| How many Sales people really understand | | | | course, but we will need to engage our team in |
| NEGOTIATION? Sadly too few. | | | | overtime to meet the deadline, therefore it will |
| Many enter the negotiation cycle without realizing | | | | attract a 10% price premium". |
| they are in a critical part of the Sales Process... | | | | Salesmen naturally believe that the Buyer has a |
| and if you are a sales person, and unable to | | | | the upper hand, particularly as he may have a |
| determine where the boundaries are, read on. | | | | choice of suppliers. However, if you have reached |
| NEGOTIATION, when used well is a highly | | | | the negotiation phase, it can be assumed you are |
| powerful Sales Tool, but how many of us really | | | | winning the competitive battle. At this point the |
| use it to best effect? How many Sales people | | | | sales man should never underestimate the |
| are 100% prepared when it comes to negotiation. | | | | strength of his proposition. |
| Not many. | | | | It is not unknown for a negotiation to break down |
| Indeed negotiation is not always related to Sales | | | | irretrievably, although with thorough preparation |
| situations. For example we have all had the | | | | by both sides, this is an unlikely outcome. |
| discussions with our siblings along the line of: "Can | | | | The outcome of a negotiation and subsequent |
| you take me to the pictures tomorrow?", | | | | business deal fall into three categories. The first, a |
| responding with: "Only if you tidy your bedroom". | | | | 'win - win' is the most desirable, both sides feel |
| Indeed a primitive, but often effective negotiation, | | | | good about what has been achieved, and it is a |
| and indeed one (if carried out) can lead to a 'win - | | | | great foundation for further business between the |
| win' outcome! | | | | two parties. |
| It is vitally important to recognize when the sales | | | | A 'win - lose' is where one company is delighted |
| process enters the 'negotiation phase'. Failure to | | | | with the deal, and the other is regretting the |
| recognise this may be detrimental to your desired | | | | agreement, and feeling 'stitched up'. Frequently the |
| outcome, and do the salesman a disservice. | | | | 'delighted party' is oblivious of the thoughts of the |
| So, what is negotiation? | | | | 'aggrieved party'. In this case, unless some |
| I have over the years heard many definitions, but | | | | remedial work can be done on the relationship, it |
| the simple ones are always the best: | | | | is highly unlikely that the parties will do business |
| "The exchange of tradables to facilitate an | | | | together. |
| agreement". | | | | The final outcome is a "lose - lose" outcome. Both |
| Simple! | | | | parties feel the deal was poor, and such |
| And what are tradables? And more importantly, | | | | outcomes should be avoided at all costs. |
| how many sales men can list them? | | | | However, they do happen due to business |
| Tradables are the areas where a Salesman or a | | | | pressures, expediency and other compelling issues. |
| Buyer can 'give a little'. The obvious one is price, | | | | Indeed it is highly unlikely that these parties will do |
| or more accurately, cost of goods/service. But | | | | business again with each other. |
| there are many others too. They can include | | | | So how do we ensure that outcomes are 'win - |
| aspects such as product/service specification, | | | | win'. |
| payment terms, delivery and quantity. | | | | Simple - preparation is key. A salesman MUST |
| Let us look at some sales examples. | | | | know and understand his tradables. A buyer may |
| The buyer says "Yes, I like the look of your | | | | have different tradables depending on what he is |
| resistors, and if you can get the price down by | | | | buying. Both parties must accept that transaction |
| 10% then we can do business." | | | | value can be talked up as well as down. |
| The inexperienced salesman, who does not realise | | | | Typical tradables for a salesman would be (and |
| that the negotiation phase has just been entered | | | | these can be traded up and down): |
| is inclined to say "Yes" in great haste to close a | | | | Delivery time |
| deal. However, the more experienced salesman | | | | Order value |
| who has a clear understanding of his tradables | | | | Quantity |
| may respond in one of the following ways: | | | | Contract duration |
| "Of course, but I will need you to commit to a 12 | | | | Product finish (specification) |
| month agreement for me to guarantee this | | | | Packaging |
| price"or | | | | Packing and delivery costs |
| "We can meet this price, but we will have to | | | | Insurance cover |
| provide the product without the wired | | | | Delivery frequency |
| connectors" | | | | Payment terms |
| Another example would be: | | | | In summary, the best salesmen recognize their |
| Buyer - "If you can guarantee delivery by the | | | | tradables, they can recite them at a moments |
| end of the month then we can place an order | | | | notice, and they recognize the simple signs of |
| now". | | | | negotiation. Furthermore, they have an empathy |
| Again, the inexperienced may jump at the offer, | | | | to the needs of their customer in order that all |
| but the more measured approach would be: "Of | | | | outcomes are 'win - win. |