Whether we are working with prospects or long-standing customers, negotiation is a very real element of the buying process for many of us. Successful negotiation does not only mean meeting your clients in the middle between your price and theirs; it can involve creative thinking, addressing issues standing in their way, building a stronger relationship, etc… So, here are some key points to know to increase your chances of being successful in any negotiation.
Theory: The “Barter Story”
You own an apple orchard.
Your neighbor owns an orange grove.
You approach your neighbor to make a barter or trade … your apples for his oranges. In this scenario above Who is the buyer? Who is the seller?
The answer is … Neither. And as a result, neither has more leverage than the other, neither feel the pressure.
However, if one takes the same scenario but replaces his oranges for cash, suddenly, you are now the seller and he’s the buyer and much of the leverage moves over to him. Why is that? Is it not just a barter still? Aren’t you trading your apples for his cash in an equitable manner?
Think of the act of selling like the act of making a ‘trade’ or ‘barter’. This will impact your attitude right from the get-go. To successfully start negotiating, think of your discussion like two people coming together each wanting to make a trade.
A “formal” negotiation at the “11th hour” may be too late because their perception of your offering is likely already set.
- Only once you’ve taken time to understand both yours and their underlying
interests can you begin your negotiation (don’t start negotiating until you have
finalized the solution – not before) and have all the information to be creative
- Understand who your competitors are & what they are offering as compared to your
solution. Determine the pros & cons and use that information to focus on the
value you bring.
- Make sure your solution & the difference it brings is valued by the customer. If
your strength is quick delivery for example, but your audience does not value
that, you have little to negotiate with.
- A negotiation should only start if both parties come to the table wanting to
make a deal. If one party is not committed to getting a deal done, they have the
leverage as they have less at stake. So, if you are not sure if your customer
truly wants to get a deal done, it may be better to walk away.
- It’s a good idea to create a deadline – that’s when concessions usually occur.
- Sometimes, especially on deals with very long sales cycles, you may feel too
close to those you are negotiating with OR over-committed to get a deal done. In
those instances, it may be best to bring in a teammate (often your boss).
- True leverage comes to those who are truly prepared to walk away. This is easy
to say but tough to do.
- Know who you are negotiating with. Who are they? What do they value? How do they
tick? Like in Poker, who you are playing against will impact the moves you make.
- Trust is the cornerstone behind a successful negotiation. Don’t bother entering
into a negotiation until that has been firmly established. Lack of trust causes
suspicion & concern which derails the process.
- If there’s one key thing to do or think about when negotiating, it is to take
the time to get into the shoes of whom you are negotiating with. You need to
have empathy on all levels.
- Everybody always thinks they are reasonable. Perception, perception, perception
= reality, reality, reality. Get into their head.
- It’s never a good idea to lie. It’s never worth losing credibility. You can’t
negotiate effectively without credibility.
- Usually the person across the table has more to lose than you think. (People
almost always underestimate this and think they have the least leverage)
- Humility is critical. Style and demeanor can be as important as substance.
People like regular people. Always discuss commonalities first. This builds
investment in the process.
- Theatrics are important.
Make people work for your concessions.
- It’s more important to find a way to
like the person you are dealing with than for them to like you. It’s believed
that people want to agree with those they know like them.