• A Both Sides Gain Approach to Negotiation

    11/08/2016 in Sales Negotiation Skills

    Three magic words in successful negotiations are "Both sides gain."

    Your negotiation planning process should include making a list of alternative outcomes for an agreement where both parties can say that they have gained.

    Of course it does not mean that everyone will get everything they want. It may be easy to say "both sides gain" but the hard part is making it happen. Three general guidelines that will help you get started are below:

    1. In the planning process, identify possible “gain” outcomes for both sides. Identifying your critical needs and objectives is the first step. Next, to the greatest extent possible, try to anticipate the critical needs and objectives of the other party.
    2. During the negotiation, explore for options and alternatives on both sides. Make this a dialogue and be sure you are prepared with thoughtful questions.
    3. Emphasize what you are giving the other party, not what you are asking for. You are more likely to come to an agreement this way.

    Here is an example of a STAR negotiation where both sides gained. One of our large clients had their own training facility in Manhattan. The client had to make some budget cutbacks due to a slowdown in the economy. As such, they told us that they had to reduce the number of workshops for the next calendar year. We negotiated an agreement with them during which we reduced our fee so that they could continue to run the standard number of workshops with us. In return, we asked for the use of their training facility for other clients.

    This was a “both sides gain” outcome because we were able to use their training facility to win a lot of new business due to the fact that we could offer a training facility to other clients. From our client’s perspective, they were able to afford more workshops and exchanged the use of their training facility on unused days, in return for a price concession.
    This meant that the agreement met our need for growth and our client’s need to remain within budget.

    Call us at 781-760-6248 or email info@salestrainingandresults.com to discuss a customized Negotiation Skills workshop. Additional negotiation online training resources include our Negotiation Concessions Sales Meeting Kit and One-on-One Coaching for Sales Negotiation

  • One-on-One Coaching for Sales Negotiation

    06/20/2016 in Sales Negotiation Skills

    How can coaching on sales negotiation help you? Negotiation is a critical part of the sales process yet many sales professionals tend to make several common mistakes during a negotiation, in particular when faced with adversarial tactics.

    Here are two common sales negotiation mistakes:

    First, when planning for a negotiation one of the most critical steps is to make sure that you prepare and practice your opening position:

    • How much should you request in your initial offer?  
    • What is your walkaway point?  You must know this before the negotiation begins.

    Second, how can you respond effectively if the other person uses adversarial negotiation tactics?  Average negotiators become flustered and make concessions when the other person becomes adversarial.  For example, what would you do if the other negotiator says, "You've got to do better than that."?

    Coaching can eliminate these common mistakes. Improve your skills and ability to manage your sales negotiations with this Sales Negotiation Coaching package. Research demonstrates that when it comes to sales professionals, nothing influences the bottom line results more than a solid coaching program. Because sales professionals naturally are confident, competitive and self-motivated, they tend to be more invested and engaged in the process of self-improvement. STAR's coaching process provides a two-way conversation and other resources that will help you assess strengths, identify weaknesses, practice new skills, and meet your sales goals.

    All STAR coaching packages may be customized. Visit our Selling Essentials, Key Account Management and Custom Coaching packages for more information. Contact us at info@salestrainingandresults.com or 781-934-0900 to inquire about changing this package to suit your needs.

  • Negotiation Tactics: How Do You Respond to the Good Guy/Bad Guy Routine?

    08/05/2014 in Sales Negotiation Skills

    We don’t ever recommend using adversarial tactics during negotiations.  But we do advise that salespeople need to become aware of the various adversarial tactics so they can become skilled at appropriately responding.  The goal when negotiating with someone acting in an adversarial manner is to move the negotiation in more productive avenue that fosters the relationship.  You certainly don’t want to react in a way that would escalate the situation. 
     
    The term adversarial is defined as hostile, involving or characterized by conflict or opposition.  So, why do people act in an adversarial manner when negotiating?  Usually during a negotiation one side may choose to act in an adversarial manner to fluster the other side.  They are hoping to cause the other side to make a mistake and eventually to feel pressured into making a concession. 
     
