This article first appeared on www.newbusiness.co.uk on March 26th 2010. To view the original article visit http://www.newbusiness.co.uk/expert-panel/gary-gorman-sales-trainer
Most small business owners are well aware of the need to focus on winning new and repeat business, but often find themselves wrong-footed by negotiation-savvy buyers.
In the elation that follows a declaration of interest, some sellers can even find themselves pushed too far, agreeing to deals that barely cover costs. Other sellers push too hard, or are too inflexible, eventually losing a sale they thought they had in the bag. So, what does it take to be a successful negotiator?
Prepare to succeed
Benjamin Franklin once said that ‘Failure to prepare is preparing to fail’, and he was correct. Tool yourself up with all of the information you need as soon as you start dealing with a prospective client and you are far more likely to hold your own. As you approach the negotiation stage, make a list of all the questions that you are likely to ask and be asked, as well as the assumptions that you will test or address. Making yourself a checklist, although seemingly rudimentary, is a great way of ensuring that you have prepared everything you’ll need on the day.
Know when to walk away, but don’t have your eyes on failure
There is no point agreeing to a deal that isn’t profitable, so in every negotiation, you’ll have a ‘walk away’ point where there is no point continuing. You’ll need to ensure that you stay on the right side of that line and never exceed it. Of course, focussing on your absolute minimum could mean that’s always exactly what you get, so instead, it helps to focus on finding the ‘breakpoint’, where your minimum price and their maximum price meet. Find it, and you should both walk away happy, feeling that you have achieved the very best possible deal.
It’s not all about what you say, but how you say it
Often, a buyer will unconsciously signal how they are feeling about the negotiations well before they make it known overtly. Listen to their word choice: is it positive or negative? If they are nodding, this might signal agreement, while averting their eyes may suggest they have information they don’t want to give away.
There are whole books on nonverbal negotiation cues, but often it is how a buyer’s behaviour changes during the course of negotiations that tells the story. For example, if a buyer relaxes arms that were previously tightly crossed, this could suggest you are close to an agreement or deal that works for both of you.
Creativity saves deals
If you walk into a negotiation with a set package on offer and refuse to budge, you are unlikely to succeed. Similarly, no matter how much planning you do, it is always possible that a buyer will surprise you with new information. For this reason, negotiations need to be fluid not rigid. Be ready to respond with alternatives as necessary, but take all the time you need to think changes through to make sure you’re not getting pushed past your ‘walk away’ point in the heat of the moment.
Don’t add extras for the sake of it
Lots of negotiators open by offering to throw something extra in to help ‘sweeten the deal’. But far from helping you along, it can make the buyer question the value of your offer – they may even feel prompted to ask for more than they otherwise would have. Instead, only alter your offering in return for something of similar value. If they want a price cut, adjust your package accordingly, perhaps removing optional extras, for example.
Wait to say yes
As tempting as it may sound, it’s generally unwise to accept the first offer a buyer makes. Why? Because you run the risk of leaving the other party feeling despondent, thinking that they should have opened with a lower offer. Both parties need to walk away feeling satisfied that they negotiated well and got a good deal, and if that means getting a higher price than you hoped for, all the better!
Aim high
It’s very easy to feel down if things aren’t going your way, especially if you really need a sale, but that’s what your ‘walk away’ point is for. Keep it in mind, but don’t concentrate on your minimum. Instead, concentrate on getting the best deal that you can. If you aim high, you are likely to come out with a better agreement than if you focus on failure.
So there you have it, seven straightforward tips to follow during your next negotiation. Follow them, and you should see a greater number of sales, happier customers and a healthier bottom line.
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Posted by Gary Gorman. For more articles like this visit www.garygorman.wordpress.com
