Negotiations are not about selling. They are about reaching a mutually agreeable outcome. The only time there are winners are when both sides win.
The Difference Between Sales And Negotiation And Why It Matters
In the sales process, you are trying to identify the customer’s pain points and the solutions you have that case ease that pain. While part of the sales process, the negotiation can really only start when there is a genuine agreement from both parties. If they’re not sold that you can solve their problem, you certainly aren’t going to be bargaining from a position of strength.
In other words, once they’re sold on the product, that’s when you can get negotiations started.
Your sales discussions should start with the end game in mind. Throughout the sales process, you are consciously or unconsciously sending messages about how you’ll negotiate. If you’re always conceding points along the way, you’re setting the stage for a tough negotiation.
Advantages Of Negotiating Skills: Creating Additional Value
Too often price is used as the major negotiation point. This can be dangerous because it can position your product or service as a commodity to be awarded to the lowest bidder. In reality, nearly every negotiation includes issues besides price. You can improve your position by accurately pointing out other benefits of doing a deal and assigning value to them.
Avoid the tendency to run through a checklist of deal points and getting agreement on each one before moving to the next. By letting the other party know that everything is integrated, you establish value. If nothing is agreed to until there is total agreement, both sides are more likely to look for tradeoffs to get the final agreement. It’s a lot easier to give up small concessions if you know you need to do something to get to the end result.
The more you can learn about where the buyer assigns value, the better you can craft a negotiation that both sides can accept.
Developing Your Negotiation Strategy
It’s important that you know the parameters of your negotiation before you start. You need a clear understanding of what is non-negotiable, what is important, and what is unimportant in order to close a deal. Know your “walk away” number and where you can work with someone. It may help to create a list that ranks deal points in order of importance.
It starts with a positive idea and a firm belief that the product or service you have provides real value for the other party. Aim high but be realistic.
Using “Non-Positional Negotiation” Techniques
Positional Negotiation is a competitive and potentially contentious game. One party focused on getting the deal they want without any willingness to compromise or worry about the other party’s needs. You want to avoid these types of negotiations whenever possible. If you are forced to deal with someone that works this way, you have to make a decision early on whether you are willing to accept the consequences.
In almost every case, a Non-Positional Negotiation will yield better results and pave the way for a better relationship after the deal. Non-positional negotiating, also known as integrative or interest-based negotiations, attempts to find ways to satisfy the interests of the other party. While you still focus on limiting any concessions to things you can live with, you abandon a “win at all costs” mentality to build a plan that is beneficial and acceptable to both sides.
This means taking the time to understand the client’s position in order to create scenarios that work for both of you. For example, let’s say a potential customer has cash flow concerns. You might offer to extend credit or allow the customer to make progress payments rather than a lump sum up front. While you’d prefer to get paid up front, this may also help you hold firm on price.
How Negotiations Help (Or Hurt) Your Relationship
When you are negotiating a deal with someone, you are setting the stage for the relationship after the deal is done. All the traits you display in putting a deal together will colour the relationship that emerges. If you are honest, sincere, fair, and reasonable, you will build trust that can help in the future. Taking an adversarial, or a win-at-all-costs attitude may sacrifice potential future opportunities even if you still win the sale.
Your goal in negotiations should always be for both sides to have an opportunity to win. Without sacrificing important things, you want both parties to have a sense of satisfaction with the agreement.
Negotiating Strategy and Negotiating Skills Can Be Learned And Improved
For most people, key negotiating skills are not innate. They can be learned. Training and practice of the key negotiation skills you need should be part of your sales training. Our sales training program will explain negotiation skills, demonstrate the advantages of negotiation skills, and explore negotiation strategy. In addition, you will learn how you can negotiate on things besides price and understand how to create additional value. You will also have an opportunity to practice good negotiation skills.
Learning how to demonstrate negotiation skills can help you create better deals, make more sales, and build better relationships.