Dont NOgotiate Negotiate Master the science of good negotiating
Dont NOgotiate Negotiate Master the science of good negotiating
First, let’s review the negative side of negotiating by discussing a typical scenario.
You’re trying to close the sale when the customer makes a demand that you cannot authorize. So you run to your manager for approval. With much prodding and begging, the manager approves the demand but only begrudgingly. Unfortunately, this often results in a dissatisfied customer because your company, or your manager, never really wanted to grant the demand to begin with, so the customer never really gets his demand.
One of the causes for these last minute demands is when the sales rep starts to make last minute concessions such as, “If you buy now we can be more flexible with your terms,” or some other act of desperation, like throwing in a last minute discount. When you do this, you are asking for last minute demands by the prospect because they see an opportunity to negotiate. They think, “Hmmm… If he’s willing to do that, then I can probably get him to do even more.”
This can also harm your credibility because the prospect thinks, “Why didn’t you offer your best terms to begin with?” Sales reps do this because they are either lacking confidence in the sale, which is symptomatic of not having a good sales process, or they are desperate to make a sale, which also yields negative results.
A negative side effect of discounting or making concessions or just caving in is that it quickly becomes common knowledge. Not only will your customer forever expect discounts and concessions from you because you set a precedence, but everyone your customer talks to and refers to you will know your weak points. As a result, they will ask you for the same discounts and concessions, and they’ll expect them or maybe even more. So, whatever you do for one, you can expect to do for everyone.
The best way to increase your revenue, and your commissions, is to stop discounting. When you sell Value instead of features or pricing, then you’ll be able to take the discount out of the equation. Selling value is a topic for another article on handling objections.
When negotiating, both parties must come out as winners, a win-win scenario. If either party loses, then that’s a bad negotiation. The way to achieve a win-win negotiation is to establish what’s called Negotiating Power. Now, the word “power” is not used here in the negative, manipulative sense. It means having the knowledge to control the process and therefore the negotiations so that both parties win. Negotiating Power is built up during your various meetings and discussions with the prospect that have led up to the close. It’s comprised of the knowledge, understanding and credibility that’s been accumulated and created during these discussions.
You then apply this power to help meet the customer’s needs. But, you must be at the win-win level for this to work successfully. Otherwise, this power will be used to abuse or manipulate the prospect, which you should never do.
There are several aspects to developing your Negotiating Power that will help you become more successful.
First is Uniqueness. You establish your product and company as being different from your competitors’ offerings. Your prospect will then see you as a valued and unique resource, or business partner, which will give you more power to negotiate.
Next is Strength. You will need to demonstrate your product or company’s strengths. Having strong product knowledge can even allow you to work around any weaknesses your product may have.
The Scope of what you do also helps build your Negotiating Power. By seeing beyond the obvious and coming up with creative solutions, and having multiple contacts within your prospect’s business, and even providing additional knowledge about your client’s needs, you will increase the scope of your role as a sales rep and enforce your position as a business partner, thus increasing your Negotiating Power. So think outside of the box.
Understanding is another way to help increase your Negotiating Power. Help your customer to fully understand and visualize their solution.
Finally, the Relationship is a key component to increasing your Negotiating Power. This is more than just establishing rapport. It’s about building a lasting relationship. It includes having a mutual respect and understanding for each other.
Naturally, there are many mistakes that can be made during the negotiations that should be avoided, including:
· Losing site of the win-win goal
· Talking too much
· Being unprepared
· Being impatient
· Arguing with the prospect
You should always focus on developing your negotiating power in the positive ways mentioned here and avoid these mistakes at all costs.
Now that we covered the best ways to negotiate, the next step is to learn how to handle objections. If you follow this advice and successfully negotiate with your prospect, then you are likely to get fewer objections. Nevertheless, you may still get objections about your product or company, and there are specific techniques you can use to handle these objections. But, that’s the topic of another article. So remember to practice your Negotiating skills and always focus on the win-win.
Good Luck & Good Selling!
Russ Lombardo
Dont NOgotiate Negotiate Master the science of good negotiating - To learn more about this author, visit Russ Lombardo's Website.
