Jonathan Farrington's Blog

Our style of negotiation will be influenced by the style of the other party. If both sides are adversarial; there will be little trust between the two parties, however, if one side decides to be co-operative, there is a danger the other side will use this apparent sign of weakness to their advantage.

Co-operative bargaining has the advantage of being a more efficient style of negotiation, however certain rules have to be followed by both parties for it to work.

Let us look at the two styles of bargaining and their features:

Features Of Adversarial Bargaining:

• Each side takes up a position and defends it.

• Opening bids are set at unrealistic levels; too high or too low, in order to give room for manoeuvre.

• Movement is small or non-existent until later on in the negotiation.

• Tactics are used to gain short term advantage.

• Too much emphasis is placed on trust. .This really is my best price!

• Information is withheld, or misrepresented.

• The outcome is often “win-lose”, or “lose-lose”.

• The more aggressive negotiator usually does best.

• This style does not encourage long term, mutually beneficial relationships.

• Neither side asks enough questions, or explores alternatives in sufficient depth.

Features Of Co-Operative Bargaining:

• Each side recognizes that the other has needs and feelings and accepts implicit rules.

• Objective measures are taken of what is fair and reasonable.

• Trust is not an issue as either side is willing to share information.

• This style is friendly, but not soft. There is a willingness to trade concessions.

• There is a clear, communicable strategy.

• Bad behavior is punished.

• This style involves creative problem solving.

• It encourages long term, mutually profitable relationships.

• Each side asks more questions and explores alternatives, rather than taking up fixed positions.

 The usual outcome is “win-win”.

Today’s News: “Selling Through The Slump” is clearly the hot topic right now, for all the reasons we understand – and you will know that I have very strong opinions about the causes: But this is not a time for additional recrimination; it is a time to collaborate, co-operate, and work through it together.

Last week I co-presented with Jill Konrath and Kendra Lee for Landslide Technologies – if you missed it, you can still download it here - and last night, I listened in to The Customer Collective’s gig.

On December 9th, the Top Sales Experts  launch our inaugral “TSE Roundtable.”  

Presenters include: Leslie Buterin, Colleen Francis, Jill Konrath, Paul McCord, Keith Rosen and me – hosted by Maureen Blandford.

I think it is quite probably going to be THE definitive event on the subject so far.

It’s FREE to register, and everyone will receive a very special ebook: “Selling Successfully In A Downturn Economy” with contributions from all of us.

Registration will be limited to the first 1000 applicants, and we will open the doors for booking on December 2nd at 6pm GMT (12 noon Eastern)

More details, very soon.

Tomorrow: It’s that time of the week again – JF Uncut – for me it’s cathartic; for some, it’s time to be amused; for others, it’s time to be enlightened – whatever, just join me.

Find out how you can bring a kilo or two of heroin, some semtex, a few hand-grenades, some chemical weapons, in fact anything you like into the UK or Northern Europe, completely undetected.

No clandestine locations – simply sail pass Customs Officers, without challenge.

I’ll give you the complete lowdown – prepare to be amazed.

Ever since 9/11, and for a long time before this, the UK has been hopelessly exposed.

Negligence just does not describe it, and I am going to be very interested to see how the British government are going to explain this one away. 

Yep, it’s an exclusive! “The Gaping Hole In Britain’s Defences”

People who are successful negotiators, always have a well thought out strategy before entering into the negotiation; are well prepared; self confident and structure the negotiation, so that they remain in control of the negotiating process.

The recommended structure for negotiations is:

• Establish the issues being negotiated
• Gather information
• Build a solution

Stage 1. Establish The Issues

Begin by agreeing an agenda for the negotiation i.e.
 
• What needs to be discussed and agreed?
• Who will be involved and what will be their role?
• What timescales are we working towards?
• What are the major issues that need to be agreed?

Many negotiators make the mistake of negotiating too quickly whereas skilled negotiators spend 20% more of their time asking questions and looking for alternatives.
 
