Steve Jobs is best known as being the business magnate behind Apple, the #1 Big Tech technology company in the world. One of the secrets of his success lies in his exceptional negotiating skills.
One of the many situations when Steve Jobs showed how skilfully he can negotiate was during the dispute with HarperCollins, one of the largest publishing companies in the industry.
Apple was in the midst of the deal with HarperCollins and five other big publishing houses to sell eBooks for $12,99, which was more than the price of $9,99 that Amazon was charging. A part of the deal was that Apple gets 30% of the revenue from each sale.
The issues that HarperCollins had was that they wanted the freedom to sell eBooks for a higher price of their choosing and that they weren’t satisfied with the cut Apple was asking for. Apple decided not to budge.
To help you become a skilled negotiator like Steve Jobs, we present you with five professional tips based on his email exchange with HarperCollins.
Show That You’re Ready To Walk Away
Jobs showed the importance of letting the other party know you won’t hesitate to move on if your terms aren’t met. He said that HarperCollins needs Apple more than the other way around. Since Jobs’ company already had other publishers on board, he stated that no matter how valuable the deal with HarperCollins might be to him, he would rather let it fall through than agree to their terms.
Sell the Big Picture
You need to show the big picture behind your terms. Jobs said that Apple was going to be the frontrunner of the eBook revolution. He backed up his claim with facts and numbers, saying that Apple’s iTunes and App Store have over 120 million customers’ credit cards on file and that they’ve sold more than 12 billion products. He ascertained that the company would sell more iPads than Sony or Amazon have sold their eBook readers.
Wait for the other Party to Make a Compromise
When negotiating your terms, you must never be the first to try to make a compromise. The best approach is to stay silent or restate your conditions, making the other party know that you’re not going to budge. Wait for them to show their weakness and use it against them, driving them to compromise instead.
Jobs refused to negotiate with HarperCollins. He explained his terms again and let the other party negotiate by themselves. As soon as the other party realized that Jobs wasn’t going to change his mind, they started to offer different terms, hoping that Apple would do the same.
Present All the Existing Options
One of the most common methods for successful negotiation is presenting the other party with all the existing options and ensuring that choosing your terms is seen as the best solution. In the email, Jobs let HarperCollins know that they can:
- Accept the terms that Apple had presented them with
- Stay with Amazon as the only distributor and sell their eBooks at the lower price of $9,99, which would devalue HarperCollins’ products and lower the publisher’s margins
- Pull their eBooks from both Apple and Amazon and deal with piracy as a result
While HarperCollins might have had other options that they weren’t aware of at the time, Jobs’ presentation was effective because it made them fear potential losses.
Use Social Proof
Social proof is a powerful negotiating tool because it enables you to make the other party believe that your terms are the best and safest option. People usually don’t want to take big risks. If you can provide them with evidence of what others think about your offer, you’re likely to persuade them to make a deal with you as well.
Jobs stated that four out of six big publishing companies realized that Apple is the company that can make the largest impact and decided to sign the deal. He added that all the major publishers agreed that Amazon’s price for new eBooks was eroding customer perception.
What Steve Jobs managed to do was negotiate his terms without being rude or pushy in any way. He provided valuable insights, backed up his points with facts, and presented his conditions as the best solution for the other party.
If you negotiate by presenting your case with confidence and letting the other party know that you’ve got plenty of information to back up your every claim, chances are high that you’re going to succeed in getting what you want.
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