Archive for the ‘negotiation tactics’ Category

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Is It Possible To Have A Sales Negotiation With A Friend?

Friday, February 18th, 2011
Image Credit The Toughest Negotiations Can Be With Friends…

The Toughest Negotiations Can Be With Friends…

Sigh. So this is a very difficult subject to talk about. Generally when we talk about negotiating, we’re talking about sitting down and going at it with an unnamed and unknown “other side of the table”. When that other side is somebody that we already know, with whom we already have a relationship, things get very complicated, very quickly…

Why Negotiating With A Friend Is Difficult

Sales negotiations are never easy, and when you are dealing with someone that you already have a relationship with it becomes just that much harder to do. There are several reasons for this.

The first is, of course, simply that your existing relationship with this person can be harmed by the process of negotiating. During a negotiation, you are trying to maximize what you walk away with. However, by doing so you may end up offending or even angering your friend. If you didn’t know or care about the other side of the table, then this would be of little concern. However, if they are your friend first and negotiating opponent second, then you’ve got a potential problem on your hands.

The next reason is that unlike someone that you are meeting for the first time, your friend already knows you. In fact they know a lot about you. This means that a lot of the standard negotiating tactics that we use during a sales negotiation may not work on them because they already know how you think. If you walk away from the negotiation, they may be in a very good position to call your bluff because they know you so well.

How To Negotiate With A Friend

All of this leads back to the fundamental question: just how should we go about negotiating with our friends? Sadly, there isn’t one simple, complete answer to this question. Instead, we’re going to have to take several steps if we want to have any chance of conducting a successful negotiation while at the same time maintaining our relationship with our friend.

We need to understand that our relationship with the other side of the table is going to be adversely effected by a negotiation if the other side walks away feeling that they got a bad deal. This is what we need to spend our time working to prevent.

More often than not, the belief that you’re getting a bad deal is going to come from the feeling that you got ripped off – you were not able to get the full value for the good or service that you were trying to either sell or buy. This is what we need to prevent.

There are a lot of different ways to do this. One of the most effective is to take extra time doing research when you are negotiating with a friend. What you need to look into is what the fair market value for the item is. Once you know this, you are ready to negotiate.

During the negotiations you will need to present the results of your research. Before you start to discuss prices with your friend on the other side, you are going to need to get them to agree as to what the fair market value for the item being discussed is.

Once you’ve been able to reach agreement on this issue, then you’ll be well positioned to enter into pricing discussions with the other side. Once a final price has been agreed to, it won’t be your words that they’ll dwell on after the negotiation is over, but rather their understanding of the market for the product and how the final price relates to that.

What All Of This Means For You

Negotiating with friends is never an easy task for any sales negotiator. The risk of damaging the relationship during the negotiation process is great.

You need to understand that this type of negotiation is different from any other sales negotiation because the other side of the table already knows you. This will make using your set of standard negotiating tactics much harder because they will be able to see though you.

Instead, you are going to need to do enough homework in order to determine a fair market value for the item being discussed. When the negotiation starts, you’ll have to get the other side to agree to this value. Once that is done, you can start to discuss pricing for your specific deal.

It is possible to both negotiate with a friend and to keep that person as a friend after the negotiations are over. In order to make this happen, you need to do your homework and reach agreement with them early on in the negotiations. Do this and you can have your negotiations and keep your friends too.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: If a deal isn’t going to happen, how can you keep a good relationship with your friend?

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

What We’ll Be Talking About Next Time

Isn’t the telephone a wonderful invention? I mean just sitting there at your desk you can pick it up (or flip open your mobile) and reach out and touch just about anyone in the world. It sure seems like this must the best way to do sales negotiations in the future – just imagine how much more you could get done! Hold on — the phrase “speed kills” comes to mind for a good reason – the phone may be the worst thing that has ever happened to sales negotiations…

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Posted in negotiation tactics | 3 Comments »

Sales Negotiators Know That A Good Bargain Can Close A Deal

Friday, February 11th, 2011
Image Credit Who Doesn't Love A Bargain?

Who Doesn't Love A Bargain?

When you are negotiating with the other side of the table, you want them to agree to your deal. In order to make this happen, you have to find a way to motivate them to “buy” what you are selling. One of the most powerful ways to make this happen is to offer them a bargain…

What Is A Bargain?