Do be aware that professional buyers will want to gain your commitment on issues, such as: price, early on in the negotiation but you should never commit yourself to anything until you have established everything that is being negotiated.
 
Seasoned negotiators will often bring up an issue at the end of the negotiation, when you are vulnerable and likely to agree to a one sided (Lose-Win) concession, in order to conclude the deal. You can legislate for this ploy by asking the other side for their “shopping list”  before beginning the negotiation and refuse to accept any last minute additions to the list.

Issues will include things like price, delivery schedule, payment terms, packaging, quality of product, length of contract etc. At this stage issues are kept general and no concessions are made or agreements reached

Stage 2. Gather Information

This is a vital part of the negotiation and you need to remember that there are four kinds of information

• Information you have that you are willing to give to the other side
• Information you have that you are unwilling to give to the other side
• Information the other side has that they are willing to give you
• Information the other side has that they are unwilling to give you

You need to decide, before the negotiation, how much you are willing to share information and what your own information requirements are. This will set the climate for the negotiation and will determine the amount of trust that exists between both parties. Skilled negotiators are able to ask a range of open, closed and follow up questions and are able to listen effectively. They also wait until they have all their information requirements, before making concessions

Stage 3. Build A Solution

Having gathered information the next stage is to begin to put together a solution.  Usually this will take the form of the selling side putting forward a proposal, or opening bid. The opening bid should be ambitious, but defensible. You should always challenge an opening bid and refuse to let an unacceptable bid stay on the table.
 
Typically, there will then be a process of bargaining, concessions will be traded and movement take place, until, hopefully, agreement is reached. Concessions should not be given away for free and you should be wary about conceding on issues for which you are not prepared.

A final tip: The very best negotiators always enter into negotiation with a “three position plan”

That is: Best price, realistic price and fallback price – they never, ever accept less than their “Fallback price”

If you are serious about improving your negotiation skills, you will find some helpful additional reading here

Today’s News: Over at Top 10 Sales Articles, we have just posted the Top Sales Article Of The Month for October and I know you will enjoy it very much: That means that we only have two more monthly winners to find and we will then have our twelve finalists, who will battle it out for the Top Sales Article Of The Year award on New Years Eve.

The finalists so far are: Paul Cherry, Josiane Feigon, Ivan Misner, Mike Brooks, Mark Satterfield, Zig Ziglar, Kevin Eikenberry, Jill Konrath, Paul McCord and this month’s winner – so a pretty heavyweight group.

I will also be handing out The JF Awards again this year to worthy article communities and I will announce the finalists on Tuesday December 16th and then the winners, seven days later.

Tomorrow: My guest on the JF Guest Author Spot is fellow Top Sales Expert, Dr. Tony Alessandra
 

One of the main differences between negotiators is how confident they feel when negotiating. Typically, the more confident we feel, and the better we are prepared, the more successful will be the outcome of our negotiations.

Personal power comes from many sources. To build up and increase our confidence as negotiators we need to step back and analyse the sources of our personal power and compare them with those of the people with whom we are negotiating.

Power is not absolute. In most negotiating relationships the power balance moves with time as the negotiation progresses.

Here are just a few examples of sources of power:

Information Power:

Information power comes from having knowledge that will influence the outcome of the negotiation. Planning and research can increase our information power, as can asking the right questions before we reach the bargaining phase of the negotiation.

Reward Power:

Reward power comes from having the ability to reward the other party in the negotiation. It could be the power a buyer has to place an order for goods and services or the power a salesperson has to give good service and solve problems

Coercive Power:

Coercive power is the power to punish. This is seen most commonly in the buyer-seller relationship, but can be a feature of other types of negotiation.

Situation Power:

Situation power is the power that comes from being in the right place at the right time. A customer is desperate to place an order and you are the only source of supply in the short term. Having an effective network and keeping in touch with what is happening can increase your situation power.

