Negotiate to Win

Do you anticipate a client asking you for something in the near future? Are you prepared to ask for something in return? Sales are the business of relationships, and like any relationship it requires give-and-take. Typically we think of this give-and-take, a.k.a., negotiating, taking place around proposals and contracts. Yet, in fact, we negotiate throughout the sales process - on everything from picking a time to meet, to determining who will participate in a demo, to hashing out the terms and conditions of a contract. In any negotiating situation, your responsibility is to understand your prospect’s criteria -- as well as your own – and ethically create positive outcomes for all parties involved.

The process of negotiation involves a mutual discussion and arrangement of the terms of a transaction or agreement. One key to a successful negotiation is knowing when to negotiate. The negotiation process should start only after you have “sold” your product. That means that the sales person must confirm that the buyer is convinced that your product or service can address a critical business issue with enough impact to justify the decision.

The second key to a successful negotiation is leveraging the knowledge you have gained during the sales process. This knowledge is key to determining what your prospect will define as a winning outcome and how you can help them satisfy those requirements. Without that knowledge, you are guessing at best.

Once the client is in essence sold – it is time to get to the details regarding the exact deliverables and investment required. Sales professionals should categorize in their mind three different categories that could enter into the negotiation. Those categories are: Deliverables, Terms and Conditions, and Pricing. There are three different tactics you can apply in your negotiating strategy.

Tactic #1 – Trade-offs
Trade-offs should be used as your primary strategy. A trade-off is the process of exchanging one item for another of equal value. As you consider the areas that we are negotiating, price, terms and deliverables – you may be able to trade one category for another.

How will you know what things to trade-off? First, you must know what is important to the customer. Then, you must know what options you can offer. This information comes during the sales process. It also comes from your manager and company policies and practices. You should trade-off those things that meet the customer's needs and that differ from your proposal. You should also get something of equal value in return if the negotiation is to remain “balanced”.

Examples of trade-offs include:

• More favorable payment terms for a reduced price
• Additional terms, such as reference account, for a better payment term

Tactic #2 – Embellishments
Trade-offs cannot be used if you are unwilling or unable to meet a specific customer want. In these situations, use an embellishment or a compromise. An embellishment allows you to "sweeten the deal" for the customer by offering something additional to the initial proposal that makes it more acceptable while maintaining the range of the original balance. For instance, you may throw in deliverables that have little cost to you but are of a large value to the prospect. How it might sound: “If I am able to offer an additional training seat for this software package, would you be willing to commit to the full number of user licenses?”

Tactic #3 - Compromise
A compromise can be used when a trade-off cannot be made and both parties have to "give up a little" on an aspect of the proposal in which the customer has the need. It involves finding the middle ground in the same category. Splitting the difference on price, payment terms, or a specific deliverable could be examples. Such as: “If we can split the difference, can we move forward?”

There are a few other key points to remember when negotiating with prospects. First, be sure you understand the “need” behind your prospect’s position. Second, know your empowerment level; you could find yourself in dangerous territory with either your company or prospect if you commit to things that are outside of your span of control. Third, maintain composure; respond rather than react and maintain a high level of rapport every step of the way. Finally, know your “walk-away” position; some deals are simply not worth what you are being asked to give up.

Some concepts you can immediately apply to ensure that you successfully overcome your prospect’s objections:

• Don’t Panic – If your prospect raises and objection, consider it an opportunity to clarify and reassure.
• Clarify for Clarity – Use the Open-Probe-Confirm process to identify the root of your prospect’s objection.
• Diagnose the problem – Before you can address the objection, you need to understand which area of the ValueSelling Framework®is lacking or weak.
• Create a Positive Outcome – Once you’ve clearly diagnosed your prospect’s motivation, use negotiation to increase their comfort level and mitigate their fear of risk.

Negotiating to win requires the art of preparation and strong communication skills. With these skills and utilizing the tactics and key points mentioned above, while keeping the ultimate goal in mind – a positive outcome for both parties – you will increase your potential for successful outcomes by making your sales close faster and reduce the number of stalled decisions.

To learn more about how to negotiate to win, take advantage of the ValueSelling Essentials Negotiating course. Visit our website at www.valueselling.com, or click here.