Archive for August, 2009

Winning Sales Negotiations: The Pizza Secret

Tuesday, August 25th, 2009
Secrets To Making The Biggest Deal Pizza! <p> (c) - 2008 </p>

Secrets To Making The Biggest Deal Pizza! (c) - 2008

Recently I was talking with some friends of mine who are planning on using the current depressed real estate market to “trade up” and get a bigger / better house. They were lamenting the fact that this process was going to require them to negotiate with the sellers. They had come to me because they knew that I teach others how to use negotiation to quickly close bigger deals.

What they wanted to do was use that “win-win” technique that they had heard others talking about and they wanted me to teach them how. Sigh. Nothing in life is ever as easy as it seems, but from this experience I thought there were a few key points that you might be interested in…

The Negotiating Pizza

When I started talking with my friends about the house that they wanted to buy, I kicked off the conversation by asking them what they wanted to get out of the negotiations that they knew would be required. They said that price meant everything to them – they could only afford to spend so much money.

Dear reader, clearly we were starting off on the wrong foot. The problem is that my friends were looking at the negotiations for the house that they wanted as a pizza. Assuming that that pizza had been cut into 10 slices, they wanted to make sure that they came out of the negotiations with at least 6 pieces and not 4 pieces. This is not win-win negotiating.

In their quest to get the house that they wanted at the lowest possible price, my friends were approaching the negotiations as a contest – a contest that would have a clear winner and a clear loser. No wonder they were nervous!

A Better Negotiating Pizza

Win-win negotiating has everything to do with how both sides of the table feel after the negotiators are done. If somebody feels as though they’ve come away with less pizza than the other side, then it wasn’t a win-win discussion.

What you need to do is to make the pizza BIGGER. That way it doesn’t become a matter of who gets how many pieces, because both sides actually walk away with more pizza.

In working with my house buying friends, I asked them where they had some flexibility – what else could we add to the negotiations besides just price. It turns out that they were flexible on when they could take possession – they didn’t need to move in immediately. Also, my friends are handy fixer-uppers and so they were willing to make changes to the house – the current owners didn’t have to actually have the work done.

Final Thoughts

In the end, these two additional negotiating points were what allowed my friends to successfully close the deal. The current owners had not yet picked where they wanted to move to so having more time to get out of the house was very important to them. Additionally, they had a lot of fancy furniture that they didn’t want to have to worry about covering while the house was being painted, etc. My friends got the house for a fair price and everyone went away with more than enough pizza.

Sales negotiators who learn how to make the pizza bigger for both sides of the table will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

The single  most important factor in determining how a negotiation is going to turn out centers on a single question: who has the most power? The big problem that most of us have is that we don’t think that we have enough of it. Turns out, we’re generally wrong about this…

Haggling Is Becoming A Part Of Every Sales Deal

Tuesday, August 18th, 2009

Haggling Is Becoming A Part Of Every Sales Deal   <div xmlns:cc="http://creativecommons.org/ns#" about="http://www.flickr.com/photos/17537227@N00/2424796243"><a rel="cc:attributionURL" href=Welcome to the new world order: consumers are learning to haggle. In the extended global economic recession, consumers who never used to even think about bargaining are suddenly starting to haggle over every deal. Is this a good thing or a bad thing?

What Businesses Are Being Hit?

As you might expect, haggling has arrived first at the firms that have been the hardest hit by the recession. This includes the hotel business as well as clothes and electronics stores. All three of these firms are very interested in moving merchandise as quickly as possible. That’s why they are now open to making deals with their customers.

The market research firm America’s Research Group has just completed a study that shows that 72% of American consumers reported that they had haggled in the past four months. This is up from 56% just a year ago. What’s really telling is that the same consumers report that they have been successful in getting a better deal 80% of the time.

Different Approaches Seem To Be Working

Consumers are discovering that negotiating for a better deal seems to work with just about any business transaction. Formerly off-limits firms including the New York Plaza hotel and Nordstrom are starting to warm to the idea of having their customers bargain with them for the best deal.

Customers are finding that they may not always be able to get a discount on an item that they are interested in buying. However, getting the seller to cover shipping or the sales tax seems to work. If that fails, then having the seller include an additional item in order to complete the deal has also proven to be successful.

Secrets To Successful Haggling

Many firms are creating programs to deal with consumers who want a better deal. However, in order to protect their margins, they are not advertising these programs – they only offer them when the consumer pushes them.

Credit card companies are notorious for doing this. They are willing to negotiate on interest rates and late fees. However, the only way customers can find out where the companies are flexible are by asking.