Expertise Power:

Expertise power comes from having a particular skill which you can apply and which can influence the outcome of the negotiation. Improving negotiation skills helps you win better deals. Other areas of expertise could also help the outcome of the negotiation.

And Finally – Referent Power:

Referent power comes from being consistent over time. If people see you as having a clear, consistent strategy as a negotiator, you will increase your referent power.

Having standards that you stick to and being consistent will help to increase your referent power. In the eighties, Margaret Thatcher wasn’t universally popular, but was respected by many for being consistent in her views and behaviour. In the end she failed because her approach was too rigid and she was unable to adapt to changing circumstances.

You will find a number of other articles on negotiation here

Today’s News: Amazingly, Business Expert Webinars has just delivered it’s 100th session - incredible how time flies. This is the message I received from CEO, Lee Saltz.

Business Expert Webinars Delivers its 100th Business eLearning Training Session!
October 28, 2008, Minneapolis, MN – Business Expert Webinars (BEW), the leading provider of business eLearning, achieved a major milestone today when they delivered their 100th for-fee webinar.

“I am proud of this significant BEW accomplishment. I’m not aware of any other program that has
delivered 100 for-fee webinars in this short period of time. BEW has clearly demonstrated that people are willing to invest in business eLearning as a way to enhance the skill development of themselves and their employees. As the economy has tightened, companies and business professionals have been forced to find alternative strategies for skill development. BEW offers an affordable way to increase business aptitude on a limited budget,” said Lee B. Salz, President and CEO of Business Expert Webinars.

“The BEW platform is incredible,” says Jeb Blount, BEW speaker and CEO of SalesGravy.com. “It has provided professional business speakers with a venue to reach a global audience. Participants learn relevant information that they can immediately use in their business career.”

Business Expert Webinars began delivering for-fee webinars in May 2008 and has built a portfolio of over 150 business speakers, with a schedule of over 750 live business eLearning seminars on a wide array of subjects. “What makes BEW unique is that our speakers are not using these sessions as marketing events, but are using the technology to deliver their teachings to audiences around the world. Not only are BEW’s participants worldwide, but so are the speakers. We have speakers in Canada, France, Australia, Egypt, and the U.K. Our mission is to deliver high-quality, business education in a cost effective environment.” said Salz.

“As a result of delivering business eLearning sessions with Business Expert Webinars, I’ve been able to provide business professionals with new ways to affordably benefit from my services,” says Leslie Buterin, BEW speaker and founder of ColdCallingNetNews.com. “With training budgets being squeezed, BEW offers a means to develop teams without breaking the bank.”

About Business Expert Webinars
Business Expert Webinars (BEW) is the leading provider of business eLearning. BEW has an
international community of business speakers that comprises best-selling authors, award-winning
speakers, and business gurus delivering training for business professionals. For more information, visit
BusinessExpertWebinars.com.

Upcoming Event: On November 12th, Jill Konrath, Kendra Lee and I are presenting an open workshop, hosted by Landslide Technologies – it’s FREE, and I feel certain you will not want to miss it – just click on the banner at the bottom of this post, for full details.

Tomorrow: On The JF Guest Spot I am delighted to welcome back Kevin Dwyer, the second internationally acclaimed leadership guru to appear this week.

As well as being a great friend, Kevin is one of the wisest men I know and I have never held it against him for being Australian!

The closing stages of any negotiation are vital to the overall success of the final deal. There will come a time when both parties can sense an outcome is possible, and each negotiator needs to be careful not to be too eager to close or else the other party will be tempted to hold back for further concessions.

Once a likely outcome is seen, either party may define outstanding issues, compare arguments and objections, review the position to date and agree a deadline for agreement. If one side avoids making these decisions, the other must probe to find out the reason and deal with it effectively. Negotiators must be careful at this stage to identify tactical delay which deliberately attempts to force further concessions.

