Posts Tagged ‘how to deal’

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Even More Giving: 5 More Ways Sales Negotiators Can Use Concessions

Tuesday, March 31st, 2009
Sales Negotiators Know How To Use Concessions

Sales Negotiators Know How To Use Concessions

You can never say it too many times: in order to reach an agreement with the other side during a sales negotiation, you ALWAYS have to make some sort of concession(s). The trick to doing this correctly is to make sure that you don’t make so many concessions that when a deal is struck that you’re left feeling that you didn’t get a good deal.

Once upon a time I was in the process of moving to start a new job and had to sell my house. I had found an interested buyer and we were in the processing of negotiating a selling price. We had gotten pretty close to an agreement, but we were not quite there.

I knew that all of the appliances in the house were pretty much on their last legs, and I was concerned that the buyer was going to ask me to replace them as a part of the deal. I has already moved so that would have been a big inconvenience to contract out the work, oversee it, and pay for it. However, the buyer only came back and asked me to replace the hot water heaters. I negotiated just paying him cash to have him take care of it and then we were able to strike a deal.

[Editors Note: I later found out that he pocketed the cash that I gave him, didn't fix the hot water heaters which were in the attic, and shortly thereafter they failed and flooded the house. Ouch - there's a lesson in there somewhere]

Here are few additional guidelines on how to make concessions work for you during your next sales negotiation:

  1. Try to not negotiate using so-called “funny money” – taxes, credit cards, monthly payments, and interest rates. Stick to the real stuff that everyone understands.
  2. Understand and use the power of the word “no”. All too many sales negotiators are afraid to use this word. If you use it over and over again, eventually the other side will come to believe that you really mean it. Persistence pays!
  3. In the heat of a sales negotiation, it can be easy to lose track of what really matters to you. Make sure that you keep a list of what’s important to you (and what’s important to the other side) and look at it often.
  4. If you make a concession that you later on decide was a bad idea, have the courage to step back from that concession. Remember that until the sale is signed for, everything can be re-negotiated. Not stepping back from a previous concession because of pride is one of the biggest mistakes that you can make.
  5. Throttle the other side’s expectations. You are in charge of how many concessions you make and how fast you make them. If you give too much away too soon, then the other side will start to expect even more.

When you negotiate, which of these suggestions do you think is the most important? Did I leave anything off of my list? Should anything be removed from the list? Leave me a comment and let me know what you are thinking.

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Giving To Get: How A Sales Negotiator Makes Concessions

Tuesday, March 24th, 2009
Concessions Are A Powerful Negotiation Tool - Learn To Use Them Correctly!

Concessions Are A Powerful Negotiation Tool - Learn To Use Them Correctly!

Sales negotiating is all about concessions. You make them, the other side makes them. Finally, if enough has been given, then you should be able to reach a common middle ground where a deal can be struck.

The trick is knowing how and when you should make your concessions. Here are some tips from the pros to make sure that you do it correctly:

  1. Plenty of Room: Make sure that you always give yourself plenty of room to negotiate. Simple things like starting with a high price or a lengthy delivery cycle will buy you the room to make concessions during the negotiations.
  2. Hide Your Cards: You always want to work to make the other side of the table open up and put all of his cards on the table long before you have to do the same. You should keep your motivations and goals hidden from view in order to maintain your negotiating power.
  3. Be Second: Never make a major concession first. Once again this is a power thing. Instead, make minor concessions until the cows come home.
  4. Make ‘Em Earn It: Never make a concession without making the other side earn it first. If they don’t earn it, then they won’t appreciate the concession when you give it to them.
  5. Wait: Make sure that you hold on to your concessions for as long as you can. Giving in later in the negotiation is always better than earlier – and the other side will appreciate it more (see #4).
  6. No Tit-For-Tat: it turns out that tit-for-tat or one-for-one concessions are not necessary. It’s ok if the other side gives more than you do.
  7. Gimme: Make sure that you get something for every concession that you make.
  8. Empty Boxes: Give concessions that really give nothing away from your point of view.
  9. Words: Getting the other side to say “I’ll consider it” is one form of a concession.
  10. Promises: Just like in #9, getting the other side to make a promise is yet another form of having them make a concession.

When you negotiate, which of these suggestions do you think is the most important? Did I leave anything off of my list? Should anything be removed from the list? Leave me a comment and let me know what you are thinking.

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A Sales Negotiator’s Friend: “Just The Facts, M’am”

Tuesday, March 17th, 2009
Sales Negotiators Should Not Be Afraid Of Facts & Stats - They Are Just Here To Help!

Sales Negotiators Should Not Be Afraid Of Facts & Stats - They Are Just Here To Help!

So there you are, getting ready to fire up your side of a sales deal when all of a sudden you get hit with a volley of facts, averages, and statistics. You’re hit! Each one of those figures came with a sharp point that has embedded itself, perhaps fatally, into your arguments. Is there any way that you can survive?

Good news, the answer is yes. It turns out that these powerful negotiating weapons: facts, averages, and statistics are ALWAYS negotiable. We have trial lawyers to thank for showing us the way. The key here is not to argue with the numbers themselves, but rather dispute what lies behind the numbers.

Questions that a good salesperson will ask right off the bat after being attacked with numbers include:

  1. Who collected these numbers?
  2. What sources did they use to get the numbers?
  3. What techniques did they use to collect the numbers?
  4. Were there any assumptions used when collecting the numbers?
  5. Why were the numbers collected in the first place?
  6. What values were hidden behind the numbers?
  7. Were there any biases that might have influenced the collection?