Face it, we all like bargains. Why would we behave any differently when we are in a sales negotiation? As a negotiator, you need to realize this and find ways to use it to your best advantage.

The power of a bargain is so strong that even if we aren’t sure that we really need something, we’ll go ahead and buy it if we think that it’s a bargain. Sometimes the presence of a bargain is what it can take to close a deal.

You need to understand how bargains work on the other side. The first thing that you need to come to grips with is that a bargain is really just a state of mind. What this means is that the details of the bargain that you are offering to the other side don’t really matter. What matters is what is going on in the mind of the other side of the table – do they feel as though they are being offered a bargain that they just can’t pass up?

Additionally, once you understand the power of a bargain, you need to take advantage of it. This means that whatever you are offering to the other side of the table needs to be presented in such a way that they will perceive it as being offered a real bargain.

The Power Of An Unused Bargain

One of the greatest types of bargains that I’ve been able to use in my sales negotiations is what I like to call the “unused option”. It turns out that there’s something that car dealers have known for a long time that we should all take the time to learn.

Car dealers make a lot of money by selling us options for our new cars that we want but really don’t need. More often than not, the other side of the table will be willing to pay for options and extras that go along with what you are offering them. In fact, they’ll be so highly motivated to obtain these extras that your product will look even more attractive just because you have these options. It really doesn’t matter if the other side would ever actually go ahead and use these features, just having them is enough to make your product look like even more of a bargain.

What All Of This Means For You

In order to get the other side of the table to commit to striking a deal with you, you’ve got to offer them something that they just can’t refuse. One powerful way to do this is to offer them what they’ll see as a clear bargain because everyone likes a bargain.

There are a number of ways to package your offer as a bargain. The key thing that you need to do is to change the other side’s state of mind so that they clearly believe that they are getting a bargain. Additionally, the more options and extras that you can offer the greater the value the other side will put on what you are offering.

Taken together, these techniques provide you with a way to create an offer with a bargain that no one will be able to refuse. Take the time to find ways to turn your offer into something that the other side of the table sees as a bargain and you’ll be able to close more deals and close them quicker!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Do you think that options and extras have as much value in closing a deal when you charge for them versus giving them away for free?

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

What We’ll Be Talking About Next Time

Sigh. So this is a very difficult subject to talk about. Generally when we talk about negotiating, we’re talking about sitting down and going at it with an unnamed and unknown “other side of the table”. When that other side is somebody that we already know, with whom we already have a relationship, things get very complicated, very quickly…

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Posted in negotiation tactics | No Comments »

Good Negotiators Know The Power Of “What If?”

Friday, February 4th, 2011
Image Credit Sometimes The Simplest Questions Are The Most Powerful

Sometimes The Simplest Questions Are The Most Powerful

How are your mind reading skills? Not so good? Dang – just imagine how handy that would come in during your next sales negotiation. You could just close your eyes and you’d be able to see what the other side of the table was thinking. I can’t help you get magical powers, but I might be able to do something that’s pretty close…

It turns out that asking the right questions is a powerful way to get information from the other side of the table. One question that can yield a great deal of information is the humble “what it”. You just need to know how to use it correctly…

Why Use “What If”?

Before taking the time to learn a new sales negotiating technique, we always have to take a moment and ask ourselves why we are bothering. When any negotiation starts, the other side has knowledge that we don’t have. What we’d like to be able to do is to find out what they know.

This is where the “what if” technique comes into play. The more that we can find out about things that the other side of the table knows about, the better off we’ll be.

The other reason that negotiators like to use the “what if” technique is because it has a habit of opening doors for us during a negotiation. By making what if proposals to the other side we force them to react. Based on how they react, we may discover where we have some room to take the negotiations.

How To Use “What If”?

Although using the “what if” technique is pretty much as simple as it sounds – just ask the question, there is more to it than that. Before asking the question you have to be ready for the answer that you’re going to get.

As an example, if you were negotiating with someone to purchase ball bearings then you might ask them for a quote for 10,000 ball bearings. At the same time you might also ask them for a quote for 5,000 and 15,000 ball bearings.

Effectively you are asking them “what if I bought more or less than I’m planning on”. You’ll get three different price quotes back and this should reveal a great deal of information about how the other side goes about pricing their products

.