The best solution to aim for always, is one where both parties feel they have done well despite having to concede on certain issues. This is called a “win-win” solution. Once either side feels they have arrived at the final deal, it is important to signal this to the other party.

Body language can say as much about what you are thinking as speech. If you have made your final offer, look as if it is your final offer. Simply gathering up your papers, looking at the other side directly in the eye and saying “That is my final offer”, can do this, and silence can be a powerful tool in convincing them you mean what you say.

Be wary of “splitting the difference”: If you offer to split the difference, you have, in effect, given the other side a concession that is one-sided. You have said you are prepared to move without asking for commitment in return.

The final consideration is when you have done the deal and both parties are in agreement. Record the details and agree with the other parties involved that your interpretation of events matches theirs. That way there will be no unexpected comeback in the inevitable post-negotiation period when either side reviews how well or badly he has done. Again, this will be minimised if the solution you have
arrived at benefits both parties.

A Final Word Of Caution:

The closing stages need to be approached with caution. It has been shown that the majority of concessions are given or traded in the last 5% of the time allocated for negotiation. That means if you negotiate for one hour, the last three minutes are when you are most vulnerable.

You may also enjoy reading: “How To Structure A Negotiation” or you can do even better than that – if you sign up for the FREE JF Journal, you can download my E-book, “Negotiating To Win” with my compliments – sign up here

Today’s News: Yesterday I promised to compensate you for providing no news, so here we go: First up, a great post by Dave Stein – “Would You Pay To Read A Blog?”

Then we have the delightful Ardath Albee with “The Beauty Of Niche” and finally Mark Cook gives us “Coach Like A Professional…”

I expected visitor numbers to dip in July, just as they have done for the past two years, but amazingly, we have just recorded record numbers for all our ventures – so thankyou!! We really appreciate your support

Tomorrow: As I am still in the UK, I will be meeting up with two of my children and enjoying the weather. Have a great w/e wherever you are, and be sure to make it back here next week - JF

Our style of negotiation will be influenced by the style of the other party. If both sides are adversarial there will be little trust between the two parties, however, if one side decides to be co-operative, there is a danger the other side will use this apparent sign of weakness to their advantage.

Co-operative bargaining has the advantage of being a more efficient style of negotiation; however certain rules have to be followed by both parties for it to work. Let us look at the two styles of bargaining and their features:

Features Of Adversarial Bargaining:
• Each side takes up a position and defends it.
• Opening bids are set at unrealistic levels; too high or too low, in order to give
room for manoeuvre.
• Movement is small or non-existent until later on in the negotiation.
• Tactics are used to gain short term advantage.
• Too much emphasis is placed on trust. .This really is my best price!
• Information is withheld, or misrepresented.
• The outcome is often “win-lose”, or “lose-lose”.
• The more aggressive negotiator usually does best.
• This style does not encourage long term, mutually beneficial relationships.
• Neither side asks enough questions, or explores alternatives in sufficient depth.

Features Of Co-Operative Bargaining:
• Each side recognises that the other has needs and feelings and accepts implicit
rules.
• Objective measures are taken of what is fair and reasonable.
• Trust is not an issue as either side is willing to share information.
• This style is friendly, but not soft. There is a willingness to trade concessions.
• There is a clear, communicable strategy.
• Bad behaviour is punished.
• This style involves creative problem solving.
• It encourages long term, mutually profitable relationships.
• Each side asks more questions and explores alternatives, rather than taking up
fixed positions.
• The usual outcome is “win-win”.

Today’s News: Taking my weekly stroll over to Salesopedia, I discovered some excellent articles on the topic of “Sales Marketing” – “In this week’s issue we look at growing your business and sales marketing. Does branding yourself matter more than your product?” and you can read them all here 

Tomorrow: Kelley Robertson, fellow Top Sales Expert and all round good egg, makes a welcome return to the JF Guest Author Spot

The early phases of negotiation consist of both sides finding out more information before talking about a specific deal or set of alternatives. For example, if you find out the other side has a time deadline that only your company can meet, it may give you the chance to negotiate a more favourable price. If you know that the other side has recently expanded their production capacity, you may be able to negotiate more favourable terms in return for a commitment to buy certain volumes over an agreed time period.

