By Kim Dean
Mastering the negotiation process is an ongoing challenge for sales professionals. Is the negotiation process different from the sales process? Yes, selling is the act of providing value through goods, services, and information/insights to address a customer’s challenges and/or opportunities. Negotiating is the interaction that determines the terms of the transaction.
Essentially, selling creates value; negotiating gets paid for that value.
What are the obstacles that impede negotiation?
Start with a Strong Platform
In an ideal world, negotiation terms are fair and fruitful – and all parties emerge satisfied with the terms
Too often, though, the sales professional assumes the customer’s concerns and positions without truly exploring what the customer is thinking and trying to accomplish. Salespeople must remain open and listen to the initial feedback regarding the opening offer.To end well, the negotiation must begin on a positive note….creating value. A salesperson must have established that value and have aligned it to the needs of the customer.
How can both parties interests be served?
Avoid Playing Defense
A common tactical error is to begin the process in a responsive mode, waiting for a pricing challenge and then trying to justify value. This is playing defense. Instead, start strong with the opening terms and the rationale for those terms. Start from a position of strength.
If you open with a justified price and terms based on what you bring to the transaction, all changes should be a give and take. That is true trading. Concessions, on the other hand, are one-way gives and should be the path of last resort.
Andrea Moses put it well when she said, “When your customer says that your price is too high, he means that he does not appreciate the value of your product.” Make sure both sides are speaking the same language about the product before coming to any agreements.
Closing a deal for the sake of closing is not smart negotiating. It leads to difficulty in implementing the solution – as there is no meaningful basis for the terms. No deal is a legitimate close to a situation where the parties do not agree on value. Sometimes, the first step in achieving win-win negotiations is reaching a diplomatic – yet not consummated – close.
Some sales professionals choose to hedge their bets at the negotiating table, opting to keep something hidden as a form of insurance policy should negotiations go south. However, if your goal is to build trust and long-term business relationships, then the phrase “negotiating in good faith” must become a personal objective.
Professional credibility is earned, not purchased, and the easiest way to forfeit all hope of establishing credibility is to not play it straight. Negotiating can be done fairly and firmly without compromising one’s integrity, and will pay dividends with business partners who share a like-minded approach.
Prioritize Your Desired Outcomes
Not all terms are equal in value to both parties. The best trade is giving something of value to your customer that is not as costly as other options. Some trades are fixed costs to your organization and can be of great worth to the customer.
A large portion of successful negotiating can be attributed to deftly prioritizing one’s desired outcomes. While not everything on a given priority list may be attained in a negotiating session, working toward achieving the most important results should be the goal. Similarly, it is important for one side to recognize the opposition’s priorities to maintain fluidity and balance in negotiations.
If you realize both parties enter a negotiation with different and sometimes competing interests, a potential win-win can be found. Figure out quickly – before starting to trade – what their top priorities are versus their opening positions. Discuss openly so negotiating partners know the order of importance and are willing to dispense with secondary requests to reach a mutually acceptable position.
Everyone wants to emerge victorious from a negotiating session. Know what would truly constitute victory for your company. Realistically, this does not mean getting everything you propose. Long-term victories require both parties to win what they really need.
At Richardson, we help sales professionals master win-win negotiations and achieve great results for both sides of the conversation. Learn more about Richardson’s negotiation training program or follow us on Twitter.