Negotiation is a key part of the sales process, especially when you are involved in a complex sale. The goal of a successful negotiation is to maximize the perceived value achieved by each of the participating parties. A good outcome will stand the test of time, promoting long term relationships and open communications.

These steps will help you improve your negotiation skills:

Preparation
Get ready for a negotiation by having a clear idea of what is important to you. Answer these questions:

What parts of the deal must be included and are non-negotiable?

What are your alternatives if this deal falls through?

At what point, or under what circumstances, will you know it is time to walk away from this deal?

Where is there some flexibility in the current deal? For example, what could you remove from the deal if asked to reduce the price?

What could you add to the deal, at a very low price to yourself, that the customer would consider valuable?

When you answer the questions, note reasons and information you are willing to share with the other party. For example, if something is non-negotiable, why is it important to you and why is it difficult to be flexible on this point?

Completing this exercise will give you a clear idea of what you want from the negotiation and should open your mind to possible scenarios.

Now set your responses aside, and repeat the exercise, giving your best guess as to how your customer will respond to each question. Once done, review both sets of answers. Look for places where agreement is likely. Look for gaps where compromise or creativity may be needed.

Negotiation
Set the tone for the negotiation with relaxed, good feelings. Let the other party know you want to reach an agreement and are prepared to listen and be creative as needed.

Start with the points that will likely be agreed to right away. Begin building an agreed-upon list.

Progress to points where more discussion is needed. For each of these points:

Listen carefully to what the other person is saying.

Ask questions to get to the reasons behind the words.

Calmly and clearly present your perspective.

Attempt to find an acceptable compromise using give and take.

Cycle through all of the points that need discussion and adjustment. As you reach agreement on each point, add it to your agreed-upon list.

Price
Price is almost always the final, and often most emotion-charged part of a negotiation. It does not have to be. You can handle it in either of two ways:

Include price as part of the discussion while building your agreed-upon list.

Quote your final price once the agreed-upon list is completed.

At this point you should have good rapport and open communication with your customer. He may still ask you to reduce the price "just because."

You may have some flexibility in the price and may be willing to give your customer a price reduction for no reason. This is not a good idea. If you do this, you are telling your customer that your first price was not your best offer. And you are training him to expect price reductions for the asking in future.

A better way to handle this situation is to go over the agreed-upon list and ask your customer what he is willing to give up in return for the price reduction. You can also turn this around and ask what he is willing to add. For example, a testimonial or case study may be quite valuable to you and will cost your customer very little.

While wrapping up the negotiation, remember:

Nothing is final until both parties agree on the entire deal.

Whenever you give something up, try to get something in return.

Once agreement is reached, quickly review the deal to make sure there are no misunderstandings.

Then, shake on it, document your agreement, and have a celebration.

After the Negotiation
Congratulate yourself and the other party for the good work you have done. Follow up with a big thank you and look for ways to continue and build your relationship. Let a little time pass, then revisit the work you did with your customer. Get feedback on what worked well and what can be improved. Be honest, be open, and always look to deliver great value. You will find that future business dealings become more productive and proceed more smoothly.