By spending time as part of your preparation in listing what you already know and what you need to know, you will give yourself a better chance to negotiate well on your company’s behalf.

Concessions :
Negotiation is a process of bargaining by which agreement is reached between two or more parties. It is rare in negotiation for agreement to be reached immediately or for each side to have identical objectives. More often than not, agreements have to be worked out where concessions are given and received and this is the area where the profitability of the final outcome will be decided.

When preparing for negotiation, it is advisable to write down a realistic assessment of how you perceive the final outcome. Find out the limits of your authority within the negotiation and decide what you are willing and able to concede in order to arrive at an agreement, which satisfies all parties.

Concessions have two elements; cost and value. It is possible during negotiations to concede issues that have little cost to you but have great value to the other side. This is the best type of concession to make. Avoid, however, conceding on issues that have a high cost to you irrespective of their value to the other side.

When preparing for negotiations, ask yourself the following questions:
• What is the best deal I could realistically achieve in this negotiation?
• What is the likely outcome of the negotiation?
• What is the limit of my authority?
• At which point should I walk away?
• What concessions are available to me?
• What is the cost of each concession and what value does each have to either side?

Strategy:
Planning your strategy is important in negotiation. Once you know your objectives, you need to work out how you are going to achieve them. It is also useful to try and see the negotiation from the other side and try and work out what their strategy will be.

During the negotiation there will be opportunities to use various tactics and you need to decide which of these you feel comfortable with and at the same time recognise the tactics being used by the other side.

Ask yourself the following questions:
• How am I going to achieve my objectives in this negotiation?
• What is the strategy of the other side likely to be?
• What tactics should I use within the negotiation?
• What tactics are the other side likely to use?

And Finally – Tasks:
If you go into negotiation with a colleague or colleagues, you need to decide during the preparation phase:
• What role will each team member take in the negotiation?
• How can we work together in the most effective way?

Some teams of negotiators appoint team leaders, note takers, observers and specialists, each with their own clearly defined authority and roles to perform. Having a clear understanding of roles within the negotiation will make the team approach much more effective.

Today’s News: Two very good friends in the news today: First up Paul McCord has launched a very specialist and in my view, much needed blog, about CRM and associated topics. I will be guesting for him frequently and you can discover it for yourself here

Over on Salesopedia, Greg Stebbins is in conversation with Clayton Shold and he explains the difference between a sales person and a sales professional – think you know? You can listen in here

Tomorrow: Well, I am working on a brand new project, which is going to be quite simply, mega Am I going to share it with you? No, not yet, due to confidentiality agreements etc but I will, within the next four weeks, maybe sooner.

As ever, wherever you are in this rapidly shrinking world of ours, have a great w/e and be sure to join me and my guests next week. - JF

During negotiations, it can be in the interest of each side to keep asking questions and raising objections. Many excellent negotiators are low reactors who will proceed very slowly. However, given that the opening position of each party differs, then there has to be movement and concessions if a deal is to be struck.

Negotiators will tend at first to discuss extra demands, trying to get the other side to agree to these without offering anything in return. They will be reluctant to give information or will defer decisions in order to increase the pressure on the other person.

When an offer does come, it will often be on the basis of a quotation based on the minimum quantity at the lowest possible price. In all this, the negotiator is attempting to dominate the interview, pressing for maximum advantage, and trying to force the other person to concede on a major issue.

The skilled negotiator will ask the other side for a complete list of all his, or her requirements, and will not concede on a single issue until he knows the nature of the whole package. He will then begin to trade concessions, starting with the smaller, less important aspects of the package.

