Planning to negotiate – what does it take?

Today, most sales people complain of being time poor. Time is finite but the demands on salespeople continue to grow inexorably.

The effect of this phenomenon is that too many sales people plan for the negotiation on the way to their client’s office. This is clearly dangerous and potentially very expensive.

It is commonly said that the higher the stakes, the more preparation required. In fact a good rule of thumb is 9:1. For every hour of negotiation expected, should see 9 hours of preparation.

What should I plan?
The key to effective negotiation is to get inside the heads of the people you are negotiating with. How do they view the deal, what is important to them, what are their goals, what do they have to trade that can assist us to meet our objectives?

Here is a list of the minimum things you should plan:

1. Your break point – at what price or degree of commercial outcome are you not prepared to proceed. You need to calculate this point and walk away once it is hit.
2. Their break point – wearing their shoes, what would be their worst case scenario?
3. The likely trading range is therefore between the two break points.
4. Your aim high open – where are you going to open? Usually this is beyond their break point, which is fine as we are only opening the negotiation. By opening high you give yourself lots of room to trade down, to give them a feeling of satisfaction and to keep you in a position of maximising your share of the bargaining range
5. Negotiable variables – do a map of all the relevant issues and what each item represents in terms of cost to us/value to them and equally what is the cost to them/value to us.
6. Likely moves – from your opening, what are the next variables you will table. The key with movements is to make them in ever decreasing increments.
7. Your team’s Roles – who on your team will play each role. It is generally better to negotiate as a team rather than individual as it is difficult to talk and think. Useful roles are:
   
   1. Spokesperson: who does the talking
   2. Numbers person: who tracks the movements and calculates the impacts, and
   3. Leader: who controls the climate and ensures cohesion between the team.
8. Their team – who will you be negotiating with, what are their styles and what is important to them?

So remember invest in your preparation, it really does pay dividends. As the stakes get bigger, invest 9 to 1 in planning.

Planning to negotiate – what does it take?

Today, most sales people complain of being time poor. Time is finite but the demands on salespeople continue to grow inexorably.

The effect of this phenomenon is that too many sales people plan for the negotiation on the way to their client’s office. This is clearly dangerous and potentially very expensive.

It is commonly said that the higher the stakes, the more preparation required. In fact a good rule of thumb is 9:1. For every hour of negotiation expected, should see 9 hours of preparation.

What should I plan?
The key to effective negotiation is to get inside the heads of the people you are negotiating with. How do they view the deal, what is important to them, what are their goals, what do they have to trade that can assist us to meet our objectives?

Here is a list of the minimum things you should plan:

1. Your break point – at what price or degree of commercial outcome are you not prepared to proceed. You need to calculate this point and walk away once it is hit.
2. Their break point – wearing their shoes, what would be their worst case scenario?
3. The likely trading range is therefore between the two break points.
4. Your aim high open – where are you going to open? Usually this is beyond their break point, which is fine as we are only opening the negotiation. By opening high you give yourself lots of room to trade down, to give them a feeling of satisfaction and to keep you in a position of maximising your share of the bargaining range
5. Negotiable variables – do a map of all the relevant issues and what each item represents in terms of cost to us/value to them and equally what is the cost to them/value to us.
6. Likely moves – from your opening, what are the next variables you will table. The key with movements is to make them in ever decreasing increments.
7. Your team’s Roles – who on your team will play each role. It is generally better to negotiate as a team rather than individual as it is difficult to talk and think. Useful roles are:
   
   1. Spokesperson: who does the talking
   2. Numbers person: who tracks the movements and calculates the impacts, and
   3. Leader: who controls the climate and ensures cohesion between the team.
8. Their team – who will you be negotiating with, what are their styles and what is important to them?

So remember invest in your preparation, it really does pay dividends. As the stakes get bigger, invest 9 to 1 in planning.

Selling v Negotiating – what is the difference?

Many salespeople don’t realise that selling and negotiation are very different phases in the sales process and require quite distinct approaches to ensure a successful outcome.

So what is the difference between these two critical business skills that so determine our sales success?

Let’s start with respective definitions:

Selling is the process of deciding whether or not we will do business.

This involves the salesperson helping the customer to gain awareness of their needs, wants, desires or problems then suggesting a compelling solution that will deliver an improvement in their utility. Strong, persuasive selling is usually characterised by developing rapport early, asking quality questions and delivering persuasive solutions that meet both their logical and emotional requirements.

The customer at this point either likes the solution and says yes, or they find some element of the sale to object to. Now we have an objection to deal with and the potential for negotiation.

Objection handling is about understanding what the customer does not like about the solution. Is it to do with price, specification, risk or outcome? Once we understand the customers view, it is the job of the salesperson to convert their view from a negative to a positive by reframing the value in the sale.

If the customer still wants to own the product or service, but does not like an element of the sale, this opens up the scope to negotiate.

Negotiation can therefore be defined as not whether or not we will do business, but about how we will do business. On what terms and conditions will the sale go ahead?

When negotiating you don’t need to persuade, you need to control, explore and trade components of the deal to create value for both sides. Do not sell when you negotiate, as it is a sign of weakness. It shows you don’t believe in the value of your proposal and it gives away valuable information to the other party. Your selling is done, so resist the urge to continue with it.

Negotiation requires discipline to do just one of three things:

1. Make proposals
2. Ask questions
3. Remain silent

There is no place for selling in negotiation so resist the urge to sell. Your focus should be on reshaping the components of the deal to help your customer realise their objectives, whilst ensuring you maximise your share of the value to be traded.