THE QUICK READ
• The aim of a negotiation is to mutually
benefit both parties by compromising
on matters of conflict
• Prior to negotiating, calculate your
best and worst alternatives to a
negotiated agreement
• Follow a process so that you can
monitor and manage whichever
stage of negotiations you are in and
know the next steps
• Preparation is critical to negotiating
positive outcomes, so research your
competition and customer needs,
and have areas you’re willing to be
flexible on – while knowing your
limits with regards how much you
can afford to concede
• To save a negotiation, ask more
questions and offer solutions to
needs that become apparent in the
answers you receive
• Confirm the exact details of the deal
verbally at the end of the meeting and
by email after the meeting to ensure
that both you and the other party
don’t have any ‘grey areas’ regarding
expectations.
to not buy the product at all, the cost to your
customer experience and potential future
revenue.
If you are the one making the sale, i.e.
selling to one of your customers, you need to
establish what the costs will be to you on all
levels if there is no deal. This includes losses
in revenue, time and reputation.
Follow a process
By following a process, you will be able to
monitor what stage of negotiations you
are in at any given time, and to employ
appropriate strategies to shift into the next
stage or move issues to a different stage of
the process. This structure enables you to
allocate time to each stage so that one topic
or issue does not take up the majority of the
meeting time.
For example, if the other party surprises
you with a large issue that does not have
an easy solution early on in the negotiation,
move it to the end of the agenda to ensure
that you have time to discuss other issues
and needs. Without this structure, it would
be very likely that the surprise issue could
take up the whole business meeting time.
This approach also gives you time during
the negotiation process to build rapport and
think of solutions to the problem before you
respond.
Prepare
Alexander Graham Bell once said ‘Before
anything else, preparation is the key to
success’. So, how best to prepare for a
successful negotiation?
Research your competition and customer
needs
If you have done your homework, you are
less likely to be hit with a surprise element
that could put you in a weaker position. For
example, if you are selling your services to a
large organisation and it becomes apparent
that a competitor has already pitched at a
lower price, it will make it difficult to negotiate
and show value against your competition if
you have not properly researched either your
rival or your prospective customer’s needs.
Researching other issues and needs
of the organisation beyond the core need
identified in your initial offer gives you the
knowledge to offer concessions and value-
add services or products to address more of
the organisation’s needs if they sign with you.
This may include research and awareness
on changes in their industry, regulations,
staffing and budget which may otherwise
not be revealed by the organisation during
the negotiation process.
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Have areas of flexibility
Good preparation includes knowing your
areas of flexibility. This means that when
the other party says no, or when you have
non-negotiables, you can offer concessions
in other areas to create more value in the
deal for the other party. Flexibility does not
mean giving in. A good negotiator will always
attach conditions and trade for things they
want in return for concessions.
Know your limits
Another important step in your preparation
is to know your walk away point. If you have
a corporate client who represents 40% of
your revenue, and whenever the client puts
pressure on price, you give in, this creates
an imbalanced business relationship that
cuts into your bottom line. Buyers know that
it costs nothing to ask for a concession, but
if your buyer is playing hardball, be careful
not to concede to outrageous customer
demands.
Sometimes, walking away and finding
smaller but more profitable clients to
generate the 40% revenue may be a better
option. This communicates to the corporate
client that you have limits and sets a
precedent for future negotiations.
Saving a negotiation
When you are in conflict, how do you save
the sale and maintain the relationship while
achieving your key objectives?
When you are in conflict with a customer
and they are not willing to buy what you
are offering, you don’t want to end up in a
‘take it or leave it’ situation. Never close any
doors: keep opening new doors with the
introduction of more variables. This might
be exposure to new product development
programs, marketing or training.
If your suggested options don’t appeal
to your customer, then instead of defending
yourself or attacking, ask the customer
questions to keep them talking and listen
to the answers. When you ask questions,
sometimes a new customer need is
identified that you weren’t previously
aware of, or an assumption you had made
is proven incorrect. It isn’t unusual to go
into a negotiation thinking you are offering
one service and coming out of it with a
signed deal offering a different service that
provides greater exposure and revenue for
your business.
Beware of deal creep
Sometimes when the other party keeps
asking for small concessions, it’s easy to say
yes when it will result in a larger, profitable