    So, what specific negotiation tactics are used to try to make the other side flustered?  Salespeople should be prepared for these tactics, and specifically know how they might respond to these negotiation tactics. Remember, we don't recommend using these negotiation tactics, but we do recommend that you are aware of them so you are not blindsided.
     
    Negotiation Tactics:
     
    False Authority the other side misleads you about his or her authority. You reach a deal with Person A, who then reveals to you that he/she has to get the approval of Person B.  
     
    Emotional Outbursts where the other party erupts into anger, used to cause discomfort for the other side.  By making you angry, the other person hopes that you will make a mistake or reveal some information that otherwise you would have kept to yourself.
     
    Non-Negotiable Demands is used to lower your expectations. If you don’t test it, you weaken your position.
     
    Deadline Pressure is used to cause time pressure to force a decision or some action that is a bad deal for you.  
     
    Good guy, Bad guy can occur in a team negotiation when one person acts tough and unreasonable and their partner acts nice and reasonable.  
     
    Threats become a problem is when explicit and punitive because they generally lead to counter-threats.  An effective response is to "warn, not threaten” the other person. 
     
    For details on how to effectively respond to these and other negotiation tactics, visit our25 Most Difficult Negotiation Tactics article. Managers interested in running an effective sales skills clinic, visit our Negotiation Currencies and Concessions Sales Meeting Kit page. Visit our Sales Training Workshops page for details on our traditional, live and customized negotiation workshops.
     

  • Why Do People Act in an Adversarial Manner when Negotiating?

    07/28/2014 in Sales Negotiation Skills

    When negotiating, salespeople often encounter what we call adversarial tactics.  The term adversarial is defined as hostile, involving or characterized by conflict or opposition.  So, why do people act in an adversarial manner when negotiating?  Usually during a negotiation one side may choose to act adversarially to fluster the other side in hopes they will make a mistake and eventually to feel pressured into making a concession. 
     
    So, what specific tactics are used to try to make the other side make a concession?  Salespeople should be prepared for these tactics, and specifically know how they might respond to the following tactics. 
     
    Budget tactic "This is all I’ve got…” indicates the other side is trying to convince you that they have a dollar limit or some other restriction placed on them by their organization. 
     
    Killer Phrase "You’ve got to do better than that” might work well against average negotiators who tend to make an immediate and unilateral concession. 
     
    Split the Difference It is hard to say no because this appears to be so reasonable, but it is often a one-sided outrageous initial demand.  
     
    Cherry Picking This refers to when a customer gets multiple bids, and then tries to get the best or lowest offer on each item by playing one supplier off the others. 
     
    Take It or Leave It "This is our last and final offer…” indicates the other side is trying to convince you that they have reached their limit.  
     
    For more information on negotiation tactics, read STAR’s 25 Most Difficult Negotiation Tactics article. Managers interested in running an effective sales skills clinic on negotiation currencies and concessions should visit our Negotiation Currencies Sales Meeting Kit page. 

  • Negotiation Tactics: Behavior Speaks Louder Than Words

    07/09/2014 in Sales Negotiation Skills

    Tactics are behaviors – actions used by the negotiator to serve a purpose or to pursue an objective. Tactics can be verbal and/or nonverbal.  One of the first things that negotiators or anyone skilled in communication learns is that every piece of behavior communicates.  Whether we want to or not our behavior speaks louder than the words we use.  For example, have you ever developed a series of assumptions about a person just by watching him or her enter a room and shake hands, without that person uttering a single word.
     
    Negotiation tactics can work to strengthen the relationship or can be used to intimidate, discourage, anger or upset the other party.  Tactics can be skillfully planned or just happen in the course of a negotiation. Tactics that are intended to intimidate, surprise, or tip the power balance are called "Adversarial Tactics”.  
     
    Successful vs. Average Negotiators
    Average negotiators tend to make three common mistakes when they encounter adversarial tactics. First and foremost, average negotiators concede too much, too soon, on price. Second, they lower their expectation level for the overall negotiation. Third, they become intimidated or flustered, and end up making a bad agreement just to escape the situation.
     
    By contrast, successful negotiators are flexible and creative when they respond to adversarial tactics.  
     
