A few years ago, I was bidding to deliver a negotiation training for the MEA team of a large global consultancy group. The first step, as is usually the case with MNC clients, was to run a pilot. The T&C’s of this pilot however were quite unique: in order to work with the company, I had to sign a 2 year exclusivity clause preventing me from delivering any training of any type to 10 of their top competitors. I refused to sign the agreement unless the exclusivity clause was removed.
Everything has a price and removing 10 large potential clients from my target client base is no exception. When I objected to the originals terms, I made the following points: (i) that this was only a pilot, there was no guarantee that they would select me for the role out. Exclusivity discussions should only happen if I was selected; (ii) the project was for negotiation training – it was not fair or appropriate to apply the exclusivity to other content such as leadership and communication trainings; and (iii) there would need to be a minimum guaranteed annual business volume attached to any exclusivity agreement.
During this period, I was discussing the scenario with a friend who is an excellent trainer and public speaker and targets the same clientele as I do, albeit offering a totally different service. He commented that he is often asked to sign such clauses and he typically agrees because he usually isn’t dealing with the company names listed in the exclusivity clause. I commented that this approach is not advisable for multiple reasons...
Firstly, in negotiation you should avoid giving something away without asking for something in return. It sets a dangerous precedent. Your counterpart will devalue your offering, thinking that what you gave was of little value to you. Therefore, they won’t feel obligated to reciprocate and will likely ask for more going forward.
Secondly, by giving ground without any fight, you project weakness. Not only will many counterparts take advantage of this by securing better terms for themselves at your cost, but even worse, they may lose respect for you and larger business deals will go to your competitors. It is human nature to seek to partner with those who we see as strong which in turn projects stability.
Finally, even if the counterparts on the list are not current or target clients (as was the case with my friend), we should not give them up for free. We never know where the next opportunity will come from, and by giving up that optionality, there is a potential opportunity cost to future business.
The messaging we give when we negotiate directly relates to the positioning of our brand and how others perceive us. It is normal and advisable business practice to extract value in return for delivering value and in my experience, good clients understand and respect this principle.
In my scenario, the client agreed to remove the exclusivity clause and the pilot went ahead.
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