A key point to always remember is that any facts, statistics, or averages are always based on things that have happened in the past. What you are in the process of trying to do is to negotiate a deal that will live in the future.

One final point is to not allow yourself to get too worried by statistics or averages. They are just ways of trying to be able to talk about large amounts of data. The most important thing to remember here is that by their very definition, statistics and averages really don’t apply to anyone including you.

Have you ever been trying to work a deal when the other side suddenly whipped out a bunch of numbers? What was your reaction? What did you do next? Did the numbers end up influencing how the deal came out? Leave me a comment and let me know what you are thinking.

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How Sales Negotiators Can Defend Against The Good Cop / Bad Cop Tactic

Tuesday, March 10th, 2009
Sales Negotiators Need To Have A Defense Against The Good Cop / Bad Cop Tactic

Sales Negotiators Need To Have A Defense Against The Good Cop / Bad Cop Tactic

I like movies. I especially like police movies. I’m guessing that one of the reasons that I like movies with police in them so much is because it’s almost a given that sometime during the movie the police heroes will resort to using the “Good Cop / Bad Cop” negotiating tactic. Every sales negotiator out there should be smiling right about now…

I guess I should take just a moment and make sure that we’re all on the same page here. The Good Cop / Bad Cop tactic is a decoy tactic and here’s how it works. The other side has at least two people. One takes a hard line and makes unreasonable demands on you. He / she also appears to be unyielding – you’ll get no concessions from them. The other person is much nicer. He / she is willing to be your friend, is a little embarrassed about his / her partner’s hard stand, and just wants to work with you to reach a deal.

Umm, the key thing to realize here is that you’re being presented with a show: both of these people are working together. They hoping to get as much out of you as possible. The goal is to get you to believe that you were lucky to get as much as you did considering just how tough the “bad cop” was.

So what’s a sales negotiator to do when you come up against a good cop / bad cop team? There are some simple ways to deal with the bad cop:

  1. Let the bad cop talk and talk. In many cases his / her own side of the table will end up getting fed up with them.
  2. Hit the big red button and complain to your / their higher authority.
  3. Leave! (This always gets their attention)
  4. Turn the tables and in public put the blame on the other side of the table for the failure to make more progress in the negotiations.
  5. Bring your own good cop / bad cop to the table.

Have you ever encountered a good cop / bad cop team when you’ve been negotiating a sale? How bad was the bad cop? How good was the good cop? How did you counter this tactic? Did the tactic work on you? Leave me a comment and let me know what you are thinking.

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No Authority / Full Authority Sales Negotiations

Tuesday, March 3rd, 2009
Lacking Authority Can Leave Sales Professionals Feeling Naked In A Negotiation

Lacking Authority Can Leave Sales Professionals Feeling Naked In A Negotiation

Sales professionals really don’t like to enter into a negotiation naked. When you don’t have any authority to make concessions, you basically feel pretty naked.  Likewise, if you have full authority, then you’ve got a whole other set of problems.

Back to the poor sales negotiator who has no authority. Hold on a minute, they actually do have a lot of authority. Here’s what they have:

  • the authority to collect information and represent the other side of the table back within his organization.
  • the authority to attempt to create a “both win” type of negotiation.
  • the authority to establish both support and commitment with the other side of the table.
  • the authority to deal with different members of his organization in the role of a specialist.
  • the authority to try to reach a deal on a personal level.

The sales professional is really only prevented from giving in to any of the other side’s demands. Since he / she still has the ability to negotiate, it’s worth the effort because there is the possibility that the other side will make concessions and a deal can be struck, or at least valuable information about the other side will be collected.

If you’ve ever been in a no authority sales negotiation situation, then you’ve probably dreamed of having the ability of being in a sales negotiation where you had full authority. Careful what you wish for – this isn’t all that it’s cracked up to be.

The reason that full authority is not necessarily what you either want or need is because the name is actually misleading. Full authority simply means that whatever you agree to is what your  side of the table will end up having to do. This can lead to disaster. Here are some reasons why you might not want to have full authority when you enter a negotiation:

  1. Both sides of the table may not have equal authority.
  2. Both sides of the table may differ in stamina or physical qualities.
  3. Either side may not be properly prepared.
  4. Either side may be role playing.
  5. A side may be more secure than the other.
  6. A side may be busier than the other.
  7. A side might be more wealthy than the other.
  8. A side might be more emotionally involved than the other.
  9. Either side may have better support staff.

Should you find yourself in a sales negotiation with full authority, all is not lost. There are several ways that you can get out of this predicament. Here are a couple of suggestions:

  • Say that you are not familiar with how things operate.
  • Indicate that you will need to check with the board of directors.
  • State that there is a legal problem.
  • State that you need to check with a government agency.
  • Say that this may involve anti-trust issues.
  • Indicate that this deal actually depends on another deal that is currently being negotiated separately.
  • State that you have to tell your coworker / partner.

If none of these “escape” techniques work for you, you can always fall back on the old reliable – “I don’t know”. You may feel foolish for saying it, but at least you won’t end up negotiating a bad deal.

Have you ever entered into a negotiation with no ability to make concessions? How did you feel? How did that negotiation turn out? Have you ever had full authority in a negotiation? How did that turn out? Leave me a comment and let me know what you are thinking.

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