    In general, successful negotiators respond to adversarial tactics as follows: 
    •Remain calm 
    •Suggest a break (or caucus), if needed
    •Ask more questions to explore for alternative options
    •Make a concession only if the other side reciprocates
    •Hold firm on price but offer an elegant currency instead
    •Warn, but not threaten the other person about the consequences of the adversarial tactic
    •Get their needs met elsewhere
     
    For more information on negotiation tactics, read STAR's 25 Most Difficult Negotiation Tactics article. If you are a sales manager and need help coaching your team on negotiation skills check out our Giving and Getting Concessions when Negotiating Sales Meeting Kit
     

  • Reaching Better Agreements During Contract Negotiations

    06/20/2013 in Sales Negotiation Skills

    Negotiation training has never lost its importance and relevance.  STAR’s Negotiation Skills Workshop is one of our oldest and most popular workshops.

    Because negotiation skills are so crucial in today’s turbulent business climate, we will address some special considerations that occur during contract negotiations.  Contract negotiation can be especially challenging, and requires some extra attention in both the planning and execution phases of a negotiation.   Listed below are four critical areas that will help you reach better agreements during contract negotiations.

    Four Critical Areas for Contract Negotiations

    1. Contract negotiations are more complex.  Many negotiations are fairly straightforward and only have one or two critical issues, but contract negotiation almost always involves multiple issues. As such, you must analyze the other side’s multiple issues and consider questions such as the following:
    • Which of their issues are most crucial (their "must haves”)?  
    • Why is this issue important to them?
    • What are some alternative ways that we could address that issue?

    The answers to these and similar questions will help you to brainstorm some alternatives and improve your ability to give and get concessions. 

    2. Always assess the BATNA for both sides.  The acronym BATNA ("Best Alternative To a Negotiated Agreement”) was first popularized in the book Getting To Yes by Fisher and Ury, and is especially relevant during contract negotiation. Before you start the contract negotiation, you need to answer these two questions:

    • First, if we don’t reach an agreement with the other side, what other alternatives do we have?
    • Second, if the other side doesn’t reach a deal with us, what other alternatives do they have? 

    The answers to these two questions determine who has the power in a negotiation, and affect your overall strategy and approach.

    3. Increased use of negotiation tactics can and will be used during contract negotiation.  Negotiation tactics commonly used in contract negotiations are "caucus”, "change the negotiator” and "good guy/bad guy”.  For example, the good guy/bad guy tactic can occur in a team negotiation when one person acts tough and unreasonable and their partner acts more conciliatory.  Remember, if the other side is using this on you, neither side is really the good guy.  You can react by walking out, protesting, ignoring the bad guy, or using your own bad guy.  Humor can sometimes work ("Hey, I know what you're doing...I saw it on TV.") 

    In STAR’s negotiation workshop we spend a lot of time learning how to use and respond to negotiation tactics. If you are interested in learning more about the most common negotiation tactics, please access one of our free sessions 'What Do The Best Negotiators Do?' on our Sales Negotiation Skills Online Training page

    4. Team negotiations are more likely to be relevant in contract negotiations. This presents some additional opportunities and challenges.  A well prepared and functioning negotiation team will always do a better job of negotiation than a single individual.  However, it requires greater skill and effort to form and negotiate effectively as a team.  Important questions include:

    • Who should be on your team?  
    • Who will lead the team, during both the planning and execution stages?
    • Overall, how can you take advantage of each person’s strengths?
    Thorough preparation is the key to walking away with a better agreement during complex contract negotiations. Achieving success during contract negotiations requires the use of effective planning strategies. Dealing with the additional obstacles of tactics and counter-tactics is difficult, but when handled well, can help build better relationships with customers. Finally, teams require special planning and attention.  A group of people thrown together is not a team and will not benefit a contract negotiation without careful planning and attention.  

    Please visit our Sales Workshops page to learn more about us.  Also visit our Negotiating for Success workshop page and the Giving and Getting Concessions when Negotiating Sales Meeting Kit page

  • Cross-Cultural Influence and Negotiation

    06/20/2013 in Sales Negotiation Skills

    Since most of the readers of this newsletter are located in the United States, many of the examples in this newsletter discuss some business challenges between Americans and other countries and cultures. However, the general principles in this newsletter apply to all situations where two or more cultures are involved.

