Posts Tagged ‘concession’

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Stand Your Ground: Two Ways To Not Fold During A Sales Negotiation

Friday, April 30th, 2010
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In Order To Defend Your Side Of A Negotiation, Always Have An Exit

In Order To Defend Your Side Of A Negotiation, Always Have An Exit

So there you are: the classic sales negotiator in the headlights. You’ve got a firm fixed price that you’ve been told to not budge on and yet you know that you’re getting ready to start a negotiation during which the other side is going to be hammering you to lower your price. Sure doesn’t make you want to get up early in the morning, does it?

Rule #1: Slow Down

When I’m working with clients who have a technical background, the question of how fast to move during a negotiation often comes up. Specifically, if you think that the price that you are asking for is going to be a big bone of contention, then should you just cut to the chase and start talking about price right off the bat?

Interestingly enough, and somewhat counter intuitively, the answer is no. If you jump to talking about the issue that you think is the most important, then you’ve lost an important opportunity to find out what the other side of the table thinks is the most important issue – and it may not be the same thing that you are worried about.

Taking your time also gives you a chance to gauge the other side of the table’s interest in the overall negotiation. If they need to get this deal done and move on to other things, then there may really be no sticking points at all if you don’t bring them up.

Finally, by taking time to get around to a major issue in the negotiations you are sending a signal to the other side of the table. Specifically, you are telling them that you are not all that anxious about this negotiation and that you won’t be caving in to their demands.

Rule #2: It’s All About Your Exit Plan

If you are going to look the other side of the table in the eye and tell them that your price is the best price that they are going to get from you, then you’d better be ready to back that statement up. This means that you’re going to have to have done your homework if you want to have an exit plan that will allow you to avoid having the negotiations end in a wreck.

Why are you charging the price that you are charging? Is your price as good as anyone else’s? Prove it. Is it based on what you charged this customer last time they bought from you? Prove it.

Your goal here is to boost the credibility of your price in the eyes of the other side of the negotiating table. The more that you’re able to do this, the better the odds are that you’ll eventually be able to get them to agree to doing a deal with you.

There is one additional side benefit to doing your homework and providing a solid backing for the price that you are asking. If in the end you find yourself having to make some sort of concession, no matter how small, on your price, then having presented a solid case for the price will end the discussion. The evidence that you provided should stop the other side from asking for even more concessions.

What All Of This Means For You

Starting a negotiation when you know that you you’ve got to defend a price that will be coming under heavy assault from the other side of the table is never fun. However, it is possible to be successful if you’ve done your homework before the negotiations begin.

Speed kills in a negotiation. Don’t dive in and start talking about the most challenging part of the negotiation right off the bat. Instead let the other side drive the discussion and find out what’s important to them. Also always have the facts to back up your price – it will make your job that much easier.

It is possible to come out of a negotiation with your price intact. All it takes is the good sense to take it slow and to come prepared to explain why your price is one that the other side is going to be willing to live with.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Help For Technical Staff

Question For You: Do you think that you should ever bring up a negation point, or should you always leave this to the other side to do?

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What We’ll Be Talking About Next Time

Ok, so it’s time to get down and dirty about this sales negotiating stuff. Time after time I keep seeing sales negotiators making the same two mistakes over and over again and it just has got to stop. You can build the best product in the world, have the best sales team, but if you keep dropping the ball when it comes to negotiating the sale, then it’s all for naught…

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Deadlines Make Sales Negotiators Give It All Away

Tuesday, June 23rd, 2009
Sales Negotiators Can Give It All Away In The End If They Are Not Careful

Sales Negotiators Can Give It All Away In The End If They Are Not Careful

Every sales negotiation has some sort of time limit associated with it. You might have an hour, a day, or even longer to conduct the negotiations, but there is some point in time at which you’ll run out of time to talk. This is when most sales negotiations fall apart.

The Problem With The End

Studies of negotiators has revealed a disturbing fact about all of us. During a normal negotiation we engage in a process in which we give a little bit and take a little bit. Pretty much what you would expect in any transaction. However, then the news arrives.

When we are informed or we become aware that the window to negotiate is coming to a close (perhaps someone important needs to leave for the airport), then for some weird reason one side or the other makes a mistake.

The Big Mistake

When we become aware of an approaching deadline, all too often we start to make big concessions to the other side of the table that we wouldn’t normally make. What happens next is that they don’t make big concessions to us, instead they make smaller concessions which causes us to make more big concessions.