As you start to use “what if” questions during a negotiation, you indicate to the other side that you may have some flexibility and you are trying to see if they have some flexibility also. As they respond, you’ll gain more information about how they are seeing the world and once you have this information then you’ll be able to better find a way to make a deal happen.

What All Of This Means For You

Sometimes the simplest negotiating techniques are the best. The “what if” technique is so simple that it can easily be overlooked.

Asking “what if” is an effective technique that can uncover information that would otherwise remain hidden. Additionally, it can reveal to both sides of the table additional ways for them to do business that neither may have been aware of before.

Success in negotiating means that you have the ability to discover ways to reach a deal with the other side of the table even when others can’t find a way. Using the simple technique of asking “what if” at the right time and then taking the time to listen to what the other side has to say will allow you to close more deals and close them quicker!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What types of trade-offs do you think that asking “what if” can best uncover?

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

What We’ll Be Talking About Next Time

When you are negotiating with the other side of the table, you want them to agree to your deal. In order to make this happen, you have to find a way to motivate them to “buy” what you are selling. One of the most powerful ways to make this happen is to offer them a bargain…

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Posted in negotiation tactics | 1 Comment »

Escalation Power: How To Use It, How To Defend Against It

Friday, January 28th, 2011
Image Credit
Sometimes Escalation Is Necessary…

Sometimes Escalation Is Necessary…

When we’re talking about negotiating and someone brings up the tactic of escalation what pops into your head right off the bat? Do you see yourself becoming frustrated with the person that you’re negotiating with and getting up and storming off to go have a talk with their boss? That’s one form of escalation, but that’s not what we’re going to talk about here – we’re going to talk about the other type of escalation…

The Escalation Tactic

During a negotiation you may find yourself in a situation where you’ve taken your price down as low as you can possibly go. However, the other side may not have picked up on the fact that they’ve reached the bottom and they may be pressing for even more concessions from you.

Simply put, that’s not going to happen. However, you need a way to signal to the other side that they’ve gone too far. At the same time you don’t want to lose this deal. Clearly a clever tactic is needed here.

When you use the escalation tactic, you revisit an issue that the other side thought was resolved, you apologize, and then you change it. Most commonly this involves raising your price.

A case in point would be if you were close to closing a deal and all of a sudden the other side of the table started to make a series of demands for shorter delivery times or asking for more time to pay their bills. Clearly you can’t accept these kinds of demands at this stage in the negotiations. By using the escalation tactic now you can go back and, after apologizing, raise the price that you had previously agreed to.

This is going to have a dramatic impact on the other side of the table. They’re not going to know what to do – now everything is once again up in the air. Assuming that they still want a deal (and they almost always do), they’re going to have to start to work to try to get the price back down to where it used to be.

By forcing them to do this, you will have effectively moved the focus of the negotiation from what they had been asking for back to the bottom line price. Once the original price has been reached again, the negotiations should be over and the issues that had been causing you problems should no longer be on the table.

How To Defend Against To Escalation Tactic

In the hands of a skilled sales negotiator, the escalation tactic is a powerful tool. That’s why if you find yourself sitting on the other side of the table when the escalation tactic starts to be used, you’re going to need to know what to do.

There is no simple way to deal with an escalation during a negotiation. What I can offer you is four steps that will provide you with a way to defend yourself against the full power of this tactic:

  1. Call Them On It: using this tactic resets the clock on the sales negotiation and is going to require that both sides invest more time and energy than they had originally intended to. The other side may end up not being willing to make this kind of investment. Challenge them and find out.

  2. Pause: stop the negotiations when the other side starts to use this tactic. This will give you time to consider both what they are now offering and will give you time to fully consider what all of your possible responses are.

  3. Mirror Image: hey, they are resetting the clock so why not do the same thing yourself. Review what’s been agreed to so far and pick out one of their hard won points and state that you can’t live with what’s been agreed to and state that it’s going to have to be renegotiated.

  4. Hit The Big Red Button: consider walking away from the deal. In fact, tell the other side of the table that you are considering walking away from the deal. See if this causes them to reconsider their use of this tactic.

What All Of This Means For You

Every negotiator needs to have a set of tactics that they can use in a variety of negotiating situations. Should you find yourself in a situation where the other side of the table is asking for too much from you, the escalation tactic provides you with an effective way to communicate to them that you are unwilling to budge.