    Seven Common Pitfalls When Influencing and Negotiating With Other Cultures

    1. Don’ be ethnocentric. To say this a little differently: many people believe, consciously or unconsciously, that their culture is superior to others. That approach will hurt you during cross-cultural business negotiations and influence situations. If you insist on doing everything "your way”, the other person is likely to resist or offer passive compliance at best.
    2. Subtle translation issues are often missed. Unless you are extremely fluent in another language, you are likely to miss some colloquiums or the intended meaning of a particular phrase or symbol. Here is a simple example. One of our most popular sales training topics is STAR’s trademarked questioning technique known as IDEAL Questioning. In English, the acronym IDEAL stands for 5 types of questions (Informational, Dissatisfaction, Expansion, Action, and List Options). Yet, when translated into Spanish by one of our multilingual instructors, the words and the concept translated okay but the resulting acronym in Spanish was meaningless.
    3. Silent translation issues, notably body language and gestures, can be offensive. There are always translation issues when translating from one language to another but there’s also the unknown behavior, notably body language and non-verbals, which can offend the other person. For example, the "OK” sign in the United States where you touch your first finger to your thumb (making a circle) while the rest of the fingers stand tall is very offensive in many other countries.  In Saudi Arabia and some other cultures, it is very disrespectful to show the bottom of your shoe to someone…so when Americans cross their legs and any part of the bottom of the shoe is showing then we are offending that other person.
    4. Are you task or relationship-oriented, or do you focus on both factors? Many Americans are task-oriented, which works well when it is time to get down to business or to do a particular task. By contrast to many other cultures, which tend to focus more time and more sincerely on the relationship, we often approach a situation too abruptly. In many cultures the first meeting will be completely focused on relationship building and finding common ground. In relationship-oriented cultures, patience is the key to success and expecting to get a deal done during the initial meeting is unrealistic.
    5. Should you be formal or informal in your overall approach? This manifests itself in several ways. Some common examples: Do you use first names, last names or titles when introduced and speaking with the other party? Does the senior person on your team purposely make the opening and closing remarks? In some cultures, it would be disrespectful to use the other person’s first name, and inappropriate if a junior member of the team spoke out of turn. To the extent you want the other side to be comfortable, be aware of your tendencies and the accepted practices of the country and culture that you are visiting.
    6. Humor rarely translates well. I recall firsthand an observation from an overseas licensee that I was meeting with many years ago when I was in a different job in a different company. He confided that it puzzled him why Americans tend to use humor so often to open a meeting or a conversation. What we consider a humorous icebreaker is often viewed as puzzling or inappropriate by many other cultures.
    7. Different cultures have a different perspective on the use of time. For example, an agreement to meet at 10:00 a.m. for a business meeting may be viewed as a punctual commitment by some cultures, and merely a suggestion by other cultures. Time-related factors need to be explicitly stated. If a deadline is truly firm, be very clear.  

    Two General Suggestions

    There is an enormous amount of material that could be shared and learned about cross-cultural differences. The seven pitfalls mentioned above are by no means the only potential problem areas.   In a newsletter of this scope, it is difficult to give a lot of detailed suggestions, so let’s end this month’s newsletter with two simple yet effective suggestions. 

    1. Try to always have someone on your team that is from that country and culture.This will help to ensure that many of the pitfalls mentioned above, such as translation and timing issues, are avoided.
    2. Do some preliminary research on the country or culture before visiting. If you can show the other person that you’ve at least tried, it helps. This also will help to mitigate the tendency toward ethnocentrism.

    STAR has two workshops that address the skills and concepts in this newsletter.  Please visit our Sales Workshops Page to learn more about our workshops that teach the skills involved in cross-cultural influence and negotiation:  How to Achieve Results Through Influencing Workshop and Sales Negotiation Skills Workshop

  • Negotiation Currencies of Exchange

    06/19/2013 in Sales Negotiation Skills

    Successful negotiators differentiate themselves from average negotiators in several ways, starting with how they plan and prepare for a negotiation.  This newsletter is the third in a three-part series on the planning process followed by the most successful negotiators.    

