. 🎯 We were able to step through specific scenarios and have a much more nuanced, granular discussion, with each side using the same framework and model structure. 🎯And we were able to drive to a successful resolution in both deals. (This is NOT saying that you open everything to the other side. Knowing the parts of the model that should be shared for negotiation purposes and those that shouldn't be is critical). But sometimes the best path forward in "stuck deals" is throwing light on the data. #mergersandacquisitions