How To Avoid The most Costly Mistakes Most People Make When Negotiating -- Part 1

Without doubt, negotiation is the key thing that my sales training workshop attendees think that there is a 'black art' to. I am going to prove to you that there is no black art to negotiation - and in fact you can be a master at it.

There are 6 key principles that if you make them habits you will become a world class negotiator.



Key Negotiation Principle #1: Don't Negotiate Against Yourself



Without doubt the hardest person to negotiate against is ourselves. Yet this is the most common reason for cutting away at our profits. A great example happened to me recently.

I was making my final choice between two clothes wardrobes in a local shop. I could not make my mind up between the two as they both would have been perfect. I asked the owner of the small shop " So how much are they both again?" as I had forgotten how much they were. He replied "That one is £600 and that one is £750 but I can knock off £100 for you."

Without being asked, or without any reason, he had knocked off at least 15% of the price for no reason. I was desperate to get the wardrobes as there were none in our new house. The shop could deliver and assemble the next day and that was hugely valuable to me. It probably wouldn't have crossed my mind to ask for a discount.

So how do we stop this:

*Understand why people buy - I will look at this more in Principle 2
*Never offer price discounts before being asked

Be careful to understand what someone is saying i.e I went into a shop recently and said "yesterday I ordered a Tuna sandwich but you gave me a ham sandwich"
My motivation was nothing more than to ensure that days order was correct and possibly get an apology. The server responded by offering me that days sandwich free. I was grateful but the server was essentially negotiating against herself.

Also beware of the classic line:

"Is that your best price?" This line is taught to all new professional buyers as a standard line to test people with. Most people don't have a clue how to answer this (we teach how to in our sales training courses) and very quickly start chipping away at their own prices. Don't!! Never give into this line.



Key Negotiation Principle #2: Ask Questions To Identify their motivations

We get so used to our products and services and dealing with clients that we can very often think we know exactly what they want and exactly why they want it.

Stop. Never assume that you know what the customer or client is thinking or saying. Clarify what is important to them.

The more knowledge you have of the other persons situation then the better you will be able to prove the value of what you provide as well as deal with any negotiations or bargaining. Our courses are based on providing people with a platform of credible, professional questions that will ensure you find out peoples real motivations and the value they have assigned to your services.

A fantastic question to memorize that you can use if anyone asks for a discount is simply:

"Can I ask you why you need a discount?"

Generally that stumps people and when faced with having to rationalize their reasons they generally give up.



Key Negotiation Principle #3: Avoid easy alternatives such as the 50:50

Avoid the 50:50 split. It is far too easy and really shouldn't be classified as negotiating. If someone offers to do a 50:50 split with you (where you split the difference in prices down the middle) then here is a fantastic way to deal with this.

Purchaser: " I really like your car but think £10,000 is too much. You know I was thinking around £6,000 so why don't we split the difference."

You: " So If I understand you correctly you want to pay £8,000 for the car. Is that correct?"

Purchaser: "Yes. £8,000.

You. Fantastic. I think we are nearly there. So you are prepared to pay £8,000 and I want £10,000. Great. That means we are now only £2,000 apart. How about £9,000?

Purchaser. "Well hang on I was willing to pay £8,000"

You. "I know, but I was looking closer to £10,000. OK then you said split the difference so you are prepared to pay £8,000 and I want £10,000 so by splitting the difference we get to £9,000. Does that make sense?"

Purchaser. "Ah...Ok. Deal!"

Look out for Principle 4-6 in part 2!

To your sales success,

Peter

How To Avoid The most Costly Mistakes Most People Make When Negotiating -- Part 1 - To learn more about this author, visit Peter O'Donoghue's Website.

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