    Negotiation Planning Process 

    Four interrelated steps constitute the planning process followed by successful negotiators:

    Step 1: Identifying and ranking their critical needs and issues
    Step 2: Asking questions to identify the other side’s critical needs/issues
    Step 3: Planning their Settlement Range 
    Step 4:Creativity on Currencies and Concessions

    STAR's October and November newsletters focused on the first three steps of the negotiation planning process.  Please visit our website to view previous STAR Tips and Tools on our Blog.

    Currencies of Exchange

    Exchange, or "give and take," is the essence of negotiation.  A key step is to explore for and exchange currencies that will satisfy the needs of both sides.  Currencies are tangible or intangible resources that the receiving party values.  When assessing the potential value of a currency, keep in mind that currencies tend to have value in proportion to how well they satisfy the needs of the other party.

    The best possible outcome is to identify currencies that are perceived to have high value to one party yet are of little or no cost to the other party.  In general, the greater the number of currencies, the greater the chance of reaching a win/win agreement.  Let’s discuss the relationship between prime currency, alternative currencies, and elegant currencies.

    Tips and Guidelines on "Currencies of Exchange”

    1. Prime Currency, in most business negotiations, is money.  Average negotiators focus exclusively or primarily on money, and consequently their negotiations tend to become haggling.  Don't be average!  Use alternative and elegant currencies instead. 
    2. Alternative Currencies are anything, other than money, that has value to the other side, or to you.  The best negotiators are creative, and differentiate themselves by their creativity in introducing currencies other than price.  A simple example, "I can't go any lower on price, but I'd be willing to ....extend the warranty, provide 24/7 technical service, serve as a test site for your other clients, etc."  You will set yourself apart by offering options and alternatives, so an essential part of the planning process is to brainstorm as many options or alternative currencies as possible.
    3. The best case is to introduce Elegant Currencies, which are alternative currencies that have high value to the receiving party, and low cost (or no cost) to the giver.  During our negotiation workshop, we facilitate a brainstorm discussion to identify the most relevant elegant currencies for your organization or industry.

    Giving and Getting Concessions is a Critical Skill

    A concession is giving up all or part of a currency. Concessions are part of every negotiation.  After all, negotiation is "give and take."  The most common mistake made by average negotiators is to concede too much, too soon.  Don't be average!  Improve your ability to give and get concessions by following these guidelines:

    1. Always get something in return.  This is the most important guideline.  Average negotiators tend to make unilateral concessions.  Successful negotiators make concessions, but get something in return.  One interesting observation:  many studies on negotiation have shown that, paradoxically, the other side feels worse if you simply make a concession without getting anything in return.  It makes them feel as if they could have asked for more.
    2. Use elegant currencies whenever possible.  Recall that an elegant currency has high value to the giver, and is low cost to the giver.  The negotiation is more likely to reach a win/win agreement when you introduce and offer one or more elegant currencies.
    3. Finally, here is a subtle tip that many experienced negotiators fail to use.  Watch your pattern of concessions - the preference is to make a series of smaller and smaller concessions.  That way, you create the impression with the other person that you are approaching your limit.

    For more details, visit our Negotiating for Success Workshop page and our Giving and Getting Concessions when Negotiating Sales Meeting Kit. STAR helps clients prepare for upcoming negotiations. Call or email to learn more about our 1-on-1 coaching services. 

  • Negotiation Settlement Range Planning

    06/14/2013 in Sales Negotiation Skills

    Successful negotiators differentiate themselves from average negotiators in several ways, starting with how they plan and prepare for a negotiation.  This newsletter is the second in a three-part series on the planning process followed by the most successful negotiators.

    Negotiation Planning Process

    Four interrelated steps constitute the planning process followed by successful negotiators:

    Step 1: Identifying and ranking their critical needs and issues
    Step 2: Asking questions to identify the other side’s critical needs/issues
    Step 3: Planning their Settlement Range 
    Step 4: Creativity on Currencies and Concessions*

    STAR's October newsletter focused on the first two steps.  This month’s newsletter will highlight Settlement Range factors (Step 3), and next month will highlight Step 4.  Please visit our website to view previous blogs.

