Posts Tagged ‘negotiating skills’

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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.

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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…

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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.

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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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Can Sales Negotiation Be Done Via Email and Text?

Tuesday, May 26th, 2009
Email Is A Powerful Tool, But Is It The Right Tool For Sales Negotiations?

Email Is A Powerful Tool, But Is It The Right Tool For Sales Negotiations?

I might be setting off a bit of a firestorm with this idea, but here in the 21st Century do you think that it is possible to conduct sales negotiations using more smart phones and less human contact?

The Need For Modern Solutions

The #1 attraction of using a smart phone (Blackberry, iPhone, or whatever) in the first place is that it can speed just about anything up. The immediacy of e-communications allows deals to develop quicker and to move at speeds that once were unimaginable. However, when it comes to sales negotiations, things can get a bit trickier.

What we are all just starting to deal with here are the questions that come up surrounding e-mail negotiations. Some of these questions include:

  • Is it possible to conduct sales negotiations completely via email?
  • What impact does this have on what kinds of information can be shared during the sales negotiation?
  • When is human contact called for?

The New Rules

Using email as a central part of any sales negotiation changes a number of things. The first is that anything that you put into an email will live forever and may come back to haunt you. It is a great way to send information to the other side, keep almost perfect records, and make sure that everyone involved is informed on where things stand.

At the same time there are pitfalls that everyone must be aware of. These tend to show up whenever there are conflicts or misunderstands. The problems come about because the one thing that email does not do well is communicate emotions or nuances.

So what are the “new rules” in this world of email supported sales negotiations? Here are a few of them:

  1. Slow Down: do not write and send emails on the fly. Remember, these things live forever. I prefer to write the email one day, save it, re-read it the next day and then send it. I’m always careful to leave the “To:” field blank while I’m composing an email JUST IN CASE the “send” key get pressed too early.
  2. Only You Can Prevent Forest Fires: in order to prevent those cases where misunderstandings start small but keep getting blown out of proportion, don’t use ALL CAPITAL LETTERS, multiple !!!!!, or including flip comments (“How about making a real counteroffer?”).
  3. Don’t Forget The Phone: In every sales negotiation, there will probably be a time in which it would be better if you picked up the phone and talked with the other side instead of sending them another email. Realize that this moment exists, look for it, and act when it shows up.

Lessons Learned

The take-away from all of this is that times are changing. Gone are the days that all sales negotiations could take place face to face. Negotiating via email is here to stay and we all need to get used to the new rules of the game.

The experts who have been living with this new way of doing business have one final suggestion for all of us. They recommend that prior to starting the negotiating process, all parties meet in person. This is the key to allowing everyone to understand their body language and how they react to things. In the end, this is critical so that you can understand the true intent behind the words in their emails.

Do you negotiate via email today? Has there ever been a miscommunication caused by email? What caused the problem? How was it resolved? Leave me a comment and let me know what you are thinking.

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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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Japanese Sales Negotiation Secrets

Tuesday, April 21st, 2009

Sales Negotiations With Japanese Partners Require New Skills

Sales Negotiations With Japanese Partners Require New Skills

All too often Americans (like me) think that we know everything. The reality is that our society has only been around for a bit over 200 years and we’re just getting started. That’s why it can be valuable for a sales negotiator to take a look at how societies that have been around for 1,000′s of years negotiate. Like, say, Japan…

The U.S. really started to take a look at how we dealt Japan in the 1980′s when trade between our countries exploded. What people quickly realized is that both sides of the table were fundamentally different. There for the first decade or so, U.S. sales negotiators were getting taken to the bank more often than not because the Japanese sales negotiators were doing a better job.

Over time HOW these negotiations were being conducted was closely studied. Three techniques quickly became apparent:

  1. Considered Response / Respectful Silence: when Japanese sales negotiators are on the other side of the table, be prepared to sit quietly. Western sales negotiators don’t know what to do when nobody is talking – and the Japanese know this. They can sit, work out math problems, draw in long breaths, etc. and say nothing for minutes at a time. This is all designed to get you to become flustered and give in on a point or say something that you shouldn’t say.
  2. KAN – “Seeking Heavenly Approval”: Western sales negotiators like to focus on the here and now. Japanese sales negotiators realize that this deal is just part of a much bigger relationship. After the details of the agreement have been worked out and it appears as though you are close to closing the deal, members of the Japanese team will pause. They will consider if they really want to do this deal with you – is it going to be worth it in the long run, or are you just going to be too much of a hassle to deal with? This moment is called KAN – reaching “heavenly approval”.
  3. Time & Money: the Japanese view the sales negotiation process differently than their Western partners do. We in the west see it as something to race through and quickly get done with. The Japanese view it as something to be nurtured. They set aside enough time to do it properly. They resist attempts to wrap it up quickly. They will revisit points over and over again in order to test your resolve. This is how Japanese sales negotiators turn time into money.

It is entirely possible to enter into sales negotiations with Japanese partners on the other side of the table and come out with an agreement that you feel good about. However, you need to fully understand how they see the world and adjust your sales negotiating style to this situation.

Have you ever had a chance to negotiate with a Japanese team? Were there long, uncomfortable periods of silence? Did they seem to slow things down and do more thinking as the end of the negotiations approached? Did you remember to budget enough time for the negotiation or did they budget more time than you had? Leave me a comment and let me know what you are thinking.

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