PL  |  NL  |  FR  |  ES  |  PT  |  IT  |  DE  |  DK  |  NO  |  SE  |  FI  |  GR  |  JP  |  CN  |  KR  |  RU  |  AE

  Report this article

More information

Conflict Mediation

Commitment: Team

How to take advantage of working in a multicultural environment

Separating Partners From Nonpartners

Closeout Meeting Agenda/Key Review Meeting Agenda

Video Technologies in Communication

Traditional Verbal Communications Media

Counselling Interview

Traditional Written Communications Media

How to make meetings a valuable communication tool

How to make meeting participants feel confortable

USING PROJECT MEETINGS AS SUCCESSFUL COORDINATION TOOLS

Dealing with conflict and differences is rarely an easy task. Barriers to creative negotiation can be numerous and are often the saboteurs of a potential sale. Remember: your goal is to reach win-win-win-win settlements with qualified customers. To that end, I offer these five principles of creative sales negotiation:

Principle #1: Attitude First

Are you a good negotiator? Your answer reflects your level of confidence in your negotiation skills. Creating a positive mindset involves basic attitudinal characteristics, which become the building blocks for successful negotiation. Attitudes and skills must work in harmony. Attitudinal characteristics of negotiation include self-awareness, self-belief, and an openness to other viewpoints. Salespeople frequently overlook the importance of preparing themselves mentally. Attitude—how we deal with others when negotiating—drives the relationship. Develop a win-win-win-win attitude toward negotiation, and don't be satisfied until all parties are pleased with the solution.

Principle #2: Planning and Preparation

For many of us, planning is boring and tedious, easily put off in favor of leaping into action quickly. However, devoting insufficient time to planning frequently results in failure to negotiate a mutually beneficial agreement, and raises feelings of hostility and frustration.

The cornerstone to effective, creative negotiation is a carefully designed blueprint outlining specifically desired results for both you and your customer. The first step is to clearly articulate your position—know what your objectives are. Know the issues that are not negotiable and the issues that are negotiable. I refer to them as your "must-have" and "nice-to-have" issues. Must-have issues are predetermined prior to negotiation and are essential to a satisfactory agreement. They are simply not negotiable. Your nice-to-have issues are negotiable. Although they would be nice to have, they are not essential to the agreement. They are issues you are prepared to concede or use as trade-offs in the interest of concluding the agreement or maintaining the relationship.

Your window of flexibility is guided by your predetermined min-max points—min being your lowest acceptable point and max being your best, most ideal position. So, in the interests of creative negotiation, each of your must-have issues should be accompanied by a window of flexibility—your min-max points.

As a sales entrepreneur, your must-have issue is making a profit. To do this, you are guided by the flexibility of your predetermined min-max points. As in Figure 10.1, the ideal situation is a max-point of $150 whereas your min-point is $100. Any price lower than your min-point is unacceptable—you may have to entertain other avenues, such as concessions or tradeoffs, to secure the deal. The wider the spread between your min-max points, the more flexibility you have to negotiate. Otherwise, you may become too rigid and inflexible, deadlocking the negotiation. In terms of your nice-to-have issues, I suggest there are no min-max points. These issues are subject to negotiation and may be used as concessions to advance the deal. The key to creative negotiation is knowing your parameters prior to negotiation. Whenever possible, plan your strategy beforehand. It's tough to negotiate creatively if you don't know the parameters of your destination. In creative negotiation, those who ask for more typically get more ... and those with low targets typically underachieve.

Also, consider whether negotiation is appropriate at all. It may be a C account or a C opportunity. In some sales situations negotiation can take place spontaneously, so be aware of the status of the opportunity: A, B, or C. You may have to respond on the fly so be sure to have the complete account file with you at the call for quick reference to previous discussions.

The second step in negotiation planning is to define the issues worthy of negotiation. Refer to all your notes and assemble all the issues, yours and your customer's, into a comprehensive list. Some issues may have been resolved prior to the negotiation, which is fine, but be sure to identify any outstanding issues. It can be frustrating and costly—in terms of time and success—if the customer calls you just prior to inking the deal with an unresolved issue. After the issues are assembled, the next step is to prioritize them. By sharing the list with your customer, you continue to build trust and confidence as you work through it together. Extract relevant information from your notes to enhance your position. A comment in your notes from six months ago may be a valuable piece of information. Salespeople often compensate for inadequate planning by conceding more than necessary. This shortcut can be very costly.

Sales entrepreneurs cannot afford to be quick and clever during the give and take of negotiation. Planning increases your negotiation success substantially and helps you achieve solutions that you never thought possible. Invest the time and energy (during janitorial hours) to prepare a strategy in line with your customer's behavioral style. Your strategy will help you relax, face fewer unknowns, and reduce stress.

Principle #3: Know the Lingo

The negotiation arena has a language of its own. I have seen many negotiation sessions fail simply due to not understanding the language of negotiation. My objective here is not to provide you with an in-depth study of all the nuances of negotiation but to create a mindset, an awareness, and an overview of the logistics of creative sales negotiation. I suggest you augment your negotiation skills and confidence by considering other publications on the subject.

Principle #4: Negotiate Price, Don't Sell It

Is price the most important aspect of the sale? No. Never has been, never will be. Customers have never based their buying decisions solely on price and I doubt they ever will. However, salespeople convince themselves that price is the number one motivator to purchase. Studies show that salespeople bring up price before the customer does 60% of the time. Why? I'm not sure but I suppose salespeople feel obligated to bring it up, or perhaps they have been trained to do so. It could even be lack of confidence or corporate self-esteem.

