Posts Tagged ‘seller’

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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.

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

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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Haggling Is Becoming A Part Of Every Sales Deal

Tuesday, August 18th, 2009

Haggling Is Becoming A Part Of Every Sales Deal <div xmlns:cc="http://creativecommons.org/ns#" about="http://www.flickr.com/photos/17537227@N00/2424796243"><a rel="cc:attributionURL" href=Welcome to the new world order: consumers are learning to haggle. In the extended global economic recession, consumers who never used to even think about bargaining are suddenly starting to haggle over every deal. Is this a good thing or a bad thing?

What Businesses Are Being Hit?

As you might expect, haggling has arrived first at the firms that have been the hardest hit by the recession. This includes the hotel business as well as clothes and electronics stores. All three of these firms are very interested in moving merchandise as quickly as possible. That’s why they are now open to making deals with their customers.

The market research firm America’s Research Group has just completed a study that shows that 72% of American consumers reported that they had haggled in the past four months. This is up from 56% just a year ago. What’s really telling is that the same consumers report that they have been successful in getting a better deal 80% of the time.

Different Approaches Seem To Be Working

Consumers are discovering that negotiating for a better deal seems to work with just about any business transaction. Formerly off-limits firms including the New York Plaza hotel and Nordstrom are starting to warm to the idea of having their customers bargain with them for the best deal.

Customers are finding that they may not always be able to get a discount on an item that they are interested in buying. However, getting the seller to cover shipping or the sales tax seems to work. If that fails, then having the seller include an additional item in order to complete the deal has also proven to be successful.

Secrets To Successful Haggling

Many firms are creating programs to deal with consumers who want a better deal. However, in order to protect their margins, they are not advertising these programs – they only offer them when the consumer pushes them.

Credit card companies are notorious for doing this. They are willing to negotiate on interest rates and late fees. However, the only way customers can find out where the companies are flexible are by asking.

Final Thoughts

The arrival of the new style of haggling for better deals is showing up in the hardest hit industries: cars, real estate, etc. However, we should expect this to spread quickly to other industries.

The big question will be whether or not this marks a fundamental change in how consumers go shopping: are they going to expect to have to bargain for everything in the future? No matter what the answer is, in the short term this type of sales negotiating is bound to boost sales. Sales negotiators who learn how to take advantage of this new style of buying will be able to close better deals and close them quicker.

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

What We’ll Be Talking About Next Time

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. 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…

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Sales Negotiation Tips From Brian Dietmeyer

Tuesday, July 28th, 2009
Brian Dietmeyer Has Some Reminders About Good Sales Negotiation Skills

Brian Dietmeyer Has Some Reminders About Good Sales Negotiation Skills

The basics of sales negotiations are pretty straightforward; however, it can be easy to lose sight of them as we talk about tactics, preparation, and detailed sales negotiation skills. Maybe it’s time that we took a step back and got an expert to remind us about what we really need to be doing in our next sales negotiation?

Introducing Brian Dietmeyer

Brian Dietmeyer is the President / CEO of a company called Think! that offers business-to-business negotiation training. He’s also written a book called Strategic Negotiation: A Breakthrough Four-Step Process for Effective Business Negotiation.

Awhile ago Brian sat down with the folks over at SellingPower magazine and went over the fundamental things that we all have to remember when we start a sales negotiation. He does a pretty good job of hitting most of the bases.

The video included below (sorry RSS readers, I think that you’re going to have to visit the blog to see the video) is only about 5 minutes long. Brian does a good job of pointing out three things:

  • How to reach an agreement with someone who is NOT an agreeable person.
  • The importance of facts and data in any sales negotiation.
  • The role of greed & fear in a sales negotiation.

Brian is, of course, trying to sell himself, his company, and his book but he only does this briefly about halfway through the video – it’s still a good video.

A 5-Minute Sales Negotiation Interview With Brian Dietmeyer

Questions For You

Do you agree with Brian – would having the right facts & data allow you to reach an agreement with a difficult customer? Do you think people’s fear of sales negotiations comes from the fact that they are afraid that they don’t have the right data? Do you think the 3 offer technique would work for you? 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

So this time around, we’re going to do things just a bit differently. There’s a video that has been going around on YouTube that does a pretty classic job of capturing just how ridiculous negotiating between vendors and clients can be.

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Real Deals Use Real Money And Sales Negotiators Never Forget It

Tuesday, July 21st, 2009
Although Funny Money May Look Like Real Money, It Isn't! (c) - gaymay

Although Funny Money May Look Like Real Money, It Isn't...! (c) - flickr / gaymay

My daughter is currently learning about how to add fractions in school. The trick to doing this right is that you have to make sure that the denominator (the number on the bottom of the fraction) is the same for both numbers before you add them. She’s struggling with this concept and it reminds me of a key sales negotiating point – never try to do a deal using funny money.

Just What Is Funny Money?

We all have heard the phrase “apples to apples” right? Well funny money is something that can either sneak into a sales negotiation or be slid into it by one side of the table. When this happens, all of a sudden you aren’t comparing two equal things such as how much a product costs and how much you are willing to pay for it. Instead, all of a sudden you’ve got apples, oranges, and bananas on the table in front of you.

