When do we use Negotiation?
When a selling process has not finalized a deal we begin Negotiation. It is used when all parties can see the benefits of the sale and want to land the business.
A good negotiator will ensure that both parties feel they have come away with a good deal. It is much better not to enter into negotiation. This can be achieved by ensuring that what you are selling is matched to their needs and they cannot do without it.
Give the buyer every reason to say Yes and every reason not to say No.
"Effective selling reduces the need to negotiate!" The most important area of negotiation is the preparation and this is where most of the work will be done in order to land the deal.
There are four critical areas of negotiation are in the preparation of the following :
1. Power
2. Wish Lists
3. Variables
4. Positioning
(1) Power . It’s in the mind and breeds confidence. We can only show power if we are confident on how we feel, look, act and what we say. Power is not about being domineering, complacent or arrogant. Knowledge is power and gives credence to what you do
(2) Wish Lists These fall into 3 separate groups
Essential - the minimum we need. Less than this is "no deal" as you are at the "walk away point."
Desired - the objective you set out to reach
Ideal - What dreams are made of.
You will need to consider everything that is on your wish list and also the value of it to your business and the value of it to the other parties business. Good negotiators will always try to pre-empt what is on the other party's wish list. This will enable you to pre-arm yourself and know what you may need to get back in return of their wishes.
(3) Variables
What is a variable? It is everything on your and their wish lists and that is available to be traded.
How do I use one? Identify them and ensure they are at your and their disposal. Evaluate them - High or Low cost to you and them
When do I use it? Don't offer them, only use them to bridge the gap. Remember always use the term If I do this for you, I will need this from you! "Never give anything without asking for something in return."
(4) Positioning. An opening position :- Consider the following as its imperative for a negotiation discussion to go well for both parties
Be believable
Have credit
Position on which you are prepared to negotiate
Always give yourself a position to maneuver
Remember they need to feel that they are getting a good deal! A good deal for both parties will be one that has longevity. Before trading any variables you need to clear in the preparation of where all the variables are positioned and where the gap is. Some other key points in negotiation to consider are;
AIM HIGH - OPENING POSITIONING - As you will always get knocked down.
EXPLORE THE LIMITS - see what is on offer.
GET THE WISH LIST OUT BEFORE NEGOTIATION - give them the understanding of what you expect to gain.
EXCHANGE VARIABLES - use your variables in order to gain what you want out of the negotiation.