Manufacturer Lands $200 Million Sale with Negotiation Coaching
The company’s largest-ever contract creates $4 billion in market capital
Manufacturing Capital Equipment Producer NDA In Force
- Founded in 1976.
- Designed and built high-tech manufacturing equipment.
- Purchased by its largest competitor in a 1998 merger.
- Currently serves clients in the computing, automotive, entertainment and wireless markets.
Business Benefits Realized
- Closed a $200 million contract with a Fortune 500 company.
- Led to numerous additional multi-million dollar contracts.
- Went from number four to number two in their industry in two years.
- Created more than $4 billion in market capital for the company.
- Boosted stock value from less than a dollar a share to more than $50 a share.
- Resulted in an extremely profitable merger in 1998.
The entire company was still in shock when the phone rang. On the other end of the call was the purchasing agent in charge of this once-in-a-lifetime potential contract, and she wanted to know what the standard discount was for purchases of this size.
Earlier that morning, the company’s largest RFP to date had arrived: a contract with a Fortune 500 company that was easily worth more than two hundred million dollars. It couldn’t have come at a better time. Though the relatively small company was innovative and entrepreneurial with industry leading technology, it was having trouble securing the margins of profit it needed to grow and prosper. As a result, the organization was struggling and its stock was trading at less than one dollar a share.
However, this contract presented a seemingly insurmountable hurdle. One of the other three RFP recipients was the incumbent supplier, and also the biggest name in their industry. Though hesitant to admit it, company leaders felt they didn’t have a good shot at the much-needed deal.
A Change in Attitude
The company’s leadership realized that to have a chance at landing this major contract, they would need a heavy dose of expert guidance. One strong board member knew just the person who could help them and that’s when they called top negotiation coach and author of Start With No Jim Camp. The board member knew first hand having worked with Camp as CFO of his own company what Camp could do. So with a reputation for bringing about successful outcomes in seemingly impossible negotiations, they were confident Camp and his system of negotiation was right for the job.
Camp’s first move was instructing his client to deflect that initial phone call. A key tenant of the Camp Negotiation System is to never let negotiations be driven by price, and that is exactly what the company issuing the RFP was attempting to do. Instead, Camp began to coach his client through the deal using his Camp Negotiation System. By helping the Fortune 500 indentify their problems and creating vision for them, Camp ensured that the solution to the problem, not the price, would drive this negotiation.
Closing the Deal
This was an enormous contract for a highly technical solution, and that made the negotiation extremely complex. For the next 18 months, negotiations on the contract occurred across every level of the company; more than 800 engagements took place in total. Camp ensured the entire process stayed on track from beginning to end through the use of The Camp Negotiation Management System made up of checklists, logs to be executed for each engagement.
During this time, company leaders saw the victories begin to add up. For example, when his client’s CEO used Camp’s system to secure a meeting with the Fortune 500′s CEO – something they had not imagined was possible – they were ecstatic. And then at that meeting, when the solution provider’s CEO used one of Camp’s scripts to obtain a promise from his fellow CEO that they would be given a fair shot at the RFP, they realized success was possible. These smaller victories only increased their drive to continue the negotiation through to its conclusion.
Eventually, through the use of the Camp Negotiation System, the vision had become complete. While the incumbent supplier had simply completed and submitted the RFP, their smaller competitor had worked with the Fortune 500 to uncover problems even the company’s own engineers hadn’t known existed. They had demonstrated how their solution would pay for itself over two years. And, they had proven their commitment to their potential client’s success. The contract was agreed upon at full price.
The $4 Billion Benefit
Using Camp’s coaching services, the manufacturing equipment solution provider made a $200 million sale – but that was only the beginning. A few weeks later, the Fortune 500 placed another $75 million order, and the initial contract grew to more than $500 million in just five months. Over the next two years, the lucrative business continued to pour in and the company’s stock price climbed from less than a dollar a share to more than $50 a share. All told, more than $4 billion in market capital was generated as a result of this successful negotiation.
By 1998, the company was growing rapidly and showed no signs of stopping; they had risen from number four to number two in their marketplace. As a result, they received and accepted an extremely lucrative merger offer from their largest competitor. Today, the merged company remains a driving force in its market. Though a number of the company’s former executives and members of the board have moved on to other ventures, they remain strong believers and loyal clients of Camp’s negotiation coaching services.