Definition of Negotiation "reaching the most satisfactory outcome for ALL concerned" |
Lets Make a Deal
Smart buyers will always ask for a better price. Unfortunately, too many sales people and business owners automatically think that reducing their price is the most effective way to respond to this request. However, negotiating is not always about price. Although price is a factor in virtually every sale it is not usually the primary or motivating factor. Everything you say and do from the first contact with a prospect affects the value of your product or service in their mind. That's why I believe it is important to look at the negotiating process differently in order to achieve better results. First of all, invest time gathering information about your prospective customer, his needs, situation, and buying motives. The more information you have the more prepared you will be to negotiate later in the sales process. Regardless of what you sell, and to whom, information will help you negotiate more effectively. Many of my clients tell me that their customers care only about price, but upon further exploration, other issues usually arise. Uncovering the key issues your customer is facing is critical to your negotiating success. The second most important step is to establish the value of your product or service to your customer. Positioning is an important factor and will affect the price your customer is willing to pay. What pain does your product or service eliminate? How does it solve a problem they are experiencing? How do your products and service differ from your competitors? Most of my clients sell premium products at a premium price. In exchange, their customers receive better than average service, faster response times, or higher quality products. What is your leverage and how can you use it to increase the value of what you sell? You have executed the above steps but price is still an issue for your customer. What do you do now? Instead of conceding to their request and giving them a discount, focus on creating a trade. This means you should ask for something in exchange for making a concession. What can you trade or ask for? Almost anything! A longer contract, a bigger order, more add-on items, an introduction to another key decision-maker in the company, access to their mailing list or client database, or payment terms. You can negotiate for products and services that the other person or company offers such as consulting, office equipment, computers, furniture, business services, etc. I once worked for an electronics company and my boss offered a big-screen as payment for services to a potential vendor. I was shocked when the vendor eagerly accepted because I always had the impression that business people focused strictly on cash. Here are a few ways you can effectively position this request. "If I could do that price for you would you be willing to extend the length of the contract for an additional three months?" "If I could work that out would you be prepared to give me advertising space?" "The only way I could give you that is if you add one more line of products." "Let's put that aside for the time being. Would you be able to give a similar amount of?in exchange for that concession?" The key here is to think outside the box and explore other options available to you. I recall speaking to a prospective client about a training workshop and was asked to make a concession that amounted to a fifteen percent discount. I was not comfortable with this so I asked my prospect if he would be willing to give me a comparable amount of his product instead. He did not have the authority to make such a decision but spoke to someone who did. My request was eventually denied so my client conceded to my initial offer. Another effective approach is to make the concession but take something away from the initial offer. For example, you could say, "I can do that. However, I will have to charge you for?" or "I can do that. Do you want free delivery or after-hours service taken out of the contract?" Most people will expect you to keep all the conditions "as is" but they will want the lower price. By demonstrating how much the concession is worth you can reduce the effectiveness of their request. Finally, another strategy is to always ask for something in return for making a concession even if you don't need it. I have been surprised how many times I have gotten something extra simply by asking. Plus, it often prevents the other person from asking for an additional concession because they know you will ask for something in return. Remember, your ultimate goal is to give away as little as possible in order to close the sale. Every time you discount your product or service you discount yourself and eat away your profits. © Copyright 2004 Kelley Robertson Kelley Robertson, President of the Robertson Training Group, is a professional speaker and trainer on sales and employee motivation. He is also the author of "Stop, Ask & Listen - Proven Sales Techniques to Turn Browsers into Buyers." Receive a FREE copy of "100 Ways to Increase Your Sales" by subscribing to his 59-Second Tip, a free weekly e-zine at http://www.KelleyRobertson.com. You can also contact Kelley at 905-633-7750.