    Planning Your Settlement Range

    Every negotiation involves one or more issues.  Successful negotiators plan a Settlement Range of acceptable outcomes for each issue, whereas average negotiators plan a single point.  The Settlement Range consists of three elements:

    1. Opening Position (OP): This is the initial amount that you will request. Typically, sellers ask for more (higher price, longer contract duration, additional services, and so on) and buyers ask for less (lower price, shorter contract duration, unbundled services, and so on)
     
    2. Desired Settlement Point (DSP): This is an acceptable outcome for that particular issue.  In other words, you would be satisfied if the final agreement matched your DSP.  Another synonym for DSP is your "aspiration level”.   

    3. Walkaway (WA): This is the worst that you would accept for a particular issue. For example: the lowest price that the seller would accept or the highest price that the buyer would pay.  Please note that Walkaway can be both a strategic negotiation concept (when used in the planning process) and a negotiation tactic (you can ‘threaten’ to walk away during the negotiation to test how strongly the other side feels about their position).  Today we are focusing on the strategic use of the Walkaway.

    Settlement Range Tips and Guidelines

    1. Your Opening Position must strike a balance between being realistic yet optimistic.  The cliché, "successful negotiators ask for more and get more,” does have much truth. But, if you ask for too much, you increase the risk of deadlock (no deal).  Average negotiators tend to open too conservatively.  How can you set a realistic-yet-optimistic OP?  Factors include knowledge of the market, your competitors, your skill level, and whether or not you and the other party have other alternatives.

    2. Consider the following, Here is a key planning question: How much room should you set between your OP and DSP?  In general, you need to have enough room to allow for the expected give-and-take of concessions by both sides.  Average negotiators don’t allow enough room, and tend to settle for less than their DSP.

    3. Although it sounds obvious, always set a Walkaway.  Failure to set a WA increases the likelihood that you will make a bad deal. Average negotiators often believe that "no deal” is a sign of failure, and consequently don’t set or honor their WA. 

    4. Finally, we are NOT saying that the desired goal of your negotiation is to walkway.  Next month we will focus on the skillful use of Currencies and Concessions to increase the likelihood that you reach an agreement that is mutually beneficial to both sides.

    For more details, visit our Negotiating for Success Workshop page and our Giving and Getting Concessions while Negotiating Sales Meeting Kit page. STAR helps clients prepare for upcoming negotiations. Call or email to learn more about our 1-on-1 coaching services. 

     

  • What Differentiates Successful Negotiators from Average Negotiators?

    06/14/2013 in Sales Negotiation Skills

    Setting a goal is not the main thing.  It is deciding how you will go about achieving it and staying with that plan.” - Coach Tom Landry

    Successful negotiators differentiate themselves from average negotiators in several ways, starting with how they plan and prepare for a negotiation.  This newsletter is the first in a three-part series on the planning process followed by the most successful negotiators.

    Negotiation Planning Process

    Four interrelated steps constitute the planning process followed by successful negotiators: 

    Step 1: Identify and rank your critical needs and issues
    Step 2: Ask questions to identify the other side’s critical needs and issues
    Step 3: Plan your Settlement Range (especially the Opening Position and Walkaway Points)
    Step 4: Use Creativity on Currencies and Concessions (recall from an earlier STAR newsletter that the most common mistake made by average negotiators is to "concede too much, too soon”)

    What If You Only Have A Limited Time To Plan? 

    The most successful negotiators spend time planning all four steps, but they recognize that the first two factors — identifying their own critical needs and issues, as well as the other side’s — are the most crucial.  If only limited planning time is available, it should be focused on identifying the critical needs of all parties involved in the negotiation.  For the balance of this newsletter, we will focus on Step 1 and Step 2.  Our October and November newsletters will address Settlement Range factors (Step 3) and Currencies and Concessions (Step 4).

    Identifying Critical Needs

    The planning process should start with a focus on the critical needs of both sides.  Key questions for consideration when focusing on those critical issues are as follows:

    -How would it help you during the negotiation to focus on your most critical needs and issues?

    -Similarly, how would it help you to know the other side’s critical needs and issues? 

