| Preparation
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….and never stop! 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. Giving concessions 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 here. 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 today with Engage's online newsletter and a FREE 7 day intensive sales video eCourse.
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