Jonathan Farrington’s Blog

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.

Most negotiation coaching courses are very good at telling you what to do right but in my experience, very few tell you what you are doing wrong. Last week I was coaching a group of senior sales professionals and I produced this list; whilst not exhaustive, it should act as a guide.

The 40 most common mistakes made by negotiators - recognise any of these from the last time you were involved in a negotiation?

• Failing to prepare effectively for negotiation.

• Underestimating your own power.

• Assuming the other party knows your weaknesses and strengths.

• Being intimidated by the status of the person with whom you are negotiating.

• Concentrating on your problems rather than those of the other party.

• Forgetting the other side has things to gain from agreement as well as yourself.

• Making assumptions about what the other side wants.

• Having low aspirations for yourself.

• Giving too much credence to time deadlines set by the other side.

• Assuming the other side is aware of the short and long-term benefits of reaching agreement.

• Being intimidated by rules set by the other side.

• Misunderstanding tactics used by the other side.

• Talking too much.

• Failing to listen effectively.

• Believing everything the other side says about you, your service, your competition etc.
 
• Being forced into discussing price too early in the negotiation.

• Revealing your hand too early.

• Aiming too low with your opening bid.

• Accepting the first offer.

• Giving away concessions for nothing.

• Conceding an important issue too quickly.

• Making concessions too easily and raising the other sides. expectations.

• Feeling guilty about asking for a concession.

• Making concessions before knowing all the other sides demands.

• Failing to make concessions conditional on final agreement being reached.

• Making concessions of equal size to those on offer.

• Paying too much attention to price rather than value
 
• Discussing issues for which you are not prepared.

• Being inflexible.

• Losing sight of the overall agreement when deadlock is reached over minor issues.

• Responding to a high demand with a counter offer instead of challenging the validity of the high demand.

• Assuming deadlock means agreement is not possible.

• Feeling deadlock is only unpleasant for you and not the other party.

• Trying to be liked during the final stages.

• Bluffing without having a strategy ready should your bluff be called.

• Taking things personally.

• Offering to split the difference…

• Being intimidated by “This is my final offer”!

• Not preparing for the possibility you may need to walk away.

• Carrying out a post-mortem with the other side.

Today’s News: My pal Steve Martinez is always looking outside the square and is never afraid to challenge paradigms, particularly with his marketing. This week, he is asking us to test our selling skills against a robot! Yep, really, and it is a superb challenge, which you will lose He also provides lots of excellent free tools, so do take the test here

Tomorrow: It’s a first time appearance on The JF Guest Author Spot for my good buddy Clayton Shold, with some very profound words of wisdom.

In any kind of negotiation the planning stage is probably the most important. Too often in negotiations we go in badly prepared and end up giving concessions that reduce the overall profitability of the final deal.

The importance of planning is in having a very clear idea before entering into the negotiation.

1. What are my objectives?

2. What does the other side wish to achieve?

3. What information will influence the final outcome of the negotiation?

4. What concessions can I make?

5. How am I going to achieve my objectives?

6. What part will other people play in the negotiation?

Generally, the more time that is spent in planning and preparing for the negotiation, the more beneficial will be the final outcome.

Objectives

Before entering into the negotiation, you need to have a clear idea of your objectives and try to work out those of the other side. Ask yourself the following questions:

1. What exactly do I wish to achieve from this negotiation?

2. Which of my objectives:

a. Must I achieve?
b. Do I intend to achieve?
c. Would I like to achieve?

3. What options or alternatives would be acceptable to me?

4. What are the other side’s objectives?

5. How does the other side see the negotiation?

Information

It has often been said that information is power. In any negotiation, there will be four types of information that is important to the final outcome.

1. What information do I have that the other side has also?

2. What information do I have that the other side does not have?

3. What information do I need to have before negotiating with the other side?

4. What information does the other side need before it can negotiate with me?

This can be particularly important when negotiating with people who concentrate on price issues. What other things are important to this person? What pressures do they have on them to conclude the deal? How well is their company doing at the moment? How important is it that they deal with my company? etc.

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 on 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.