    STAR’s Negotiation Workshop participants respond to the questions listed above with some common themes, including the following responses: 

    • "There is no point in reaching an agreement if I don’t satisfy my most critical needs.”
    • "I’ll make a concession on a less critical issue, and take a stronger stance on my most important issues.”
    •  "The only way to reach a win/win agreement is to ensure that both side’s needs are met.”

    Negotiation Planning Tips

    Identifying Needs for all Parties
    During the planning process, you should consider both side’s needs and issues.  Otherwise, how can you determine if the final agreement is a good deal or bad deal?  List your own goals for the negotiation in rank order.  Go one step further by identifying those items of critical importance as well as those items that can be conceded during the negotiation if necessary.
     
    Hot Button Issues
    Average negotiators fail to consider the other side’s needs, issues, and "hot buttons.”  In the best case, prior meetings and history with the other person will allow you to anticipate correctly the other side’s wants and needs.  Knowledge is power!  Skilled negotiators ask more questions in order to identify the other side’s needs.  Educated guesses can be made to anticipate the other side’s priorities and allow you to respond effectively to those needs and potentially offer creative solutions.

    The Deal-Breakers
    A crucial point is to identify the critical needs of both sides.  Usually a few issues are the real deal-breakers, and will determine whether or not it even makes sense to reach an agreement.  These are the "must have” items. Pay attention to clues about the other person’s critical needs and issues.  For example: Does the other person repeat something? What questions does the other person ask you?  People tend to repeat something when it is important to them. Similarly, people tend to ask questions (for example: "how long is your warranty?”) if that particular issue is important to them.

    Learn more by visiting our Negotiating for Success Workshop page and Giving and Getting Concessions while Negotiating Sales Meeting Kit page.  We help clients prepare for upcoming negotiations with one-on-one coaching sessions.

     

  • The Three Most Common Mistakes Made in Sales Negotiations

    06/14/2013 in Sales Negotiation Skills

    The Three Most Common Mistakes Made in Sales Negotiations

    1. Conceding too much too soon
    2. Underestimating your power
    3. Responding poorly to adversarial tactics

    Average negotiators make these same mistakes repeatedly.  Successful negotiators are successful, in part because they have learned to eliminate these common mistakes.  You can improve your ability and the ability of your sales team by eliminating the common mistakes described below.

    Mistake #1: Conceding Too Much Too Soon

    The most common mistake made by average negotiators is to concede too much too soon.  If the customer says something like "your price is too high," the average salesperson will immediately make a price concession.  Instead, successful negotiators always try to:

    • Get something in return by using "if/then" language
    • Use a settlement range for maneuvering room.  Every negotiation involves one or more issues.  Successful negotiators plan a settlement range of acceptable outcomes for each issue
    • "Agonize" when appropriate
    • Concede an elegant currency rather than make a concession on price. An "elegant currency" is anything that has high value to the customer and is low cost to the seller.  Exploring for and exchanging elegant currencies increases the likelihood of reaching a win/win.

    Mistake #2: Underestimating Their Power

    Average negotiators underestimate their power.  Many people approach a negotiation believing that they are in a less powerful position than the other party.  Salespeople often feel that the customer holds all the power. 

    Actual power is difficult to assess, so most of us depend on our perception of power.  The following is a simple rule to use when considering the power in any given negotiation situation.  The Power of Alternatives:  Power in negotiating is a function of alternatives. The more alternatives you have, the more power you have.  To increase your power, be sure to identify your critical wants and needs, and then identify alternative ways that you can get those needs met if you don't reach an agreement with this customer.

    Mistake #3: Responding Poorly to Adversarial Tactics

    The most common way that average negotiators respond to adversarial tactics is fight or flight.  In other words, break it off or respond in kind.  Both of these responses will not result in win-win negotiations.  The best way to respond to adversarial tactics is counter-intuitive.  Successful negotiators have learned not to react, to stay calm and to disarm the other person, and to then use win/win tactics rather than adversarial tactics. 

    Learn more by visiting our Sales Negotiation Skills Workshop page and if you are a sales manager and would like help teaching negotiation skills to your sales team visit Giving and Getting Concessions when Negotiating Sales Meeting Kit.

     

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