Negotiators should avoid making one-sided concessions which will severely weaken their final position and could affect the overall profitability of the deal.

When movement comes, it begins slowly, and then can be very rapid as both parties sense a deal is on the cards. Movement does tend to be discontinuous with either party moving and the other holding up the agreement at any one time. This leads to short periods of deadlock, which can be brought to an end in different ways.

Some of these are:

• Period of silence. Wait for the other party to speak.

• Agree to a concession. Always trade concessions by saying“If I do this, will you do that”?

• Adjournment to review positions.

• Agree to leave certain issues to one side for later and concentrate on the rest.

Identify areas of common agreement.

• The use of the relationship with the other side to break the deadlock.

Signals to be aware of that could mean the other side wishes movement to take place could include:

• Trial movement. One side uses words like “What would you say if …?” or uses hypothetical examples.

• Summarises the position to date and asks “Where do we go from here?”

• One side calls for adjournment.

• Appeals to the other side’s better nature.

• Asks for more information.

• Uses “crowding” techniques to force movement, e.g. aggressive behaviour, sets deadlines and time limits, threatens use of the competition.

The use of concessions is a vital part of building a profitable relationship for both parties in the negotiation. Earlier, we discussed the different elements that could constitute the final deal. The use of concessions enables negotiators to build a mutually profitable deal that is not one-sided in the other side’s favour i.e. It results in a “win-win” outcome.

And Finally – Bargaining:

When it comes to bargaining try to get the other side to commit themselves first. For example:

Scenario 1.

Buyer: “I’m willing to reach some sort of deal, but I want a 10% discount”.

Salesperson: “Okay, I’ll agree a 10% discount, but we’ll have to look at a longer-term agreement”.

Buyer: “Well, thanks for the 10% but the one year contract we have already agreed will have to stand”.

Scenario 2.

Buyer: “I’m willing to reach some sort of deal, but I want a 10% discount”.

Salesperson: “Okay, we may be able to look at our discount structure, but to do that we’ll need to agree a two year contract”.

Buyer: “Okay, well two years may be possible, but can we go to the full 10%?”

In the first scenario an offer of 10% was made, but what was asked for was vague. Responding to a specific demand like this we need to be vague, but positive: “Okay, we may be able to look at our discount structure”. and our counter demand needs to be specific: “But to do that we’ll need to agree a 2 year contract“

Remember, when you bargain, offer vague but always ask specific.

Today’s News: If you are on LinkedIn, you will want to read a free e-book from my “crazy sister“, Jill Konrath – it is superb advice on how to make the most of your presence. I will make it available here next week, but in the meantime not too many speakers make it on the cover (by themselves) of National Speaker’s Association (NSA) magazine during the course of the year, but Jill has- so it’s really a big deal. She is not unaturally, pretty excited about it – me too:-)

You can download it here: http://download.yousendit.com/5E885E9878CEC60B

NB: It’s only there for 7 days, so download it right away. You can read it anytime.(That’s a suggestion, not an order!)

Tomorrow: The irrepressible, Sales Diva herself, Kim Duke returns on the JF Guest Author Spot, so expect something completely different!

First of all, my sincerest apologies to all of you who arrived here today, eagerly anticipating a fantastic, fresh posting, only to be confronted by my very first log from way back in October 2006.

We discovered a gremlin of the worst possible kind and it has taken the elves all day to re-enter all the data and of course chase the little blighter out. Normal service is resumed……… now for today’s post.  

Typically, the more confident we feel, and the better we are prepared, the more successful will be the outcome of our negotiations.

Personal power comes from many sources. To build up and increase our confidence as negotiators we need to step back and analyse the sources of our personal power and compare them with those of the people with whom we are negotiating.

Power is not absolute. In most negotiating relationships the power balance moves with time as the negotiation progresses.

Here are just a few examples of sources of power:

Information Power:
Information power comes from having knowledge that will influence the outcome of the negotiation. Planning and research can increase our information power, as can asking the right questions before we reach the bargaining phase of the negotiation.

