“In business, you don’t get what you deserve, you get what you negotiate.” ~Karrass, Chester L.
Selling Negotiation: The fundamental difference between selling and negotiation is that selling is a process to identify the fit between what the seller is offering and what the buyer is seeking. Negotiation is the process of agreeing the terms of the transaction and is part of the selling continuum. Yet the negotiation should only begin when there is a genuine commitment from the buyer and seller towards a conditional sale.
Excellent salespeople use the selling phase to lay the ground rules for a possible future negotiation by ensuring that they fully understand their prospect’s requirements and decision making process, while planting seeds and setting the tone for the negotiation phase. Always start with the end in mind: The benefits of a well-negotiated deal can have a major impact on bottom line profit. There are many different tactics that are commonly used in the selling and negotiation process.
All of them have their place, and many of the methods that have been popularized are specialized for specific types of negotiation. Just knowing the tactics is only half the battle, but putting them into effective use can be tricky if you do not know how to properly propose them. Keep emotion out of the negotiation: It’s not about the other person; it’s about meeting your objectives and maintaining on-going relationships.
In the article “How to Overcome the Top Ten Negotiating Tactics” by John Patrick Dolan writes: Everyone uses tactics, but that doesn’t mean that negotiations can’t be fair. Some tactics are acceptable, while others are downright sleazy. Tactics are part of the process, and you can use them and still maintain your negotiations on an honest level. In other words, the use of tactics doesn’t necessarily mean tricking or manipulating people.
Some tactics are simply tools to expedite the negotiation process; others are used to take advantage of the other person. To be successful in sales and business, you must be able to differentiate between the fair and unfair negotiation tactics so you can use the good ones to your advantage and deflect the questionable ones. Consider the following ten negotiation tactics:
- The Wince: The wince can be explained as any overt negative reaction to someone’s offer or counter-offer.
- Silence: Rather than wasting time in silence, restate your offer. Don’t make suggestions; just repeat your terms. This maneuver forces the other person to respond, and more often than not, they respond with a concession.
- Good Guy/Bad Guy Routine: If you find yourself in a good guy/bad guy situation, the best response is to ignore it. Recognize this game for what it is, but don’t play along and don’t allow the good guy to influence your decision.
- Limited Authority: So just because your counterpart tells you, “It’s out of my hands,” don’t automatically assume the person is being honest. In this type of situation, two options exist: one, ask to deal directly with this so-called higher authority; or two, test the limits of your counterpart.
- Red Herring: Red herring means one side brings up a minor point to distract the other side from the main issue. When your negotiation process is bogged down with a minor problem, and your counterpart insists on settling it before they’ll even talk about more important issues, then you are probably dealing with a red herring.
- Trial Balloon: Trial balloons are questions designed to assess your negotiating counterpart’s position without giving any clues about your plans.
- Low-Balling: Low-balling is the opposite of the trial balloon. Instead of tempting you to make the first offer, your counterpart will open the process with a fantastic offer. Then after you agree, they start hitting you with additional necessities.
- Bait-and-Switch: Similar to low-balling, the bait-and-switch tactic should be avoided. Your counterpart may try to attract your interests with one great offer, but then hook you with another mediocre one.
- Outrageous Behavior: Outrageous behavior can be categorized as any form of socially unacceptable conduct intended to force the other side to make a move, such as throwing a fit of anger or bursting into tears.
- Written Word: When terms of a deal are written out, they often seem non-negotiable. The best defense against this tactic is simply to question everything, whether it appears in writing or not.
In the article “Tactics Used in Business-to-Business Sales” by Kevin Davis writes: Not all customers practice win-win negotiating. Some buyers use a number of tactics to achieve greater concessions. Sometimes these tactics are just used as ploys to make you feel powerless and other times they reflect the customer’s reality. Concessions are an essential negotiating tool in business-to-business sales, but use them wisely. Consider the future impact of potential concessions. Make sure you get a concession for every one you give. Typical tactics include:
- Budget Limitation: “We’ve only got ‘x-dollars’. You’re going to have to come in under that figure to earn our business.”
- Other Options (Competition): “The quote from your competitor is for much less. If you don’t lower your price, I’ll have to buy from them.”
- Foggy Recall: “Didn’t you say installation was included in the purchase price? That’s what I told the committee. So there’s no way I can get any more money.”
- Good Guy/Bad Guy: One buyer tells the seller that the sale is a “sure thing,” then another buyer gets involved and says there’s no way the deal will get approved on the existing terms.
- Wince: When a price is quoted, the buyer winces or acts angry. The buyer may then become silent, waiting to see how the salesperson responds.
- Bait and Switch: The buyer requests a price on a large quantity of items, say 100 units. At the last minute, the buyer decides to buy 25 units per year for the next 4 years. Of course, the buyer still expects the 100-unit price, as if all units had been bought at once.
- Nibbling: The buyer makes small additional requests, either before or after a deal is done, such as “By the way, if you could give us an extra 5% off, it would really help my boss out and it will give you an advantage on our next purchase. What do you say?”
In the article “Negotiating Tactics or Trickery?” by Keith E Rowe writes: The focus is usually on the ‘tug-o war’ that takes place between seller and buyer, as they both strive to protect their share of diminishing margins. Irrespective of whether they are the buyer or seller, a genuine win/win outcome is really all about applying those skills in a friendly conversational manner, not unlike that same genuine interactive eye-to-eye contact they would enjoy with a friend or colleague…
They are quick to realize that they will need to come up with some sort of strategy to give them the edge, not necessarily unfair, but at least competitive. They are anxious to explore what common trickery they must learn to combat, and on a more positive note, what legitimate tactics they can use to gain the upper hand. A handy checklists that you might find useful in the form of a memorable acronym – NEGOTIATING:
- No must be an option – be prepared to walk
- Emotions must be controlled
- Get a concession for every one you give
- Organise your information – do your homework
- Talk with absolute conviction
- Invite the other party to present first
- Aim for the top with your expectation
- Timing is important – don’t rush the deal
- Information is critical – ask and listen
- Never ignore the other party’s needs
- Give pressure – don’t take it
The sales negotiation process can seem like a miserable chore when the parties involved resort to underhanded tactics and sneaky methods to get what they want. But one of the most important aspects of effective negotiation is that everyone leaves satisfied, not feeling like they’ve been swindled out of a good deal. To prevent this cheated feeling, you need to follow a strategy for your negotiations. No matter what you’re selling, or to whom, you need a reliable negotiation strategy that enables both parties to succeed in the deal.
Think of your strategy as your master plan, or systematic approach. Since any strategy is only as strong as the techniques and tactics you use, think of tactics as the tools for implementing your negotiation strategy. Without a solid strategy in place and the right tools for the job, you are likely to succumb to ineffective negotiation tactics and may end up losing sales or not getting the best outcome for you and your company. Keep in mind that the point of negotiation is to arrange the best deal for everyone, so ask plenty of questions.
Negotiation is a process of give-and-take for everyone involved. When you follow a strategy, you can focus on finding solutions, rather than winning a position. Most important, once you’ve completed the negotiation process, keep your word and follow through with the deal… As a salesperson, you naturally want your customer to be satisfied, but you also need to benefit from your hard work. When you use these strategies every time you negotiate a sale, both parties will come away pleased, and you’ll win more clients in the process. Win-Win should be the objective…
“Prepare by knowing your walk-away [conditions]… you need to have a walk-away… a combination of price, terms, and deliverables that represents the least you will accept. Without one, you have no negotiating road map.” ~Keiser