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Closing a sale doesn’t always happen as easy as we hope. It’s great when it does, but there are times when the prospect wants to negotiate. Sometimes, they need to negotiate because they have a true requirement that still needs to be addressed. Other times the prospect just wants to feel like they won something and negotiate just for the sport because it feels good when they win. Whatever the reason, there are ways to handle a negotiation that lets everyone win.
First, let’s review the negative side of negotiating by discussing a typical scenario.
You’re trying to close the sale when the customer makes a demand that you cannot authorize. So you run to your manager for approval. With much prodding and begging, the manager approves the demand but only begrudgingly. Unfortunately, this often results in a dissatisfied customer because your company, or your manager, never really wanted to grant the demand to begin with, so the customer never really gets his demand.
One of the causes for these last minute demands is when the sales rep starts to make last minute concessions such as, “If you buy now we can be more flexible with your terms,” or some other act of desperation, like throwing in a last minute discount. When you do this, you are asking for last minute demands by the prospect because they see an opportunity to negotiate. They think, “Hmmm… If he’s willing to do that, then I can probably get him to do even more.”
This can also harm your credibility because the prospect thinks, “Why didn’t you offer your best terms to begin with?” Sales reps do this because they are either lacking confidence in the sale, which is symptomatic of not having a good sales process, or they are desperate to make a sale, which also yields negative results.
A negative side effect of discounting or making concessions or just caving in is that it quickly becomes common knowledge. Not only will your customer forever expect discounts and concessions from you because you set a precedence, but everyone your customer talks to and refers to you will know your weak points. As a result, they will ask you for the same discounts and concessions, and they’ll expect them or maybe even more. So, whatever you do for one, you can expect to do for everyone.
The best way to increase your revenue, and your commissions, is to stop discounting. When you sell Value instead of features or pricing, then you’ll be able to take the discount out of the equation. Selling value is a topic for another article on handling objections.
When negotiating, both parties must come out as winners, a win-win scenario. If either party loses, then that’s a bad negotiation. The way to achieve a win-win negotiation is to establish what’s called Negotiating Power. Now, the word “power” is not used here in the negative, manipulative sense. It means having the knowledge to control the process and therefore the negotiations so that both parties win. Negotiating Power is built up during your various meetings and discussions with the prospect that have led up to the close. It’s comprised of the knowledge, understanding and credibility that’s been accumulated and created during these discussions.
You then apply this power to help meet the customer’s needs. But, you must be at the win-win level for this to work successfully. Otherwise, this power will be used to abuse or manipulate the prospect, which you should never do.
There are several aspects to developing your Negotiating Power that will help you become more successful.
First is Uniqueness. You establish your product and company as being different from your competitors’ offerings. Your prospect will then see you as a valued and unique resource, or business partner, which will give you more power to negotiate.
Next is Strength. You will need to demonstrate your product or company’s strengths. Having strong product knowledge can even allow you to work around any weaknesses your product may have.
The Scope of what you do also helps build your Negotiating Power. By seeing beyond the obvious and coming up with creative solutions, and having multiple contacts within your prospect’s business, and even providing additional knowledge about your client’s needs, you will increase the scope of your role as a sales rep and enforce your position as a business partner, thus increasing your Negotiating Power. So think outside of the box.
Understanding is another way to help increase your Negotiating Power. Help your customer to fully understand and visualize their solution.
Finally, the Relationship is a key component to increasing your Negotiating Power. This is more than just establishing rapport. It’s about building a lasting relationship. It includes having a mutual respect and understanding for each other.
Naturally, there are many mistakes that can be made during the negotiations that should be avoided, including:
· Losing site of the win-win goal
· Talking too much
· Being unprepared
· Being impatient
· Arguing with the prospect
You should always focus on developing your negotiating power in the positive ways mentioned here and avoid these mistakes at all costs.
Now that we covered the best ways to negotiate, the next step is to learn how to handle objections. If you follow this advice and successfully negotiate with your prospect, then you are likely to get fewer objections. Nevertheless, you may still get objections about your product or company, and there are specific techniques you can use to handle these objections. But, that’s the topic of another article. So remember to practice your Negotiating skills and always focus on the win-win.
Good Luck & Good Selling!
Russ Lombardo
Dont NOgotiate Negotiate Master the science of good negotiating - To learn more about this author, visit Russ Lombardo's Website.
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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