The escalation tactic requires you to revisit some negotiation point, apologize to the other side of the table, and then undo the agreement that had been reached. More often than not this has to do with a previously agreed to price that you end up raising.

As a sales negotiator you are going to have to be careful when you use this powerful negotiating tactic. There are effective counter measures to it and if you aren’t fully committed to what you are doing, you may find yourself putting the deal at risk. The escalation tactic is one more tool for you to have on hand so that you can use it when the time is right.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Under what circumstances do you think that using the escalation tactic would help you close a negotiation?

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

What We’ll Be Talking About Next Time

How are your mind reading skills? Not so good? Dang – just imagine how handy that would come in during your next sales negotiation. You could just close your eyes and you’d be able to see what the other side of the table was thinking. I can’t help you get magical powers, but I might be able to do something that’s pretty close…

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Posted in negotiation tactics | 4 Comments »

Why Sales Negotiators Need To Watch Out For The Give & Take

Friday, January 21st, 2011
Image Credit Just When You Think You're Ahead, You May Find Yourself Losing!

Just When You Think You're Ahead, You May Find Yourself Losing!

You may or may not realize it, but the other side of the table in a sales negotiation might be as smart or even smarter than you are. I say this not to make you worried, but rather to make sure that you remain aware throughout the entire negotiation. A good example of this is the old “give and take” technique – just when you think that you are ahead, you may find yourself way behind all of a sudden …

The Give And Take Technique

The give and take technique of negotiating is very simple on the surface. In fact, when it’s being used, the side of the table that is using it will come across as being very agreeable and easy to work with.

It all starts with the negotiator that is using the give and take technique making a series of concessions to the other side. What may have seemed like significant issues that needed to be worked out before the negotiations started, quickly get resolved and often get resolved in favor of one side of the table.

As you may have guessed, this is all part of the tactic. In a sales negotiation things are never as straightforward as they may seem.

Why This Technique Works So Well

As things start to go better than expected for one side of the negotiation, a very natural thing will start to happen – they’ll let their guard down. When the give and take technique is being used, breaks or pauses in the negotiations are very important to the side that is using this technique.

The reason that these breaks are so important is because of what the side that is making the unexpected progress will do during those breaks – they will tell the world about how well things are going. This could be as simple as placing a call to their management.

What has happened contains the key to why this technique works so well. The other side of the table has now become psychologically conditioned to close the deal. Since they’ve told the world that things are going well, they have clearly communicated that a deal is going to be reached. Now they are committed.

This is when the negotiator that is using the give and take technique can strike. You can start to take back everything that you’ve already given. You can do this by demanding concessions from the other side that effectively weaken or even negate the concessions that you’ve already made.

An example of this would be if you had agreed to sell a piece of property to the other side of the table. Let’s say that you’ve made a big concession on the price already. In this second part of the negotiation, after the other side has already committed to making a deal, you start to turn the tables on them. You can demand that they pay for the survey of the property. You can make them pay this year’s taxes on the property. You can have them pay to move you off of this property and onto another piece of property. You can see how you can very quickly make back all of the money that you gave away up front.

What All Of This Means For You

The give and take technique is a clever way to make the other side of the table give you exactly what you want. It starts out simply enough with you giving in to the other side’s requests.

It’s important to take breaks in order to allow the other side to communicate to the outside world that they are making progress in the negotiations. Once that’s been done, the give and take negotiator can strike. Because the other side is now committed to making a deal, you can take back your concessions and get even more out of them.

It takes a great deal of planning in order to use the give and take technique. However, it is very powerful because it works over time – it’s never clear just exactly what you are up to until the negotiations are almost over. They say that it’s better to give than it is to receive, but in sales negotiations it’s actually better to give and take!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What do you think is the best way to defend yourself against the give & take technique?

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

What We’ll Be Talking About Next Time

When we’re talking about negotiating and someone brings up the tactic of escalation what pops into your head right off the bat? Do you see yourself becoming frustrated with the person that you’re negotiating with and getting up and storming off to go have a talk with their boss? That’s one form of escalation, but that’s not what we’re going to talk about here – we’re going to talk about the other type of escalation…

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Posted in negotiation tactics | 2 Comments »

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