Today’s News: I discovered some excellent new sales related sites this week: The first has been designed and created by an old friend Jan Visser and I was really impressed, think you will be too - www.salesteamtools.com

Tomorrow: Mr Sales Gravy himself, Jeb Blount is my guest on The JF Guest Author Spot

Most successful negotiators recognise that the way people involved in negotiations behave does not always reflect their true feelings or intentions. Today, I am going to discuss negotiating tactics that may be used by you or on you. Whether or not you choose to use these tactics, it is vital to understand:

• Tactics work

• They can be being used on you, and can be used by you

• Once they are recognised as tactics, their effects are reduced or eliminated

You may feel that there is no need in your particular case to negotiate or resort to tactics in negotiation -this relly is a matter of personal choice.

In general, tactics are used to gain a short-term advantage during the negotiation and are designed to lower your expectations of reaching a successful conclusion.

There are many tactics available to negotiators and here are just a few you may recognise.

Pre-Conditioning:

This can begin before you even get together or start your negotiations with the other party. Let us take a sales example:

You telephone for the appointment and the other side says aggressively:

“Don’t bother coming if you are going to tell me about price increases. You’ll be wasting your time and I will be forced to speak to your competitors”.

When you do arrive you are kept waiting in reception for half an hour, without being told why. As you walk through the door into the other person’s office they indicate for you to sit down but they don’t look up. Instead, they sit leafing through your competitor’s brochure, in silence, ignoring your efforts to make conversation.

You are given an uncomfortable low chair to sit in that happens to be directly in line with the sun shining into the office. At this stage, how confident do you feel?

The Monkey On The Back:

Some negotiators have the irritating habit of handing their problems to you so that they become your problems. This is the “monkey on their back” that they want you to carry around for them.

A classic example is the person who says, “I have only got £10,000 in my budget”.

This is often used tactically to force a price reduction. Here is what you can do.

When one side says “I have only £10,000 in budget”, look concerned and say something like:

“That is a problem. As you are no doubt aware, the cost of our systems can be anything up to £20,000 and I really want to help you choose the best system that meets your needs. Does that mean that if one of our systems has everything you are looking for but costs £20,000, you would rather I didn’t show it to you?”

The “monkey” has been returned and they have to make a choice. If the objection is genuine and the budget figure is correct, you must try to look for an alternative that meets your needs as well as theirs.

If they genuinely can only spend £10,000 that is not a tactic but the truth. In dealing with tactics the first decision you must make is whether it is a tactic or a genuine situation. If it is genuine, you have a problem to solve, rather than a tactic to overcome.

The Use Of Higher Authority:

This can be a most effective way to reduce pressure in the negotiation by introducing an unseen third party and can also be effective in bringing the negotiation to a close.

“I need to have this agreed by my Board of Directors.” “If they agree to the terms we have discussed, do we have a deal?”

However, be careful to use this device sparingly so that the other side does not begin to feel you have no decision making authority yourself.

One way of countering this tactic is to say before the bargaining begins: “If this proposal meets your needs, is there any reason you would not give me your decision today?”

If the other side still wishes to resort to higher authority, appeal to their ego by saying: “Of course, they will go along with your recommendations, won’t they? Will you be recommending this proposal?”

Nibbling:

Negotiations can be a tiring process. As the point draws near when an agreement is likely, both sides exhibit a psychological need to reach agreement and get on with something else.

You are very vulnerable as the other side reaches for their pen to sign the order form or contract, to concede items that don’t significantly affect the final outcome. “Oh, by the way, this does include free delivery, doesn’t it?” or “Oh, by the way, the price of the car does include a full tank of petrol?”

Nibbles work best when they are small and asked for at the right psychological moment. Like peanuts, eat enough of them and they get fattening.

Good negotiators will often keep back certain items on their wants list until the very last minute, when the other party is vulnerable. Watch out for this.

The Good Guy And The Bad Guy:

You may have come across this tactic before or else seen it used in films or on television. This is a tactic designed to soften you up in the negotiation.

For example, you are negotiating the renewal of your service contract with the Buying Director and his Finance Director. You present your proposal and the Buying Director suddenly gets angry and walks out in disgust muttering to himself about how unfair you have been and how the relationship is well and truly over.

You pick up your briefcase and are being shown the door when the Finance Director smiles at you sympathetically and says:

“I’m terribly sorry about that. He is under a lot of pressure. I would like to help you renew your contract, but he really will not consider the price you have suggested. Why don’t I go and talk to him for you and see if we can agree a compromise? What is the bottom line on the contract? If you give me your very best price, I will see what I can do”.

