Always Be Prepared to Negotiate! Seven Techniques to Success7 Dec, 2004 By: Steven Power imageSource
Always Be Prepared to Negotiate! Seven Techniques to Success
In more than 25 years in sales,
I’ve learned that the deeper your rapport is with your prospect, and the more
consultative and collaborative your sales process, the more your prospect will
view you as an advocate. That being said, I’ve also learned that no matter how
solid of a relationship you have formed with a prospect, negotiation will be
necessary at the end of every customer engagement. I, however, view negotiation
as a favorable part of the process. After all, it is the closing.
One of the first things you must
understand is that for many decision makers, especially trained professionals in
finance or purchasing, negotiation is a requirement of the job. Their
organizations have stated policies mandating that no agreement will be entered
into without making the best effort to secure the best price, terms and value
possible. Many organizations provide their decision makers with professional
training in negotiation skills and processes to this end. It’s simply good
The point is that both you and
your prospect have a job to do. You’ll have to go through a process and work
together to meet in the middle. In my experience, the following negotiation
techniques help accelerate the process and assure a successful outcome for both
1. Let the other party go
first—By allowing the other party to go first you know how far apart you are
before you make your concession or counteroffer. I’ve been shocked many times at
the responses I’ve heard once prospects volunteer their positions. Countless
times I’ve encountered prospects who were agreeable with the price, but simply
wanted more favorable terms or slightly more value added to the deal.
2. Acknowledge the other
party’s point—This is a simple technique taught in every high school debate
class. Instead of lunging into your own response, recognize the other person’s
position by simply saying, "I see your point and understand that your job is to
secure the best possible deal for your organization."
3. Confirm and isolate the
prospect’s point—To make sure that there are no new cards to be played, simply
ask, "If we can settle on this issue of cost-per-copy (for example), are you
prepared to take the final step?"
4. Articulate your value
proposition—Here you must build your business case for how you determined your
price. You must restate the value and the benefits the prospect achieves in
exchange for this price. In other words, acknowledge your value and tell the
prospect why you’re worth it. You must engage and educate prospects and get them
to acknowledge the overall value of your proposal.
5. Graciously decline
unacceptable offers—You can say, "Based on what I just presented, I appreciate,
but can’t accept, your proposal. I would, however, like to present a
counteroffer because I think we’re getting close."
6. Present your counteroffer—If
you’ve left yourself some room and you’re close to a win/win settlement, it’s
time to close the deal. Remember, your prospect has a job to do and this is
simply part of the process. At this point, present your counteroffer,
acknowledging what adjustments in price, terms or added value you are willing to
exchange for a favorable decision now. Let’s say that you’re not far from a fair
deal and you’ve left yourself some wiggle room, knowing that negotiation was
inevitable or at least probable. In many cases it comes down to both parties
meeting in the middle.
In an effort to have your
prospect come halfway, try this: "I realize you have a job to do for your
organization, and that is to get the best possible overall value. I have that
same job at my organization, and that’s to arrive at the best possible
transaction. Most people I work with in your position are fair-minded. When I
offer to meet them in the middle, they see that offer as fair. Will you come
halfway so that we can shake hands in the middle?"
7. Know when to walk—I
guarantee that eight out of 10 times meeting in the middle will work for both
you and your prospect. But it’s not a perfect world, so two times out of 10
you’ll run into buyers who believe that you must lose in order for them to win.
They not only refuse to meet you in the middle, they will grind you for the best
price, dictate the terms, plus tell you how to run your business. There are
times you need to know when to call a time out, and times you need to know when
to walk out.
Before I walk out, I like to
call a time out or stage a "take-away" close. A take-away is when you pull the
proposal off the table, step back and release the pressure. A simple take-away
goes something like this: "Maybe this isn’t the right time for you," or, "Maybe
you’re not ready for this," or possibly, "Maybe you can’t afford this right now.
It’s best at this point that I table this offer until the timing is better."
Watch what happens with
take-away closes. Many times, prospects now want what they can’t have and come
at you with a more appropriate counteroffer. Now you both win. On the other
hand, they may go the other direction and ask you to walk. Either way, I love
take-aways because at least you get a definitive answer.
I’ll say it again, if you
develop a deep rapport with your prospects, position yourself as their
consultative resource, offer them valuable information during your process,
articulate your value proposition well, and cost justify your proposed
solutions, you will find yourself negotiating only small implementation
logistics and not big deal-killing issues this late in the process.