If you’re involved with sales, how do you feel when you hear phrases like “Can you do something about your price?” or, “You’ll have to do better than that.” and variations of these? One cloud or two cross the sun? You start to think, “here we go again…” – however, have you prepared yourself for this situation?
As a buyer, do you push suppliers on price alone? Okay, it’s a fair tactic when so many sellers give in, but does it lead to long-term profit? What other ways could you get a better deal for your organization? Maybe extended credit terms or volume discounts?
Whichever side you’re on, what difference could 2% make to your company? Just to get another 2% off the sale price and/or 2% off your purchases? How much extra profit will this produce?
Developing your ability to negotiate more assertively and flexibly is not a contradiction in terms, it can be the foundation for increased business success and improved relationships as well. The simple definition of negotiations is: “To work or talk (with others) to achieve a transaction, arrangement, agreement. (from Latin negotiari – to do business with)”
There are usually four options for the outcome of a negotiation, and the desired one is “win-win”, unless you are only looking for a single deal and you may want to go “I win, you lose”. choice, though that’s not really necessary!
We can all improve as negotiators by following a few simple steps and treating situations as more than just negotiating fair. It will also help your cause if you see situations as something to be resolved and not a battle to be won! As with many things in life, the key to success is planning and preparation. This will affect your confidence and behavior when you are with the other party. The more prepared you are, the better chance you have of getting the deal you want.
One of the first things to consider in your planning stage is “the balance of power.” Imagine a set of scales and list the pressures or drivers facing each side:
I wonder what you find. Many similarities? When you recognize that both parties may be facing similar pressures, you can take heart! Another way to use this is to assess what factors the other party is up against, and you can reduce the ones on your side to increase the “leverage” you have.
To help you with planning and managing negotiations, you may find it helpful to work through the “AIMING HIGH” process.
AIM HIGH
HAS Assessment: consider the situation, balance of power, leverage. What it will take for a win/win outcome. What is the previous experience with this contact? How much does the deal need? How much do they need it? What could be the barriers? What do you have to offer that is unique?
me Interests: What are your needs, wants and desires? What are yours? Think about their interests, put yourself in their shoes, what they need, what are their drivers (business and personal).
METER take time: planning and preparation are key; make time for it. Do not rush, do not negotiate without (or without) preparation. Also, make time for the actual meetings; time pressure can be a problem in a negotiation; the part that feels the most pressure will often make the most important moves.
me nnovate: Remember, it’s not just “your” problem, if a genuine negotiation is to take place, it’s a joint negotiation! Think about, then reconsider, “the cake” and how it can be shaped and cut. Mira has different ways of approaching the situation.
NO Needs: What are your main needs, wants and goals? What are yours? Check again if your ideas can satisfy them, for both parties.
GRAM Generate Options: Assemble your pack, consider all the tradeable items, the ones you want and the ones you can give. The more options, the better. Whether you’re the buyer or the seller, think of the package in terms of more than just price.
H Human factors: even when it is more objective and professional, the negotiation is usually between two (or more) people. Your interpersonal skills count a lot: – how well you can evaluate others; what they want and are doing; your abilities to establish rapport and get them talking; good listening – and questioning. In addition, handling difficult situations and managing the dynamics of meetings is key.
me Integrity: Don’t get caught up in the game. Good negotiations will usually take place in the context of (or at the beginning of) an ongoing business relationship and partnership. It doesn’t matter what anyone else does: operate with integrity and be true to yourself and your values. You will get more good quality deals in the long run.
GRAM and before you give: Negotiate well – ask for what you want BEFORE you give!
H happy endings! Aim for a win/win, and if you can’t, leave the door open for another time!
By following this process, you will be well equipped to negotiate effectively. You will be more confident and successful if you spend time working on the package you are offering and at the same time thinking about what you want from the other party. Think about the things you can include in your package that you can use to “trade”. (Variable calls or currency or other terms to suit!) What might be the things the other party has that they would be happy to “trade” or move on with? The key to this is choosing things that are low cost to you, but valuable to the other party, and vice versa. Remember, in a negotiation, everything has a value, however insignificant it may seem at the time!
As part of this, plan out your “best deal,” meaning the ideal solution for you, and your “worst deal,” meaning the lowest position you’ll take. It is important that you are clear on this, and know when to back off! In your best offer, include as many variables as possible so that you have things to bargain with besides price. Think about what you will be willing to give and, more importantly, what you want to receive in return!
The actual focus of the meeting can be enhanced by following the principles of “Triangle Talk” from Kare Anderson’s book “Getting What You Want.” Be clear about what you want, what they want, and then keep your proposal in tune with what they can accept.
When you’ve gotten through the “propose” stage and into what many think is the actual negotiating or haggling stage, it’s important to remember one simple phrase and it’s all about “get” then “give.” “If you… then I…” Think about the impact of the opposite order, “If I… then you…?” What will an experienced negotiator do in response to that?
To help yourself with negotiations, practice! Look for opportunities in discreet situations and try ways to reach an agreement. Before you meet with that major customer or major supplier, as part of your preparation, take some time to go over your plan, your package and options, and then how the other party might proceed. Practice using the “get-give” business phrase and anticipate potential problems. You will be pleasantly surprised at the results you will get.