The best way of dealing with this tactic is to recognise the game that is being played and assess exactly what the quality of the relationship is. You may be able to say something like:

“Come off it, you are using good guy, bad guy. You are a superb negotiator, but let’s sit down and discuss the proposal realistically”.

If you don’t have this kind of relationship, stand firm and insist on dealing with the bad guy, or else bluff yourself and give a figure that is within your acceptable range of alternatives.

One way of combining good guy, bad guy. with higher authority is by saying things like:

“Well, I’d love to do a deal with you on that basis, but my manager refuses to let me agree terms of this nature without referring back and he refuses to talk to salespeople. Give me your best price and I will see what I can do”

Body Language:

It is important in negotiation to react verbally and visually when offers are made. You may have seen the more theatrical negotiators hang their heads in despair or accuse you of being unfair and souring a perfectly good relationship when you present your proposal. Human nature is such that we can believe and accept these outbursts against us and our negotiating position becomes weaker as a result.

Ensure the next time you are in a negotiation that you react to the other party’s offer. If you show no reaction, they may be tempted to ask for more and more and you will lose the initiative in the negotiation. Also, it is almost certain that their opening offer is higher than the figure for which they are prepared to settle, so it is important that you clearly signal your unwillingness to accept the opening position.

If you reach the point below which you will not go, it is important that you show this with your body language. News readers, when they have finished reading the news, have a habit of picking up their script and tidying up their papers. This tells the world that they have finished their task and are preparing to leave.

Similarly, when you make your final offer, it can be very powerful to collect your papers together and indicate with your body that it really is your final offer. Put your pen away, sit back in your chair and remain silent. Look concerned and keep quiet.

If your voice says final offer but your body is saying let’s keep talking, the other party will disregard what you say and keep negotiating.

The Use Of Silence:

During the negotiation, you may make a proposal and find the other party remains silent. This can be very difficult to handle and often signals disapproval to the inexperienced negotiator. Just as nature abhors a vacuum, so silence induces the need in people to talk.

If you have a proposal to make, make it and ask the other side how he or she feels about it. Having asked the question, sit back and wait for the answer. Whatever you do, don’t change your offer as this could seriously weaken your position.

The Vice:

A common technique used by negotiators when presented with a proposal is to say:

“You’ll have to do better than that.”

The most powerful way of dealing with this is to ask them to be more specific. Whatever you do, don’t weaken your negotiating position in response to the vice by giving anything away, too easily. This will only encourage repeat behaviour.

The Power Of Legitimacy:

People believe what they see in writing. We all assume that if a thing is printed or written down, it is non-negotiable. This is what can make price lists so powerful. If you have to present a customer with a price increase or you wish to encourage an early order to beat a price increase, show something in writing such as an office memo from your boss announcing the increase. This will have a far greater impact than just saying your prices are about to go up.

When presented with a price tag in a shop, ask to speak to the manager and make him an offer. You could be surprised at the results.

And Finally -The Low Key Approach:

Don’t appear too enthusiastic during negotiations. Over-enthusiasm can encourage skilled negotiators to review their strategy and demand more.

If you are in a negotiation and the other side is not responding to your proposal, recognise this could be a tactic and avoid giving concessions just to cheer them up. Salespeople like to be liked and will often give money away in a negotiation, if the other side appears unhappy.

For example, if you are buying a car avoid saying to the seller things like:

“This is exactly what I’m looking for. I really like the alloy wheels”.

Develop a low-key approach. Say things like:

“Well, it may not be exactly what I’m looking for but I might be interested if the price is right”.

I will share some more of negotiation tips next week with you.

Today’s News: I am in the UK with one of my favourite clients and it is now past 11pm - you may have been looking for some inspirational commentary; my question is this - “Who motivates the motivator?” You will discover from Monday, that I intend to make the Blogit far more dynamic  “What JF, even more dynamic?”

Tomorrow:You need to ask? Actually, we are making significant changes to TSE and planning an overhaul of Top 10 Sales Articles - oh, and I am lunching with my son in Cambridge! Have a great w/e, wherever you are- JF

The fundamental difference between selling and negotiation is that selling is a process to identify the fit between what the seller is offering and what the buyer is seeking. Negotiation is the process of agreeing the terms of the deal and is part of the selling continuum. Yet the negotiation should only begin when there is a genuine commitment from the buyer and seller towards a conditional sale.