It turns out that this type of behavior is practiced by both experienced and inexperienced negotiators. The only real difference is that the inexperienced negotiators made bigger concessions than the experienced ones did.

Why Do We Behave This Way?

In all honesty, this type of behavior really shouldn’t come as a surprise to any of us. It all boils down to one simple fact of life: humans have a tenancy to make very bad decisions when we are under pressure. Clearly, the last few minutes of a negotiation is the worst time for us to be making concessions.

What To Do About It

If we can accept that we are poor decision makers when we are under pressure and if we don’t want to give away the farm at the end of a sales negotiation, then what’s a sales negotiator to do? In the end this is all about self-discipline.

You need to limit yourself to only making small concessions during the negotiation and you need to space them out during the negotiations instead of bunching them up at the end. As the end of the negotiations draws near, before you make ANY concession keep asking yourself:

  1. Why should I make this concession, and
  2. Can this deadline be negotiated?

If you can keep these questions in mind as the negotiations wind down, then you’ll be all set to close better deals and close them quicker.

Questions For You

Have you ever given anything away at the end of a negotiation that you wished that you had not? Has the other side ever made big concessions to you during the last few minutes of a negotiation? Have you ever caught yourself before you make a big concession that you would have regretted? Do you use this tendency for the other side to give in at the end as a negotiating tactic? Leave me a comment and let me know what you are thinking.
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What We’ll Be Talking About Next Time

I’ve been amazed  over and over again to see sales negotiators just give away their negotiating power to the other side time after time. They just don’t realize that they are doing it. Let’s see if we can put a stop to this…

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Posted in deadlines | 1 Comment »

Sales Negotiators Know Not To Give In First

Tuesday, June 16th, 2009
Sales Negotiators Who Make The Wrong Concessions End Up Playing Defense

Sales Negotiators Who Make The Wrong Concessions End Up Playing Defense

I wish that there was some sort of black magic potion or single scientific study that I could point to in order to justify what I’m about to tell you, but there isn’t. So here it goes: never be the first to make a concession on a MAJOR issue.

Why Should We Take The Hard Line Here?

Concessions are a part of every sales negotiation. In fact we’ve spent a lot of time talking about the 5 ways that sales negotiators can use concessions to get what they want.  Now all of  a sudden it looks like we’re doing a 180 and telling you to not give in. What’s up with that?

The big difference here is that we’re focusing on the MAJOR issues – not the 100′s of other, smaller issues that come up during any sales negotiation. It’s on these issues and these issues alone that you need to take the hard line.

It’s All About The Experiments

This is one of those things that has been the subject of a lot of  on-the-job experimentation. What each of the studies has shown is that the side of the table that makes the first concession on an important issue always seems to end up doing poorly. The reasons are not completely clear, but it appears as though the side of the table that made the concession then finds themselves on the defensive during the rest of the negotiation.

How Can You Use This Information?

Knowing that giving in first on major issues is a bad idea, you need to adjust your negotiating strategy so that you don’t deadlock over these issues. This means that BEFORE you allow the sales negotiation to get to a major issue, make sure that you discuss several smaller issues. On these issues, make the first concession if it is appropriate. This will buy you good will with the other side that you’ll be able to play on when you reach a major issue.

Final Thoughts

When you stand firm on the major issues you’ll be sending a message to other side that perhaps their expectations are too high and they should start to expect to lower them. Since you won’t be giving in first, you won’t have to be on the defensive for the rest of the sales negotiations and you’ll be all set to close better deals and close them quicker.

Questions For You

Have you ever been in a sales negotiation where you ended up being the first to make a concession on a major issue? How did that sales negotiation turn out? Has the other side ever been the first to make a concession on a major issue? How did that make you feel when they did that? Leave me a comment and let me know what you are thinking.

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         The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Every sales negotiation has some sort of time limit associated with it. You might have an hour, a day, or even longer to conduct the negotiations, but there is some point in time at which you’ll run out of time to talk. This is when most sales negotiations fall apart…

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Posted in concession | 1 Comment »

3 Secrets Successful Sales Negotiators Use To Win

Tuesday, June 2nd, 2009
3 Secrets That Top Sales Negotiators Know

3 Secrets That Top Sales Negotiators Know

Ok, so I’ll be the first to admit it – I used the forbidden word “win” in the title. In sales negotiations we prefer to not say “win” because it implies that there is also a “loser”. and that’s not a good thing. How about if we try something like “3 secrets to always walking away feeling successful“?