Final Thoughts

The arrival of the new style of haggling for better deals is showing up in the hardest hit industries: cars, real estate, etc. However, we should expect this to spread quickly to other industries.

The big question will be whether or not this marks a fundamental change in how consumers go shopping: are they going to expect to have to bargain for everything in the future? No matter what the answer is, in the short term this type of sales negotiating is bound to boost sales. Sales negotiators who learn how to take advantage of this new style of buying will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Recently I was talking with some friends of mine who are planning on using the current depressed real estate market to “trade up” and get a bigger / better house. What they wanted to do was use that “win-win” technique that they had heard others talking about and they wanted me to teach them how…

Sad Sales Negotiators Do A Bad Job

Tuesday, August 11th, 2009
Scientists Have Discovered That Sad Sales Negotiators Do A Bad Job <br>(c) - 2009

Scientists Have Discovered That Sad Sales Negotiators Do A Bad Job (c) - 2009

In the quest to do a better job at negotiating deals, sales negotiators have been known to do some pretty wild things in order to condition themselves to perform at a high level – extreme exercising, exposure to hot / cold temperatures, and even eating some pretty weird things. However, is it possible that they’ve been overlooking the most important thing – how happy they are?

The Power Of Sad

Dr. Robert Cialdini has spent a lot of time studying how we can persuade others and how they can persuade us. In fact he’s written a popular book on the topic titled Influence: Science and Practice in which he talks about what causes us to do things that we may not be giving a lot of thought to.

When it comes to sales negotiations, Dr. Cialdini and his peers have done some interesting studies that should cause all of us to sit up and take notice.

The Big Guess

The social scientist who were doing the research started with the hypothesis that when we get sad, we get motivated to do something to change our current circumstances in order to get out of our sad mood.

They took this thinking one step further. They also guessed that sad buyers would be willing to pay higher prices for a given product and sad sellers would be willing to sell a product for a lower price.  Do I have your interest now?

The Experiment

The cool thing about being a social scientist is that you get to test your hypothesis on people, not rats. In this case the scientists had their (human) test subjects divided into two groups. One group watched a sad movie and then wrote a paragraph about how the movie made them feel. The other group watched a movie about fish (!) and then wrote about what they had done that day.

Next, both groups were once again divided into two groups and one group was asked to mark on a piece of paper what price they would sell an item at and the other group was asked to mark on a piece of paper what price they would buy an item at.

What the scientist discovered just might scare you. It turns out that their original guess was right: sad buyer ended up being willing to spend 30% more for an item than emotionally neutral buyers. Likewise, sad sellers were willing to sell an item for 33% less than emotionally neutral sellers. The really spooky part of all of this is that the sad buyers and sellers had no idea that their sadness had affected them so much.

Final Thoughts

Although we often get caught up in preparing for our next sales negotiation, what the social scientists have discovered is that we bring everything else that is going on in our lives to the table with us. On a similar note, the other side of the negotiating table does the exact same thing.

Before you start  your next sales negotiation, you need to take a minute or two and evaluate how you are feeling. If there is anything that is bringing you down or making you depressed, then you have got to try to find a way to resolve it or at least make it better before the negotiations start. Learn to do this and it will allow you to close better deals and close them quicker.

Questions For You

Have you ever gone into a sales negotiation feeling sad? How did that negotiation turn out for you? Have you ever negotiated with someone who was clearly feeling sad? Did you do better than you normally do in that deal? If you are feeling sad, what do you do to make yourself become happy? Leave me a comment and let me know what you are thinking.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Welcome to the new world order: consumers are learning to haggle. In the extended global economic recession, consumers who never used to even think about bargaining are suddenly starting to haggle over every deal. Is this a good thing or a bad thing?

Video: Negotiating With Vendors

Tuesday, August 4th, 2009

So this time around, we’re going to do things just a bit differently. There’s a video that has been going around on YouTube that does a pretty classic job of capturing just how ridiculous negotiating between vendors and clients can be.

The video is just a bit over two minutes long, but in three different situations it does a great job of capturing the vocabulary that we hear over and over again when clients try to negotiate with vendors solely on price.

We’ve talked about it before, but this video is a great reminder that when you are getting ready to enter into a sales negotiaton, you need to have identified ALL of the different points (including price) that are up for negotiation.

Here’s the video, enjoy!

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

In the quest to do a better job at negotiating deals, sales negotiators have been known to do some pretty wild things in order to condition themselves to perform at a high level -- extreme exercising, exposure to hot / cold temperatures, and even eating some pretty weird things. However, is it possible that they’ve been overlooking the most important thing -- how happy they are?