It is a bit like dating; usually a person is unlikely to book a restaurant until a date has been agreed to. Equally, the person being asked for a date would not particularly care about the restaurant choice unless they were sufficiently interested in attending the date. Once the date has been agreed it’s simply a matter of agreeing/negotiating the type of restaurant, location and time. When an individual is or has committed to do something, their level of interest rises dramatically, which is why the negotiation phase can be a hotbed of emotional intensity and tension.

Excellent salespeople use the selling phase to lay the ground rules for a possible future negotiation by ensuring that they fully understand their prospect’s requirements and decision making process, whilst planting seeds and setting the tone for the negotiation phase. If, for example, you do all the giving through the selling phase, you have established the pre-supposition that you will continue to do all the giving in the negotiation phase. The transition from selling to negotiating can only occur when the desire to do business has been evoked in the prospect.

So, always start with the end in mind:

The benefits of a well-negotiated deal can have a major impact on bottom line profit and naturally, when the buyer and seller enter into a negotiation they both want the best possible deal for their own organisation. It is little wonder that negotiations are viewed as competitions, where the outcome has to yield winners and losers. The ‘winning’ negotiator may experience short-term gains, yet long-term gains may prove harder than winning the lottery. That is why the process of creating an agreement that each party will willingly fulfil is referred to as Win-Win and provides increased probability of sustaining long-term customer relationships. Every negotiation has the potential to achieve one of the following outcomes:

 Win-Lose - where your customer wins a better deal at your expense and can lead to an unprofitable long-term relationship, because you have conceded too much to sustain future account servicing and growth.

 Lose-Win - where you win a better deal at your customer’s expense, which can cause bitterness and resentment, resulting in cancellations and a myriad of issues that stem from negative emotions.

 Lose-Lose - which is symptomatic of inflated egos on both sides that are prepared to ‘fight to the bitter end’ just to do a deal. This outcome creates bitterness and relationships are unlikely to continue past the short term.

 Walk-Away - which is actually a better outcome than all the above, because it preserves the possibility of a future relationship that is profitable for both parties.

 Win-Win - where both parties have made concessions, yet both the buyer and the seller are willing to comply with the agreed terms and share a perception that the outcome was fair to both.

Recognising the importance of Win-Win outcomes is the first step towards planning to create an environment where both people are willing to share information and invest time in the negotiation process.

Some people see themselves as natural, spontaneous negotiators, which may get the adrenaline pumping, yet a lack of planning can result in lost revenues, lost opportunities and lost time. Thorough preparation is more likely to create and instil a high level of self-confidence, as well as create an increased probability for a Win-Win outcome.

Finally,here is a useful checklist of questions that will ensure good preparation practice:

•  Who has the most advantage? (the better bargaining position)
•  How strong is your proposition?
•  How strong is the other party’s proposition?
•  What will you and the other party be asking for?
•  What are your options and alternatives?
•  What is the cost/value of each negotiation point?
•  What are the other party’s worries, frustrations and motivations?
•  What are the fixed and variable points from all sides’ perspectives?
•  What ideally do you want to achieve?
•  What is your fallback position from which you are not prepared to move?
•  What are your fixed points?
•  What can you use as concessions if you decide to trade?
•  What are the real issues for you?
•  Who will be attending the negotiation?
•  What are their roles?
•  What are their positions?
•  Is the decision-maker present?
•  In your team, what roles will you be taking?
•  Who will handle which issues?
•  How would you describe the negotiation style of the other party?
•  How will this affect your own approach in the negotiation?
•  What did you learn from your last negotiation that you can apply to this one?

Today’s News: This promises to be an extremely busy weeek: The new autonomous Top Sales Experts site is due for launch next week and there is still much to do - I will be introducing you to the expanded team, in the next few days.

As it is Monday, I need to remind you that last week’s nominated articles have been posted over at Top 10 Sales Articles Once again, we have some excellent work, so do drop in if you can.

Tomorrow: “The Sales Diva” herself makes a welcome return - Kim Duke is in the JF Guest Author Spot so expect something very sassy!

