The key to successful negotiating is what is called win-win negotiating, which means that both parties feel better off and more satisfied than they were before. The rule is that there must be a win-win situation or there is no deal. There are three purposes of entering the negotiating process.
1) All parties are satisfied.
2) All parties are committed to fulfilling their obligations.
3) All parties are willing to negotiate with each other again.
Preparation Techniques
Effective negotiating in selling begins with preparation. A very effective way to prepare is to use what’s commonly known as the Lawyer’s Method.
What’s the Lawyer’s Method? It’s simply preparing your position from the other person’s point of view. First you must outline what the other party needs and wants and what their constraints, limitations and restrictions are. Ask yourself, what does my customer ideally want to get out of this?
Then ask, what do I ideally want to get out of this?
You can also use the mindstorming method, which in this case would mean to quickly writing down 20 benefits for the other party in negotiating satisfactorily with you. Remember that the more options you have the more power you have. Know your ideal outcome and what you’re prepared to concede in advance. Don’t wing it and hope for the best. You’ll regret it later. The side that prepares more, gets more.
Rules of Negotiations
1) Everything is negotiable. Someone, somewhere set a price for a product or service and someone somewhere can change it too. One must always consider the entire package offered (service, terms, guarantees, payments, rate, etc.) and not just the price.
2) Don’t act too sophisticated. You’ll just come across as slick and untrustworthy. I remember in a book by sales trainer and author David Sandler where he proposed that the character of Columbo in the who-done-it TV series to be the ideal sales personality. Columbo, with his disheveled look, seemed as if he was incompetent, but he would end up getting suspects to say things they normally wouldn’t because he seemed so non-threatening.
3) Negotiate the price before the work starts. Never allow the other party to get away with vague comments like, “We’ll work out the details later”. This is how you end up losing deals and sometimes having to meet with lawyers.
4) Always ask for more than you want or expect. Assume that the other party has done their homework too and is expecting to negotiate.
5) Offer to meet the other party in your office or neutral surroundings.
You always feel more confident and in control in familiar territory. The other party feels more vulnerable in an unfamiliar environment.
6) Don’t become confrontational. If your customer or client is combative refuse to react in an abusive or rude manner. Resist making statements like, “I disagree with that” or “That’s unreasonable”. Instead you can say, “Do you feel that’s fair?” or “Is that something you’d go along with if you were in my shoes?” This way you put the burden on them to justify their statements.
7) Summarize all the points brought up and agreed upon. This will insure that there are no discrepancies. Then, most importantly, have all that’s agreed upon put on paper and authorized by both parties. You might say, “Let’s go over that once more to make sure we’re in agreement and then why don’t I put everything on paper.”
Congratulate them on a great deal. Always end on a good note and compliment the other party on how good of a negotiator they were.