Equals Negotiation Success
Colleen Francis on Negotiating
Going into a negotiation can sometimes feel like entering a battlefield.
Great negotiators know that it pays to come to the table well prepared.
Here are nine areas you need to address to be successful.
Mediocre salespeople are notoriously bad planners. It can be said
that they habitually "play" more than they "practice."
They go into most sales interactions unprepared, thinking they can
"wing it" and negotiate "off the cuff." Top negotiators
know differently. Top performers know that in order to successfully
negotiate with clients they must plan carefully or risk being left
vulnerable. Without proper strategy, your opponents will use your
lack of preparedness to their advantage. In other words, you are likely
to give up more than you intended because you didn't have a plan.
Here are nine areas of planning to consider before you start a negotiation
with a client:
Determine your goals
Negotiation is the art and science of reaching an agreement that meets
your and your client's goals. Your strategic goals create the measure
you judge yourself by at the end of the process and need to be set
before the negotiation begins. Your goals also will act as your guide
during the negotiation, supporting everything you say, every move
you make and every agreement you reach. Carefully planning your strategy
in advance will ensure you reach the goals that you and your company
want to achieve. Remember that all goals should be set using the S.M.A.R.T.
formula (Specific, Measurable, Attainable, Realistic and Time bound).
What's your BATNA?
What will happen if you do not reach an agreement with your client?
One of the biggest negotiating dangers is being too committed to gaining
an agreement and being unduly pessimistic about what would happen
if the negotiation fails. In my experience, most salespeople are overly
committed to having to reach an agreement (sometimes at the expense
of all profitability) when they have no other options. Do yourself
a favor. Ensure you have at least three opportunities waiting to close
(or negotiate) for every one that you are negotiating now. These three
other qualified opportunities are your Best Alternative to a Negotiated
Agreement (BATNA) because they ensure you will never feel desperate
to close business.
The willingness to walk away is the most powerful negotiation leverage
you can have. You only will feel able to walk away, if you have something
else to walk away to. Yes, you understand me correctly; prospecting
is the key to negotiation success.
What is your position?
Specific goals for your negotiation can be called positions. Positions
are simply your statement of what you need to get in order to accept
the deal. You should take some time before the negotiation to document
what you want to get, need to get and what would be nice to get out
of the interaction. Writing down these positions will make them clear
in your mind and will help you focus the discussion. While you are
at it, it is good practice to guess at what the client will want and
intend to get as well.
Hide and seek
As well as positions, we all have other things we want to hide from
(or avoid) and seek in the negotiation. Often, these are more hidden
or more political things. For example, your client may want to save
face and you want to augment your reputation. You may want to avoid
exposing conflict inside your own company and the client may want
to avoid including certain colleagues in the process. During your
preparation it's valuable to ask yourself what you and the client
seek, and want to avoid.
Find the missing link
So, you know your goals and positions, and you have taken a smart
guess at your client's goals and positions. Now is the time to find
the link between the two. Linking your goals to your customer's goals
is a key to effective selling. A negotiated agreement is only profitable
if it satisfies all parties. The best way to accomplish this mutually
profitable relationship is to focus on finding the missing link between
your objectives and your client's. Of course it is difficult to do
this accurately if you don't know what your client's goals are. Think
of this as a sales challenge: the better qualified your client is,
the more you know about them and understand their goals and the better
prepared you will be for the negotiation. Great negotiators start
preparing for the negotiation at the start of the sales cycle
What's your bottom line?
Your bottom line is the absolute, last resort and final offer on each
key issue. It's your walk away point. Setting a bottom line in advance
of your negotiation is important because it makes it easier to resist
the temptation of agreeing to an unprofitable deal. Setting a bottom
line protects you from seller's remorse and it makes it easier for
others to participate in the negotiation with you because you've provided
a framework for them to negotiate in. There are some downsides though.
The most notable is that having a bottom line can discourage creativity
and may limit your ability to capitalize on new information revealed
during the negotiation. Be careful not to set your bottom line too
high. It's easy to over estimate the value of what you are selling,
especially if it is personal.
Identify your trip wire
The best negotiators set a trip wire for every negotiation which will
indicate to them when they are close to their bottom line. Your trip
line is established to ensure you do not enter into agreements that
you will later regret. Establish a trip wire by identifying an outcome
that is slightly better than your BATNA and bottom line, but far from
perfect. When a trip wire is triggered during a negotiation, commit
to taking a break and thinking about the situation before accepting
the deal. The last thing you want is to be forced into taking a deal
that is worse than your trip wire. As a last resort, accept your trip
wire and an acceptable end to the negotiation, ONLY if you are able
to receive something in return.
Where are you weak?
No one likes to admit they are not perfect, especially salespeople!
The truth is, no negotiation argument is perfect and yours is no exception.
Everyone and every negotiation argument has at least one vulnerability.
Your weakness is that spot that threatens the achievement of any one
of your goals based on a real or perceived vulnerability in your argument.
Don't ignore or brush off a perception. Your client's perception of
you is the reality in which you negotiate. When planning for a negotiation
it's wise to consider your weaknesses and plan for effective responses.
The first concessions you give always need to be "non-monetary,"
in other words, something that does not sacrifice the price of the
product. If the client will not accept a non-monetary concession,
then it may be necessary to give a price break (monetary concession).
For your point of reference, a concession is the act of granting,
yielding or surrendering a right, privilege or gift. Your treatment
of concessions will determine your success or failure in a negotiation
and long term relationship building. Always remember the cardinal
rule: no free gifts! For a worksheet to help you plan your monetary
and non monetary concessions click
Sure, it may seem daunting to prepare for a negotiation. That is because
often salespeople don't like the thought of getting to work! According
to CSO Insights, just 10 minutes of prep can increase your effectiveness
by up to 42%. Knowing that, doesn't it make sense to spend a little
time thinking and planning before your next negotiation rather than
simply jumping in unprepared?
Colleen Francis, Sales Expert, is Founder and President of Engage
Selling Solutions. Armed with skills developed from years of experience,
Colleen helps clients realize immediate results, achieve lasting success
and permanently raise their bottom line. Start improving your results
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