A skilled negotiator will create high levels of rapport and be sensitive and empathetic to the people they are negotiating with, yet can still be hard on the issues. The ability to separate the people from the issues, and recognise that negotiations are often fraught with emotional intensity, can help sharpen the focus on the interests of the other party to better balance perceptions. If the negotiation doesn’t appear to be going anywhere and your prospect is behaving like a bully you might feel angry and frustrated. You may already have considered simply agreeing to their demands. In difficult negotiations, there are four vital behaviours that can increase your resourcefulness and consequently your opportunities for getting to “Win-Win”.

1. Manage your emotional state

Build rapport by matching the other person’s style, pace and approach until you have achieved a ‘connection’ Personalise the negotiation by using “I” rather than your organisation’s name. This demonstrates your belief in your proposal and highlights your credibility.

In the face of feelings like anger, disappointment, frustration, confusion, and resentment, we often react without thinking. In such a situation mentally detach yourself and think about it before you respond. It helps to reframe attacks and tactical manoeuvres as feedback that the other person’s interests have not been fully acknowledged. Stay focused on your goal of reaching an agreement.

2. Look for quick mutual wins to build the belief “we can agree”

The more abstract your communication the more likely you are to reach agreement. Therefore, seek to gain agreement at an abstract level first and then get into the detail. For example, if two people wanted what appears to be very different things, such as a) nuclear disarmament and b) more resources spent on defence, if you looked at finding out both sides highest intention, you may discover that ‘peace’ was the desired outcome for both people. Therefore, at this abstract level they have found agreement so the negotiation can continue by gradually getting more detailed. Questions that chunk up your prospect into the bigger picture include:

- For what purpose?
- What’s your intention behind (negotiating point)?

Seek to address the easy/quickest areas of agreement first to reinforce the process of agreement is simple and straightforward. If you discover an area where agreement may not be reached quickly then agree to leave it until later. If some points become contentious it can help discussions if you both move your body, because the mind and body are connected, physical movement helps to create mental movement. That’s why a walk can work wonders during tough negotiations. Provide regular summaries of what you have both accomplished to install the belief that the negotiation is making progress.

Some sales people write out all the points to be negotiated on separate sheets of paper, then ask each point is agreed they move the paper to a different place, so that the buyer can physically see the progress being made which serves to motivate the entire process.

3. Use active listening skills and ask questions to give you a greater understanding of the other person’s viewpoint

Giving good attention to people makes them more intelligent. Poor attention makes them stumble over their words and appear stupid. You are best positioned to change someone’s mind after you have listened to that person. People tend to close down and stick to their position until they feel heard. The goal of active listening is for you to hear and understand other people – their words, thoughts, and feelings, and to let them know you’ve heard and understood them.

Acknowledge their motivations, feelings, and point of view, even when you don’t agree with what they are saying. Your goal is to understand the message, not judge the validity of what they say.

4. Build trust by negotiating fairly

Demonstrations of power erode trust. If you are on the receiving end of this type of behaviour, describe your observations, and the consequences of continuing the current process. For example: “You know you’ve named what seems to me a low price, and so now I’ll name a higher price, and then we’ll each insist on our position until one of us gives in. I don’t find my best negotiations work like this.“

Then propose a different way to proceed, for example: “It would help me to understand the criteria of a fair offer if we could take a look at some of the relevant standards in this industry.” Before beginning the negotiation it can help to agree the ground rules and stick to them. Act with integrity and hold a healthy respect for the intentions of the individual you are negotiating with. There is always a reason why a point of negotiation is important to the buyer and if we can appreciate more about their underlying reasons, this knowledge can be used and acted upon.

Today’s News: OK, it’s yesterday’s news But I was distracted by my daughter’s birthday, so I do have a legitimate excuse: Over on Salesopedia, Clayton Shold is in conversation with Art Sobczak on “Dealing with Objections” and as Clayton observes - “This guy is a real pro!” Check it out here

Tomorrow: I rest? No, not yet - we are burning the midnight oil working on The JF Consultancy site.

Next week, I will be revealing the expanded line-up for the brand new Top Sales Experts site; it really is a “who’s who” of the very best sales gurus in the world - more soon.

So, as ever, have a great w/e and do make it back here on Monday please - JF