Negotiation demystified
Negotiation happens when the Buyer’s need to buy meets the Seller’s need to sell. Negotiation evokes fear when it is wrongly equated with bargaining, which is just one component of negotiation. When a salesperson is unable to convincingly demonstrate value, the Customer straightaway gets into bargaining on price and terms
Four step Formula to Successful Negotiation
1. Preparing
Three critical elements – Home work prior to negotiation is critical. This should be around three critical elements of a sale:
(i) Customer – Things to know about our customer must include: What is the problem the Customer is trying to solve? Who takes decisions? Who influences decisions? Who can stop decisions? Who can postpone decisions? Do we know all these stakeholders? Do we understand & manage their expectations and perceptions right
(ii) Competition – Who are they? What is their current situation? What has been their behavior? How will our offer compare with theirs
(iii) Our offer – What are our priorities? How important is the deal/client to us? What are the long term implications? Most importantly what will be our Walk Away? Preparation should include a set of non-negotiable thresholds. You must be willing to walk away if those are not met. Walk away, however, does not mean a sullen withdrawal. Nor is it an admission of defeat. It is a tactical retreat to avoid a loss making deal.
2. Discussing – This would mean exploring positions and interests both ours and the Customer’s
3. Proposing alternatives – In this phase we propose alternatives. But no commitments are offered
4. Bargaining – To reach an agreement, we should know how much we can afford to give away. Bargaining covers a whole range of issues such as terms and conditions, after sales service, warranty, training, annual maintenance and not just the price. You should have a range within which negotiation is feasible for each of these issues.
Find out more about Successful Negotiation
Interested? Contact us to learn more or to receive our Negotiation whitepaper.
