Don’t
Mistake
Negotiating
For
Haggling
A common
negotiation mistake made by many sales people is believing that
negotiation is about persuading the other guy that he wants
what you're offering and then making some sort of concession in
return for a contract.
There is a flaw in this logic - firstly, the term "negotiate" is
well overused. Often, when sales people say, "We're just
negotiating with the client" they actually mean, "We're just
haggling over the price." Haggling is not negotiating. Haggling is
about offering your product for a reduced margin - you're
simply making price concessions until the buyer says yes.
Negotiation though, is about getting something of equal or
higher value, in return for any concessions you make. For
example, getting a buyer to extend the term of an outsourcing
engagement in return for a slightly lower price.
Secondly, to enter into a negotiation, all parties need to
believe it is in their interest to do so. How often have we found,
as salespeople, that we believe we have a product or service
which will help the customer, but the customer doesn't seem to
see it that way?
I've spent many hours over many years sitting beside salespeople
during negotiations. I'll see the salesperson begin to come to the
realization that even though the benefits to the customer seem
obvious, the customer's just not "getting it."
All too often the next step by the salesperson is to start
dropping the price in the mistaken belief that in doing so, the
customer will suddenly realize that there is indeed some benefit in
the product or service and decide to buy it. The salesperson
believes they're negotiating, but in reality they're in a one-sided
haggle with someone who doesn't want their product!
People only realize that is in their best interest to negotiate
when they perceive that the costs associated with saying "No" are
unacceptable. So what can you do to help a prospect go from a "No"
to a "Maybe" -- something you can build on?
- Research your prospect to find out what difficulties they might
be facing.
- Ask questions to help the customer think about these
difficulties and what they are costing them -- ideally in terms of
dollars.
- Ask the questions that help discover what it might take to
shift the prospect from the status quo -- the "Under what
circumstances?" questions:
Under what circumstances would
you consider committing to an un-budgeted spend?
Under what circumstances would you be able to give me
commitment?
Under what circumstances would your management agree to
this?
Under what circumstances would you be able to do this?
If your prospect tells you there are circumstances under which
they'd agree, then they are now a provisional "Yes" and you are now
able to negotiate. If there aren't, then you know not to waste
your, or their, valuable time by exploring the issue further. You
can agree to revisit at a later date.
Negotiating skills are the oil in the machine.
The difference between seller and buyer interactions that work
and those that don't is trust. Not necessarily the trust that takes
five years to create - I mean the trust built up over a short
period of time (sometimes in just a few minutes) by a good use of
skill and process, and most importantly, an attitude of openness
and sharing of information.
The question every seller should ask themselves is not, "How can
I sell my stuff to this customer?" It's, "How can I give this
customer what they want, on terms that are acceptable to me?"
Tips For Better Negotiations:
1. Be Well-Prepared
Prepare some great questions that will help you uncover the real
commercial issues facing your customer's organization and also the
issues of concern to your contact within the organization..
Prepare a long and comprehensive list of items you can ask for
which (in the event you need to make concessions) will recover, or
even improve, the overall deal for your company.
2. Be Cooperative
The easiest way for you to get what you want is to find out what
the other party wants and give it to them...but on terms acceptable
to you.
An attitude of openness will build trust. Trust is the
differentiator between seller and buyer interactions that work and
those that don't.
3. Get Creative
The more variables there are in a negotiation, the more
opportunities there are to keep re-packaging your offer to meet the
needs of the customer and your own organization.
4. Develop Your Negotiating Skills
A strong sales process gets your customer motivated to buy.
Negotiating skills get you a deal that will actually make you and
your organization money. Both skills are important; anyone can give
it away.
Adam Sands
Scotwork New Zealand
Click, to read more about our consulting team, the negotiation services we offer,
and our results.
Copyright Scotwork Negotiating
Skills 2011
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