MORE RESOURCES: 4 Big Tech product managers and an engineer share negotiation tips that nabbed them thousands of dollars in better comp Business Insider Gantz accuses Netanyahu of ‘sabotaging’ hostage deal negotiations with Hamas The Times of Israel University of Alaska faculty contract negotiations head for federal mediation - Anchorage Daily News University of Alaska faculty contract negotiations head for federal mediation Anchorage Daily News Melton, Pennsylvania mayors critical of union in Nippon-U.S. Steel deal negotiations Chicago Tribune Starbucks workers strike in Seattle, LA, and Chicago as negotiations stall KUOW News and Information Negotiations between Sparrow-U-M, workers on hold until 2025 Lansing State Journal Ski patrol union contract negotiations reach agreement on 24th of 27 items, but not the main one: pay The Park Record Putin Thinks He Can Win: Why Would He Negotiate? Center for Strategic & International Studies What People Still Get Wrong About Negotiations HBR.org Daily Summa Health alleges Anthem holding up negotiations, insurer responds Akron Beacon Journal City Center negotiations down to one development team, sources say RichmondBizSense HHS Releases Final Guidance for Second Cycle of Historic Medicare Drug Price Negotiation Program HHS.gov Tulane Professional Football Negotiation Competition Tulane Law School | Collector Paul-Emmanuel Reiffers Reveals His Most Nerve-Wracking Artwork Negotiation Yet Cultured Magazine What Medicare Negotiation Tells Us About Drug Pricing In The U.S. healthaffairs.org Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026 CMS Tariffs as a potential trade negotiating tactic brownfieldagnews.com Craig unsure how CR negotiations will play out brownfieldagnews.com The Arsenal of Instability: How Expanding Western Defense Production Impacts Negotiations in Ukraine Center for Strategic & International Studies CCPD Crisis Negotiation Team Resolves Seven Hour Standoff with Robbery Suspect Culver City Crossroads Armenia PM: Negotiation process after 1994 ceasefire was about returning Karabakh to Azerbaijan Armenia News The Negotiation Advantage: How Women’s Relational Skills Drive Better Deals Columbia University M&A Negotiation Simulator: Open-Source Release of Alpha Prototype Stanford Law School Join us for a Salary Negotiation Workshop University of Montana Contract Action Team leaders ask for your involvement this negotiation cycle Minnesota Association of Professional Employees Scared to negotiate job offers? Do it anyway. Here’s why. George Mason University Adversarial Anticipation: Real-Time Simulated Negotiation Stanford Law School Impact of federal negotiation of prescription drug prices Brookings Institution Gregory Husisian Comments on USMCA Negotiation, Auto Industry Impact Foley & Lardner LLP ‘Think About Negotiation As Relationship Management Rather Than A Dealmaking Skill’ Chief Executive Wheels & Deals: Mastering the Art of Negotiation for Settlement Talks and Mediations American Trucking Associations Idorsia provides update on the exclusive negotiations for the global rights to aprocitentan GlobeNewswire What Role Can Turkey Play in Ukraine Negotiations? Center for Strategic & International Studies IGA-455: Climate Leadership: Persuasion, Advocacy and Negotiation Harvard Kennedy School Lior Frankiensztajn named 2024 Fisher Fellow in negotiation and conflict resolution Harvard Law School Negotiate Like a Pro HBR.org Daily The First-Ever Government Negotiation Process for Drugs Has Finished, But the Politics Are Ongoing KFF Negotiation Presentation and Free Lunch Old Dominion University Ihab Khatib named 2025 Fisher Fellow in negotiation and conflict resolution Harvard Law School Farm aid negotiations fall apart Tri-State Livestock News Twelfth meeting of the Intergovernmental Negotiating Body (INB) for a WHO instrument on pandemic prevention, preparedness and response World Health Organization Another Administration Win In Medicare Drug Price Negotiation Lawsuits healthaffairs.org The Negotiation Reality in Real Estate INSEAD Knowledge Treaty negotiation milestone and 2025 operating plan gives more certainty for Columbia Riv nwd.usace.army.mil Anna Maria College Hosts First New England Negotiation Competition Anna Maria College Negotiation Timelines of International Legal Instruments (July 2024) Center for International Environmental Law LSU Executive Education Offering Bundled Negotiation Strategies Courses - Louisiana State University LSU Executive Education Offering Bundled Negotiation Strategies Courses Louisiana State University Starbucks headquarters cafe unionizes as U.S. negotiations drag The Seattle Times Negotiation Meeting Notice for UTL24-031 East and West Water Treatment Plant Upgrades City of Boynton Beach 'No better option': Selectboard votes to hire attorney for acquisition negotiations with Housatonic Water Works theberkshireedge.com No, the Maple Leafs are not blowing the Mitch Marner contract negotiation - The Athletic The New York Times Statement on Energy Permitting Reform Act negotiations Citizens' Climate Lobby Negotiations Break Down Between Teachers and District Sonoma Valley Sun Commentary: Negotiating on climate change Vashon-Maury Island Beachcomber Behind the Scenes, Preparations for Russia-Ukraine Negotiations Carnegie Endowment for International Peace Monthly Medicare Drug Price Negotiation Savings by State Center For American Progress State of Washington, federal agencies agree on future of tank waste cleanup at Hanford Site Washington State Department of Ecology Governments progress on negotiations for a pandemic agreement to boost global preparedness for future emergencies World Health Organization |
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