Many salespeople violate the sales process by introducing price too soon. Ideally, price should not be discussed until after your initial confirmation. During the call you need to focus on selling value and benefits to the customer. Don't mention price unless the customer asks or you are negotiating. I realize this concept may seem somewhat manipulative and irresponsible, but it isn't. I have confirmed several deals without the customer or me mentioning price. I think it's part of the rapport and trust issue I spoke of earlier. If a customer trusts you and feels comfortable with you, price is not an important issue. There is an implied understanding that your price will be competitive, otherwise you wouldn't be in business.

By shifting the conversation to price prior to initial confirmation, the salesperson has invited the customer to openly challenge the price. Some salespeople are convinced the customer's mandate is to hammer the salesperson into submission, finally succumbing to a rock-bottom price. Classic tactic of a C account. How to negotiate against price and discount pressure is a common challenge among sales professionals. You've probably heard it before, "Your price is too high. You'll just have to do better," or "It's a competitive market. Your competitors can beat that price," or "You'll have to show more flexibility on your discounting," and so it goes. When salespeople concede too quickly in these situations they not only reduce profitability, but also devalue their customers' perceptions of the product or service. Don't respond by asking, "What's the price they're offering you?" or "What price do I have to beat?" This is a common mistake because it shifts the focus to pure price and discount levels. Experienced negotiators shift the focus to value comparisons versus price comparisons.

When dealing with the price issue, be guided by knowing your min-max points. If you have price or discount flexibility, do not give it all away at once. Instead, concede slowly and reluctantly. Also, consider trading price concessions for major commitments. It could sound like this: "If I give you X price, will you give me net 10-day terms (or COD terms)?" If the customer is insistent on a discounted price don't hesitate to ask for something from them that makes the deal a win-win-win-win.

Acknowledge the customer's curiosity about price, but don't get sucked into a price debate prior to initial confirmation. For example, when you ask for their business using magic words, your customers may inquire about your price. Simply say, "Yes, I'm sure we both recognize that price is important, but at this point can we agree to do business together based on the benefits discussed, as long as I can give you a competitive price?" If the customer says yes to your initial confirmation, you now have a willing party with whom to negotiate. Consider the initial confirmation as a conditional sale; conditional upon working out terms and conditions supported by a competitive price. What salespeople need to realize is that if a fair price cannot be worked out then there is no deal. Final confirmation is conditional upon successful negotiation. However, don't negotiate all aspects of the deal and then focus separately on price. Make sure price or discount is part of the whole package, not a separate negotiation.

During negotiation be cognizant of your customer's behavioral style, and adapt. If you are selling to a Director and she wants to know the price prior to initial confirmation, I would be inclined to acknowledge the request and offer a price range. Don't be exact with your answer.

Principle #5: Negotiate the Issues, not the Personalities

Often, what causes you to become frustrated or angry in a negotiation is not the topic or issue, but your customer's personality traits. By putting emotional distance between yourself and the negotiation you gain a tremendous advantage. Negotiations often unleash emotions that short-circuit rational processes. We sometimes abandon our carefully designed strategy and resort to a flight or fight response. The key to effective, win-win negotiation is to react unemotionally.

From time to time you may find yourself dealing with an individual you do not particularly care for. Chances are you wouldn't invite him to go camping with you, but he may represent an A account and a sizeable business opportunity. Experienced negotiators understand that professionalism requires the ability to distance oneself from any emotional distractions. These may include biases, perceptions, values, fear of being exploited, egos, feelings, moods, stress, and so on. Parties can get too caught up in the emotions of negotiation. They become too close to the deal and overlook important facts that may help move the deal forward. In spite of all your efforts to build a personal relationship you may find yourself dealing with just a corporate relationship. You can both still benefit by simply doing business together and nothing else. Don't entangle relationship challenges within the negotiating process.

For most salespeople, the major barrier is simply the fear of negotiation. The very thought sends paralyzing shivers up their spines. The toughest hurdle is learning to be confident enough to stand up to the challenge. This means developing the ability to comfortably express a position without hurting anyone or being hurt. Many people find the straightforward, aggressive, business dialogue of negotiation intimidating. It's the same challenge with confirming: the fear of rejection or perhaps sounding too aggressive. Our natural human tendencies prevail—in our adolescent years we were taught that it was polite not to ask for things and never to be confrontational.

The best approach to dealing with the emotional aspect of negotiation is the pause button. Pushing the pause button means putting the negotiation on hold while you take a break to reevaluate the situation. This may be for a few minutes or an hour or after you have slept on it. Michael and Mini Donaldson offer this explanation:

Knowing when and how to push the pause button not only endows you with an aura of composure and confidence, but also gives you control over all the critical points of the negotiation.

They go on to say:

No single skill can be as helpful to you as the pause button in any situation laden with heavy emotional overtones. Almost by definition, you cannot fully prepare ahead of time for these situations. Your judicious use of the pause button can compensate. Pushing the pause button produces better results... or at least results that you feel better about.

The message is clear: don't be afraid to utilize your pause button. Use it to re-evaluate your position. Perhaps in the interest of flexibility it can become an opportunity to reconsider your must-have issues and your min-max points. Remember, with two willing parties, there is always a way.