Preparation is the only aspect of negotiations over which you have complete control. If you’re not prepared for a negotiation, you give the other side an unearned advantage.
When you plan, you develop a strategy showing how your solution impacts the customer’s business. Here are four tips for planning the negotiation:
- Prioritize your goals. You need to know what you must have, as opposed to what would be nice to have. The nice-to-have may be given up for obtaining the must-haves. Learn all you can about what customers need.
- View negotiating as a problem-solving process, exchanging ideas and information, and generating creative trade-offs and alternatives.
- Know your walk-away and alternatives. This gives you power in negotiations, because at some point you may be better off pursuing your alternative than settling for a sub-optimal agreement.
- Show that you want to negotiate. Look at your customer’s problems and try to make sure that your proposal effectively resolves some of their key issues.
When you rehearse the negotiation, you gain insight into the ways in which your negotiation strategy should be adjusted to have a positive effect. Here are a few guidelines to consider for your next rehearsal:
- Find someone in your organization to be a devil’s advocate by playing the role of your customer.
- Test your arguments. What data and proof of sources should you talk through with your “acto:” customer if you are questioned on the value of your solution.
- Be prepared to adjust your tactics. What response can you anticipate from your customer and how will you counter their behavior?
- Feel what it’s like to get up from the table and walk away from the negotiation. What will you do when your customer pushes too hard during the negotiation.
Here are tips that can help you conduct a successful negotiation:
- When customers realize that salespeople do what they say they’re going to do, they take them more seriously. Salespeople who keep their word in negotiations and never make promises they can’t keep are considered the best negotiators.
- Build trust and share information. People in negotiations often don’t trust the other side and believe that a strategy of sharing information may give away critical data that could reduce an advantage. If the goal is maximizing combined interests, sharing information is an ideal way to approach the task.
- Listen to what customers say with as few preconceived notions as possible. You’ll be surprised what you find out and how far these insights can take you in a negotiation. As situations change, negotiation strategies must also change. Negotiation isn’t a science or a war.
- Be patient. Don’t rush the negotiation. If you can stay flexible, you may end up with a better deal than you originally thought possible. If the customer takes a position with which you totally disagree, try not to argue. Always try to moves the discussion from price to value.
- Don’t negotiate through a negative filter. Sometimes, salespeople and customers are suspicious about what’s being said and skeptical of motives, feeling that someone’s trying to take advantage of them. So both parties may end up in disagreements, not necessarily over issues but over the manner in which the issues and positions are expressed.
- Don’t consider every customer demand crucial. Customers seldom expect to get everything they ask for. It pays to take the time to mutually explore alternative trade-off opportunities. Try to ask questions to find the information you need to create possible trade-offs.
- Recognize that egos are often the biggest barrier to a successful negotiation. Negotiation is a business process, not an ego game. It’s important for salespeople to manage their own egos and help customers manage theirs.
Source: Tannis Ashworth and Chris Mitchell, consultants with Holden Advisors, a consultancy specializing in negotiation training.