Posts Tagged ‘concessions’

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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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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.

Click here to get automatic updates when
         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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3 Things Every Sales Negotiator Needs To Know

Tuesday, June 9th, 2009
Sales Negotiators Need To Learn How To Slow Things Down

Sales Negotiators Need To Learn How To Slow Things Down

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?

We’ve already talked about some of the things that master sales negotiators could teach us, and we’ve covered some of the secrets that they use to walk away with the results that they wanted.

However, let’s dive deeper – if we only had a few minutes to talk with a master sales negotiator, what would they want to share with us?

Buyers Need To Move Slower Than Sellers

Our sales negotiations are more often than not a game of back-and-forth: offers are followed by counteroffers which are then themselves countered. One thing that too many of us overlook is that the buyer’s first counter offer is one of the most important events in a sales negotiation.

Before the buyer makes a counteroffer, the buyer has no idea if there is any chance of striking a deal. The more the buyer goes on talking and doesn’t make a counteroffer, the greater the doubt in the seller will be. In fact, he/she may end up lowering their price just to get the buyer to make a counteroffer in the first place.

Learn To Say “Yes” Slooooowly

Sometimes, no matter what side of the table you are on, you’ll be presented with  a deal that is perfect just the way it stands. The price is right, the terms are good, and it meets your schedule. You are busy and have lots of other things to do – you want to say “yes” and move on to other things.

However, the master sales negotiators would caution you against doing this. It’s not that there is anything wrong with the deal, it’s just that you are going to leave the other side with a bad feeling about the negotiation. They are forever going to be filled with doubts about the deal (and they may do a poor job of keeping their part of the deal). However, if you say “no” a few times or at least take you time saying “yes”, then they will feel as though they “earned” the final outcome and this will, surprisingly, leave them feeling more satisfied.

Breakdowns – Good For Buyers, Bad For Sellers

Most of the time, the deal that we’re negotiating can be quite complex. In these cases it’s natural for the buyer to request a breakdown of the prices involved. This is an excellent way to get some insight into the seller’s costs.

On the other hand, providing such information is going to allow a buyer to do a better job of negotiating a lower price so sellers should work hard to not have to provide them. This can be impossible if they ask for it at point blank; however, trying to avoid ever getting into that situation is always a good plan.

Final Thoughts

As we’ve said before, the art of good sales negotiating does not rely on one single skill. Rather there are literally 1,000s of small details that if you can get them right, then you’ll turn into a force to be reckoned with during any sales negotiation. The three skills that we’ve discussed here will get you on your way to becoming a sales negotiating pro and will allow you to close better deals and close them quicker.

Questions For You

When you are buying something, do you ever have the strength to hold off on giving a quick counteroffer in order to strengthen your position? Have you ever been working on a deal when the other side presented you with the perfect offer? What did you do? Have you ever been able to avoid giving a cost breakdown after you had been asked for one? 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

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…

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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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