Reward Power:
Reward power comes from having the ability to reward the other party in the negotiation. It could be the power a buyer has to place an order for goods and services or the power a salesperson has to give good service and solve problems.

Coercive Power:
Coercive power is the power to punish. This is seen most commonly in the buyer- seller relationship, but can be a feature of other types of negotiation.

Situation Power:
Situation power is the power that comes from being in the right place at the right time. A customer is desperate to place an order and you are the only source of supply in the short term. Having an effective network and keeping in touch with what is happening can increase your situation power.

Expertise Power:
Expertise power comes from having a particular skill which you can apply and which can influence the outcome of the negotiation. Improving negotiation skills helps you win better deals. Other areas of expertise could also help the outcome of the negotiation.

And Finally – Referent Power:
Referent power comes from being consistent over time. If people see you as having a clear, consistent strategy as a negotiator, you will increase your referent power. Having standards that you stick to and being consistent will help to increase your referent power. In the eighties, Margaret Thatcher wasn’t universally popular, but was respected by many for being consistent in her views and behaviour. In the end she failed because her approach was too rigid and she was unable to adapt to changing circumstances.

Today’s News: Fellow Top Sales Expert, Mark Hunter is giving away 200 sales hunting tips for FREE and you can download the PDF here He also writes an excellent daily blog – check it out here

Tomorrow: On the JF Guest Author Spot “The Revenue Warrior” – Joe Heller makes a very welcome return.

The JF Guest Author Spot

A nasty little insecurity habit I see in many business owners and sales people is their fear of losing a deal.

So how does this habit show up?

It’s simple.

You have a customer/potential customer who asks for a proposal from you.  You provide the proposal, quote your rate and then something happens that honestly makes you quiver with fear.

It is when the customer says…

“Company X said they could do the same thing for cheaper. Can you match their rate?”

And in a heart beat you say “Yes – I can.” – and you proceed to drop your rates as quickly as if you were holding a hot potato!

You Just Failed The Squeeze Test

Listen.

Do you know WHY customers buy on price?

They don’t see any noticeable DIFFERENCE between you and your competitor. So they start squeezing your proposal and the competitor’s proposal just like they were standing in the grocery store and picking oranges.

This is also reinforced when you drop your prices after “being squeezed”.  In fact, they feel that you “false advertised to them.”

You basically have told your customer that:

• your initial proposal was a rip-off
• you’re desperate for their business
• you aren’t to be trusted in the future

So What Should You Do In This Type Of Situation?

Easy.

Don’t put yourself in a position to be “juiced.”

1. Understand the hot buttons of what your customer is looking for and establish their budget AHEAD of time if possible. (Don’t be bringing in the Package A, B or C plan – that’s for wimps.)
2. Position your company with something unique to your services that will actually MEAN something to your customer.
3. If you know your rates are fair – then don’t fold like a taco when faced with the “price squeeze.”

In negotiation – it isn’t about one party getting everything and the other party feeling cheated.  A successful negotiation is where both parties feel satisfied.

If you drop your rates to win the deal – you will actually feel resentful of your customer as your profit margins have been slashed.  This isn’t exactly going to give you the warm fuzzies – and you will end up providing “less than” customer service and product. (you know what I’m talking about here!)

If the deal is worth negotiating over – then make sure your customer “gives up something” in order to receive that discounted rate. 

You also have one last choice (which happens to be my favorite). I stick with my rate (which I know is fair), I advise them of why my rate is higher than my competitor and how I can solve their problem in a UNIQUE way. 

And then?

I also show them that I am willing to walk away.  Remember in the world of selling – this shows confidence, honesty and that you have a backbone. (instead of a wishbone!)

So there.

