The Art of Negotiating
“When selling you
never get what you deserve, you get what you negotiate for.”
Negotiation is a mutual exchange of concessions, which provides both
buyer and seller with a profitable deal, or a win-win situation.
is Negotiating Different?
Fundamentally, negotiation is
different from all other methods of reaching an agreement, such as:
persuasion, accommodation, compromise, and confrontation.
is based on the premise that both sides will win and commence a
long-term business relationship.
Following is a summary of other
- Persuasion – implies that one party knows best and will
therefore impose his/her will on the other. It does not usually promote
lasting relationship because it colors all future transactions with
tension and distrust.
- Accommodation – this is a one-winner strategy, where the
weaker party gives in.
- Compromise – is a nobody-wins strategy as each side usually
gives up something they didn’t want to. This method promotes suspicion.
- Confrontation – describes a situation where both sides
initially refuse to budge. The result is that either one side surrenders
or no deal is made.
Golden Rules of Negotiating
- Ensure Prospect is Sold in Principle – never enter a
negotiation if the prospect is not sold in principle. Remain Calm – be
calm, cool, and collected as possible.
- Remove Emotions – top negotiators are cold/clinical.
- Have a Plan – prepare for your negotiation by understanding
your best-case scenario, fallback position, and
- Never Give Anything Away – instead of just giving concessions
away, make sure to always trade them and get something in return.
The sales negotiator must first
decide on a strategy, based on:
- The needs of the customer
- The strengths of the selling company’s position
- How much the selling company wants the order
Preparation for a negotiation should include:Analysis of previous
- Analysis of buying company’s needs & objectives
- Defining the sales objectives
- Planning the negotiation interview
- Costing of what you can afford to give away
- Estimating the value of concessions to the buyer
Skilled negotiators do not start by making their best offer. Instead,
they test the other side by various tactics. During this exchange, each
side takes an initial stance.
During the subsequent bargaining,
each side moves towards a prepared fallback position. The final
agreement will normally depend on:
- The relative skills of the negotiators
- The strengths of the buying/selling companies
- The intensity of each side’s needs
When the buyer takes their initial stance, the sales negotiator should
take their own initial stance at a point equidistant from the sales
Structure of the Negotiation Interview
salesperson should seek to take control of the negotiation. If control
cannot be assumed immediately, the salesperson should keep cool until
the opportunity arises.
Following is a suggested structure for a
The salesperson should attempt to set the
- Stating “why we are here.”
- Stressing mutual objectives
- Being confident that an agreement will be made
- Maintaining eye contact
- Avoiding dominant questions
- Avoiding distractions
- Letting the other party respond with their overview
Discuss the history of the deal and let the
other party respond with their perspective. Do not state issues in such a
manner that the other party will react and start to argue.
Agree on the items that are in scope for the
negotiation. Do not discuss any points until all issues have been
identified. If the other party surprises you with an unexpected issue,
remain calm. Question, makes notes, but remain neutral at this stage.
Issues for Discussion
Once all issues have been defined,
create an agenda. The order of the agenda should be well prepared. The
following considerations will provide a guide:
- Start with a Bridge Issue – consider starting with a minor issue
that can be easily agreed and promotes an atmosphere of partnership.
- Make Concessions Early – make concessions early and seek concessions
on later, more important issues.
- Work up to Key Issues – prioritize your agenda such that you deal
with all the minor issues in the early stages of the negotiation. This
is a good method for avoiding a heated negotiation right from the
Refining the Issues
This is the process of discussion,
offense and defense, giving and receiving, persuading and bargaining.
side approaches their fallback position. If the positions are
identical, this will be a short, painless process. If not, more
bargaining will be necessary.
when an agreement has been reached in principle.
Definition: closing is a natural
conclusion to a well-presented sales argument.
organizations feel that they need to have better “closers.” Although
closing is an essential part of the sales process, research has
demonstrated that effectively developing implicit needs to explicit
needs exponentially increases close rates.
closing should be used to affirm that value has been shown. The classic
line “always be closing” makes sense if you consider that effective
salespeople trial close after each and every feature they present.
many cases, a successful sales call will involve 5-7 trial/final
closes. A trial close is a stepping-stone to the final close, and
usually confirms that the prospect sees value in a particular aspect of
the solution. For example, a trial close might be: “do you see how this
part of our product can save you time?”
Following are some
- Direct Close – simply asking for the order.
- Assumptive Close – assuming prospect is ready to buy.
- Choice Close – providing two purchasing options.
- Silent Close – waiting for the prospect to respond.
- Final Objection Close – closing on final objection.