It’s All About Patterns

Successful sales negotiators are good at what they do because they know what they are doing. That being said, they also have developed patterns for conducting sales negotiations that serve them well. If you want to improve how your sales negotiations turn out, then taking the time to study these patterns will help move you towards your goal.

The 3 Secrets

  1. Control Your Location & Time: Just like most sports teams, the sales negotiator who conducts a negotiation on his / her home turf tends to do better. Negotiating at your base of operations makes life easier – you have better access to information and people and you spend less time searching for things that you need to complete the deal. Additionally, although there is no one perfect time to conduct sales negotiations, every deal has its own best time. Late on Fridays can often be a powerful time to close a deal quickly!
  2. Understand Your B.A.T.A.N.A?: Before you start any sales negotiation, you need to make sure that you have a good understanding of what your Best Alternative To A Negotiated Agreement (BATANA) is. If the talks break down, what will your next action be? Knowing this in advance gives you more power while you are negotiating.
  3. Start High, Give In Slowly: If you are negotiating to sell something, you need to plan the negotiation in advance. This means setting your price high enough so that you have room to allow the other side to “bring you down”. During every negotiation, you will have to make  concessions to the other side. Studies have shown that sales negotiators who make their concessions in smaller increments seem to end up doing better.

Next Steps

The art of sales negotiations does not have one magic “sliver bullet” that suddenly transforms an average sales negotiator into a top-notch sales negotiator. Instead, there are a 1,000 negotiating skills that provide the scaffolding that we all need in order to climb to the next level negotiating. Get this right and you’ll be well on your way to being able to close better deals and close them quicker.
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The Accidental Negotiator Blog is updated.

Questions For You

Have you ever had to conduct a sales negotiation in a location that was less than ideal for you? How did that deal turn out? What was the best time that you ever conducted a sales negotiation? What was the worst? Leave me a comment and let me know what you are thinking.

What We’ll Be Talking About Next Time

Wouldn’t it be great if the best sales negotiators in the world could drop by our place and sit down with us for awhile to share what they’ve learned? If you knew that they were coming, what questions would you ask them?

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C’est La Vie – French Lessons For Sales Negotiators

Tuesday, April 28th, 2009

Sales Negotiations With The French Requires Understanding Of Two Key Differences

Sales Negotiations With The French Requires Understanding Of Two Key Differences

So what is your view of the the French? Is your view of this magnificent county and its people shaped by those Inspector Clouseau movies that you used to watch while you were growing up? If it was, then it’s time to get over it and move on – they negotiate much differently than you do.

As with all things in sales negotiations, there is no right or wrong as long as you are able to eventually reach a successful conclusion to your sales negotiations. The trick when dealing with the French is to realize that they approach negotiations differently than either Americans or British do.

There are two key characteristics that every sales negotiator needs to know when dealing with French negotiators. The first is HOW they approach sales negotiations, and the second is HOW they view concessions.

In all honesty, we Americans always seem to be in a rush when we enter in to a negotiation – we work from the bottom up. We pick the first point, try to hammer out an agreement, and then move on to the next point. The French have a completely different approach – if I had to use a 50 cent word I’d call it a more “holistic” approach.

The French prefer to work on a sales negotiation from the top down. They’ll try to reach agreement on the basis of some broad principles first, and spend time working out the details. While they are working out the details, they will constantly refer back to the central agreement on the broad principles. Since you start from a point of agreement, it always seems like the rest of the work is just sorting out the details and that an agreement will eventually be reached.

When it comes to concessions, the French have a very strong sense of quid-pro-quo: they always want to get something in return. Unlike Americans, the French have no problems tying strings to their concessions – you are going to have to give something up if you want to get them to give in on a point.

There you have it, it is possible to reach a successful sales negotiation deal when the other side of the table is French. You just have to remember that their approach to the negotiation and to concessions will be different than yours and you are going to have to change to make the deal work out.

Have you ever had a chance to participate in a sales negotiation when the other side of the table was French? Did they seem to be approaching the negotiation in a top-down fashion? Did you end up giving up something every time they made a concession? Leave me a comment and let me know what you are thinking.

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