    Kim Duke, The Sales Diva, provides savvy, sassy sales training for women small biz owners and entrepreneurs. Kim works with clients internationally, showing them The Sales Diva secrets to success! Sign up for her saucy and smart FREE e-zine and receive her FREE Bonus Report “The 5 Biggest Sales Mistakes Women Make” at www.salesdivas.com

Kim is also a member of the Top Sales Experts team and you can read more about her here

Today’s News: My good friend Paul McCord’s latest book, “SuperStar Selling: 12 Keys to Becoming a Sales SuperStar“, has just hit Amazon as a pre-release offering.  As a matter of fact, the posting is so new they still don’t have a picture of the cover of the book up; they don’t have a page count (251 pages); and they don’t have the “search inside” feature up and working (they are so far behind on this feature it usually takes months to get it up and running).  The book should be in stock for delivery by the end of February or very early March.

Nevertheless, the book can be ordered now.  They won’t charge your credit card until the book is actually in stock and ready to ship.  The best part is that if you order as a pre-release offering, you’ll get a 5% discount. Then when the book is in stock, if they are offering a discount off cover price ($16.95), you’ll get the discounted price PLUS the extra 5%

Over at Salesopedia, this week’s highlighted topic is sales process and they are showcasing the work of some excellent authors, plus me – you can read them all here

Tomorrow: Thoughts about confidence and successful negotiating.

People who are successful negotiators, always have a well thought out strategy before entering into the negotiation, are well prepared, self confident and structure the negotiation, so that they remain in control of the negotiating process.

The recommended structure for negotiations is:

• Establish the issues being negotiated
• Gather information
• Build a solution

Stage 1. Establish The Issues

Begin by agreeing an agenda for the negotiation i.e.

• What needs to be discussed and agreed?
• Who will be involved and what will be their role?
• What timescales are we working towards?
• What are the major issues that need to be agreed?

Many negotiators make the mistake of negotiating too quickly whereas skilled negotiators spend 20% more of their time asking questions and looking for alternatives.

Do be aware that professional buyers will want to gain your commitment on issues, such as price, early on in the negotiation but you should never commit yourself to anything until you have established everything that is being negotiated.

Seasoned negotiators will often bring up an issue at the end of the negotiation, when you are vulnerable and likely to agree to a one sided (Lose-Win) concession, in order to conclude the deal. You can legislate for this ploy by asking the other side for their . “shopping list” before beginning the negotiation and refuse to accept any last minute additions to the list.

Issues will include things like price, delivery schedule, payment terms, packaging, quality of product, length of contract etc. At this stage issues are kept general and no concessions are made or agreements reached

Stage 2. Gather Information

This is a vital part of the negotiation and you need to remember that there are four kinds of information

• Information you have that you are willing to give to the other side
• Information you have that you are unwilling to give to the other side
• Information the other side has that they are willing to give you
• Information the other side has that they are unwilling to give you

You need to decide, before the negotiation, how much you are willing to share information and what your own information requirements are. This will set the climate for the negotiation and will determine the amount of trust that exists between both parties. Skilled negotiators are able to ask a range of open, closed and follow up questions and are able to listen effectively. They also wait until they have all their information requirements, before making concessions.

Stage 3. Build A Solution

Having gathered information the next stage is to begin to put together a solution. Usually this will take the form of the selling side putting forward a proposal, or opening bid. The opening bid should be ambitious, but defensible. You should always challenge an opening bid and refuse to let an unacceptable bid stay on the table.

Typically, there will then be a process of bargaining, concessions will be traded and movement take place, until, hopefully, agreement is reached. Concessions should not be given away for free and you should be wary about conceding on issues for which you are not prepared.

A final tip: The very best negotiators always enter into negotiation with a “three position plan”

That is: Best Price, Realistic Price and Fallback Price – they never, ever accept less than their “Fallback Price”

Today’s News: Just click on this banner to find out all about Her Majesty’s upcoming programme, she describes it far more eloquently than I ever could – Your loyal servant, as ever M’am.