Increasing The Velocity of Negotiation
Sep 16, 2020 | Blog
Everyone knows – whether you are a natural businessperson, a complete newbie, or something in between – that good negotiation skills are crucial for your company and brand’s success. Without them, you’d be without the partnerships that make any of it work. You would have no steady suppliers, investors, fulfillment companies, or the myriad of other potential connections required to keep a profitable business afloat. However, what often goes underappreciated is that negotiation speed and deal velocity ultimately determine business growth speed. How does this work, and what can you do to improve this velocity? Read on further to find out.
What is Deal Velocity?
Deal velocity, closely tied to general negotiation speed or negotiation velocity, isn’t incredibly difficult to understand, although improving this isn’t always as easy as we would like. Deal velocity is simply the speed at which a company or individual party can negotiate to and close a contract deal. This is determined by taking into account everything from the initial deal preparation and drafting all the way through the final signing, and can be measured by a simple formula:
The number of sales opportunities in the deal cycle x average deal value x win rate percentage, all divided by the average days before your contracts are signed.
The resulting number gives you a concrete measurement you can work on going forward, but don’t worry too much about the numbers. Your primary focus should be streamlining the negative influences on this figure like collaboration difficulties, overcomplicated deal language, and more. This will speed up your negotiations (and make negotiation process management less of a headache!), increase the number of deals you make, improve your partnerships, and increase the rate at which your business grows.
Improving Your Negotiation Velocity
Good deal velocity is what brings further business growth. But it’s entirely reliant on your negotiation skills and how quickly you can work your way through the negotiating process, taking your negotiation table conversations and turning them into an agreement all parties can get behind. Slow negotiation speed completely throws a wrench in this and ensures that you will end up losing deals. We don’t want that, of course. The problem is, how are you supposed to get better at this? Well, there are a variety of different ways, including generally brushing up your skills but using technology to your advantage is one of the most helpful and immediate.
Several companies offer programs to help here, but our Intelligent Negotiation Platform™ SaaS service is among the best and most comprehensive out there. Unlike others, we focus on doing everything possible to simplify matters. Our service simplifies full-text contracts to just the key terms, getting rid of the legalese problem, and highlights the dependency between words, so you immediately understand how they relate to others. We also optimize these terms with machine learning and offer flexible collaboration tools.
Why bother? Because it makes the deal-making process more efficient and helps get teams and individual stakeholders on the same page far faster than would typically happen. Negotiation velocity and deal closure velocity naturally happen then, guaranteeing your business can flourish – and faster than ever.
Intellext is an AI startup that is revolutionizing the way contracts are negotiated, accelerating time to close, and improving deal terms. Intellext’s Intelligent Negotiation Platform™ eliminates the complexities of contract redlines and stakeholder collaboration and optimizes deal terms by applying machine learning during the negotiation process.