A great example of funny money in real life is what happens when you gamble in a casino: you don’t use real money, you use chips instead. There are a number of reasons for this, but a key one is that chips don’t “seem” like real money. That allows us to gamble more and not feel as bad when they all go away (although it still hurts when we get the bill later on!)

Examples Of Funny Money In Sales Negotiations

Whether intentionally or not, funny money can slip into just about any sales negotiation. It’s the careful negotiator who keeps his / her eyes open and spots it when it shows up. Here are a few examples of what funny money can look like:

  • Price Per Unit: If I’m asking you to lower your blue widget price by two cents per unit, that seems like a small matter, right? It is until you realize that I’m trying to buy two million blue widgets and so what I’m really asking for is a $40,000 discount. Now that’s real money!
  • Price Per Lot: This is the flip side of the previous tactic. If I’m laying mulch in my yard and you tell me that you’ll sell me 10 bags of mulch for $20, that sounds like a fair deal. Until I realize that since I need 200 bags of mulch, we’re really talking about me paying you $400 for mulch. The total quantity needed and its price is what we need to negotiate.
  • Interest Rates: This is exactly what built those credit card companies into the powerhouses that they are today. If I borrow $60,000 at 10% on a 5-year loan to start my business, then I’ve just agreed to pay the bank $16,489.20 for the privilege of using their money. Sure seems like I should try to negotiate a lower interest rate.

Final Thoughts

It is the job of every sales negotiator to train yourself to always be asking the question: what is that worth. Just like my daughter is trying to learn to remember that she always needs to convert the denominator of two fractions to the same value, so too do sales negotiators need to learn to always “map” funny money to real values.

No matter what the other side of the table says, always take the time to translate funny money into real dollars and cents (or whatever currency you are using). If you don’t take the time to do this, you run the risk of making a bigger concession than you intended to. Learn to deal with funny money correctly and this will allow you to close better deals and close them quicker.

Questions For You

Have you ever been in a sales negotiation that included funny money? What form did the funny money take? How did it get into the negotiation? Did you take the time to map it to real money? Did you end up making a larger concession than you would have if you had been dealing with “real” money? 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

The basics of sales negotiations are pretty straightforward; however, it can be easy to lose sight of them as we talk about tactics, preparation, and detailed sales negotiation skills. Maybe it’s time that we took a step back and got an expert to remind us about what we really need to be doing in our next sales negotiation?

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Don’t Believe What Anyone Says Is What Sales Negotiators Need To Learn To Do

Tuesday, July 7th, 2009
Sales Negotiators Need To Know When To Hold The Truth - And When To Fold

Sales Negotiators Need To Know When To Hold The Truth - And When To Fold

People are either honest or they aren’t right? Umm, well not exactly. Look, in a sales negotiation everything is not as it seems. I hate to use strong words like “lying” or anything like that, but let’s just say that a healthy dose of skepticism is often a sales negotiator’s best friend.

What’s Going On Here – Can’t Anyone Tell The Truth?

The older a sales negotiator gets, the more he / she is less likely to believe just about ANYTHING that they are told. There is a reason for this! In the end, sales negotiating is all about power – who has it and who doesn’t. However, just like in the game of poker bluffing is not only allowed, it is often encouraged.

If you don’t believe me (or you don’t WANT to believe me), then think about how a buyer and a seller interact when they are trying to complete a deal to buy a house – talk about some serious poker playing!

Where Do The LInes Get Drawn?

We are in a very murky area here and it’s very easy for a sales negotiator to stumble over the line and fall into the dark side – becoming a flat-out lier. It’s necessary that you operate here, but you’ve got to watch your step.

Our house buyer / seller are going to be presenting information that may not quite be the complete truth. The house seller is going to be talking about all of the things that make the house a fantastic house – and leaving out any discussion about the leaky pipes in the basement and the squirrels that have set up a home in the attic.

Likewise the buyer is going to be trying to mask any real interest that he / she may have in buying this particular house. Additionally, the buyer will be working hard to NOT communicate how much funding he / she has to complete the purchase. Is anyone lying here? No – but they are also not telling the complete truth.

One Word – Be Skeptical

A good sales negotiator is ALWAYS skeptical about anything that he / she is told by the other side. This includes when the other side uses facts & figures (where did they come from?), experts (what makes them an expert?), and handsome bound color documents (Kinko’s can turn out great stuff overnight).

As a sales negotiator your job is to always be asking questions. Take nothing at face value and always assume that the other side is probably not giving you the complete story. This is how you are are going to transfer power from the other side to you.

Final Thoughts

Being a “doubting Thomas” is a great skill for a sales negotiator to have. One important rule of life has been give to us by the Las Vegas board of tourism: “What happens during a Sales Negotiation, stays in the negotiation.” This means that you can’t have any hard feelings about what information the other side revealed (or didn’t) during the negotiation after it is all over and done. Having a healthy dose of doubt while negotiating will allow you to close better deals and close them quicker.

Questions For You

Have you ever accepted anything that the other side has told you at face value during a  sales negotiation? Did it turn out to be completely true? Have you ever been fooled by the other side? Have you ever stretched the truth during a sales negotiation? How did the other side use the information that you gave them? 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

We all hear so much about the smooth Donald Trumps of the world that we can fall in to the belief that everyone shows up for a sales negotiation better prepared than we are. Nothing could be further from the truth. In fact, there are four common sales negotiation mistakes that even really smart people make all the time. Are you making any of them?

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