Negotiation: Strategy for Mutual Gain…

What’s your response to that time-tested negotiating classic-move? “We are all ready to sign this Master Agreement, right now; and we want to thank you for having invested four months with us to develop the terms. Now, the only thing I need you to do for me is to discount the final contract figure by 10% and it’s a done deal.”

If there’s one thing everybody knows about sales, it’s that serious negotiation starts when buyer and seller sit down together to close a deal; Right? Think aga…  In any successful negotiation, the real work begins long before either party comes to the table.

“When people hear the word ‘negotiation,’ they think ‘Oh, that happens at the end of the sales process,’” says ‘Grande Lum’, a nationally known authority on negotiation and author of “The Negotiation Fieldbook: Simple Strategies to Help You Negotiate Everything.”  In fact, he and other experts say, the best salespeople start thinking about negotiation much earlier–sometimes even before they’ve made the first contact.

Specifically, top performers prepare for those at-the-table talks by learning as much as possible about the other party’s needs and concerns. “You have to look for their underlying interests,” says Lum, “You need to understand what their personal motivators are, what they’re really after.”

Negotiation is not a destination that you reach at the end of a sale, nor is negotiation about one party winning and the other losing. Negotiation is part of each step of the sales process, not a one-time event. It begins prior to the first sales call and ends with customer recognition of the value your product or service brought to his business. Interests, options and deal-breakers..

Too often, salespeople don’t dig enough to find the customer’s real interests. They need to find out whether the client’s focus is around price, or around the terms and conditions or around something else.

In general the goal is to satisfy customers and provide them with services they consider valuable. When you negotiate from the very beginning of sales process, you uncover the buying organization’s interests and can therefore generate more creative options. You learn the criteria on which their interests are based, and you discover deal-breakers. You explore how both parties can win. Perhaps even more importantly, you discover if both parties can win; after all, it’s far better to lose quickly and exit the situation, thereby wasting fewer resources, than to lose slowly. Achieving the end goal

Additionally, since the end goal is repeating customers, there’s no advantage in creating a situation where you win and your client loses. If your negotiation leaves a bad taste in your customer’s mouth, it’s less likely that they’ll come back to you for more products or services. Conversely, by negotiating in a way that allows both parties to win, you set up an environment that is conducive to a long-term relationship. Incorporating negotiation into the early stages of a working sales process leads to deals–and client relationships–that are more mutually beneficial.

“Perhaps the most famous negotiation parable involves an argument over an orange. The most obvious approach was to simply cut it in half, each person getting a fair share. But, when the negotiators began talking to each other, exchanging information about their interests, a better solution to the problem became obvious.

The person wanting the orange for juice for breakfast took that part and the person wanting the rind for making marmalade took that part. Both sides ended up with more. Neither agreement is particularly creative. The parable of the orange becomes a story about creativity when both parties decide to cooperate in planting an orange tree or even an orchard.”

Getting to YES: The best-selling 1981 non-fiction book “Getting to YES: Negotiating Agreement Without Giving In” by ‘Roger Fisher’ and ‘William L. Ury’; focus on psychology of negotiation, i.e.; “principled negotiations”, finding acceptable compromise by determining which needs are fixed and which flexible for negotiators… “Getting to Yes” describes their method principled negotiations to reach an agreement whose success is judged by three criteria: 

  • It should produce a wise agreement if agreement is possible.
  • It should be efficient.
  • It should improve or at least not damage the relationship between the parties.

The authors argue that their method can be used in virtually any negotiation. Issues are decided upon by their merits and the goal is a win-win situation for both sides. Below is a summary of some of the key concepts from the book. The four steps of a principled negotiation are:

  • Separate the people from the problem
  • Focus on interests, not positions
  • Invent options for mutual gain
  • Insist on using objective criteria

In principled negotiations, negotiators are encouraged to take the view that all the participants are problem solvers rather than adversaries. The authors recommend that the goal should be to reach an outcome “efficiently and amicably.”