Negotiation begins after all major aspects of the sale have been worked out: defining the customer’s needs, selecting just the right solutions, and clearly presenting them as addressing those defined needs. Both parties agree in principle that they are close to a deal. Negotiation is the process of working out the fine points necessary before the contract can be signed.
Successful sales negotiation is not a game of “winner” and “loser.” It is a subtle process of fine-tuning the details of the deal, so all parties walk away satisfied and ready to do business together again in the future.
When buyer and seller come together on the essence of what is being sold, there are often still many loose ends that need to be worked out. Price is certainly one of them, but there may be many others: pricing for individual features, payment options, delivery schedule, responsibility for implementation, customization, ongoing support, and many others.
That is where negotiation comes I, so the survival of the deal means not just getting an order but also negotiating a deal with expertise and flair.
The best news is that negotiation is a game like tennis or golf. Any person can learn the steps to become better. The key is having a system and practicing the techniques. Our system has seven steps that will put you on the path to better deals.
These steps are:
(We will cover the first two of these in this article, and the rest in Part 2.)
1. Guidelines, Where the Game Begins
The most successful negotiators prepare to win long before they ever step into the game. It is absolutely vital that you are mentally prepared for the game of negotiating. While you will be above-board and ethical, you never know who the other player might be.
How is your self-esteem?
The higher and stronger it is, the better each deal you make will be. Stop for a moment and realize that you have the opportunity to make today special for another person. It may be a hug for your wife or child. Perhaps a quarter in a charity canister or letting the other driver pull out in traffic. The fact that only you could do that at that particular time reinforces your worth.
The best ways to strengthen and improve your self-worth is to feed your mind with good thoughts every day, read great books, listen to inspirational or instructional tapes and practice self-affirmations. Devoting 10 minutes a day to this will make you feel strong and able. You will go to calls feeling bulletproof.
Another part of your mental workout is developing value for your company and its products. Write down 10 great things about your company. Then, list seven dynamite reasons to buy each of your products. Team up with others at your office to develop a super list. Once that is done, read it every day. Memorize it. This will be your strength when you are in a tough selling negotiation.
We started this article with the idea that negotiation is a game. Once you accept that and begin playing, you will start to improve. The game is played by two people. Yes, people not companies. You are putting a deal together with Jane or Joe not MegaCorp.
There are four possible endings to a negotiation game:
- I win, you win (game is won).
- I win, you lose (tie, play again in rubber match).
- I lose, you win (tie).
- I lose, you lose (game over).
The game is only won when both players win.
Playing in the win/win quadrant ensures that both players have a sense of accomplishment. They are happy and willing to play again. The win/lose/tie quadrants mean the game continues. However, the loser is now playing with a sense of getting even. This results in a short-term relationship of one-upmanship. The lose/lose quadrant is the no-sale ending. Both players walk away.
The Game Plan
You can’t be in sales for more than a week before you learn the 80/20 rule. Remember, 80% of your sales come from 20% of your customers. There is an 80/20 in negotiation, too. You will make 80% of your concessions in the last 20% of the negotiation. The way to prevent this is by dealing in a total-package mentality.
Lay out all the details in advance. Know exactly what you want to achieve and what your partner in the game wants. Get specific on price, terms, dates, payment schedules and other details. Design three complete programs that meet the criteria. You then offer these as complete programs, so you don’t end up with a series of niggling little changes and details on every individual item in the contract. And be sure that management has signed off on your plans so you can deal with authority.
There is one last piece to the Game Plan: The WAM – This is your Walking Away Motive.
The WAM is the point where you say, “Sorry,” and leave the deal on the table. Once you set your WAM ( in advance), stick to it. Your WAM is the only protection you have from playing lose/win. These deals are a virus. They will grow inside you and eat your self-esteem. It is better to walk away and play again later than to have guilt, grudges, and a burning desire to get even.
2. Targets, Dealing With “BUMS”
We often think of negotiation as happening between companies or countries. It’s the Russians versus America, or General Motors against the UAW. Nothing can be further from the truth. All negotiations are one-on-one. There are key people representing each side. These two play the game with a cast of supporting characters.
Job one is identifying the roster. The person you are playing the negotiation game with is your partner. A victory comes when this partnership operates in the win/win quadrant. Where does your partner fit in the corporate ladder? What power do they have? Whom do they answer to? Whose opinions do they trust?
Most of this information should be uncovered early in the sales process. Other sources can be support personnel, contacts you network with and your co-workers who may deal with different departments of the same company. Information is king. Get all you can before the game begins. Get the rest as you play.
Your partner will be wearing “colors.” They won’t be red or blue, but actually represent styles of negotiating.
Most of the people you will encounter in negotiations fall into one of these four styles:
- Bull negotiators
- Unicorn negotiators
- Mice negotiators
- Snake negotiators
Whatever your own style is now, it is important for long-term success that you learn to operate as a Unicorn.
BULLS are loud and obnoxious
They yell and bang fists on tables. They can be abusive, abrasive and at times, foul-mouthed. They play for power. Bulls want complete control. They want time, location and ground rules on their terms. They will also attack you personally to win. We al know sports coaches who are famous for their rants, throwing tantrums, and their constant battles with the owners. These are Bulls.
UNICORNS have mastered the game
They have high self-esteem, appreciate the game, know the rules and want to move forward to win/win closure. Unicorns are open and engaging, well-trained and extremely professional. They can be identified by the desire to gather and share information. This will include goals and backgrounds. Unicorns will talk about company mission statements, styles of doing business and the type of vendors they want to deal with.
MICE are difficult to deal with since they are usually not the true decision-maker
They will be meek, mild and afraid. They would rather run and hide. More than likely the Mice are pushed into the game by the true decision-maker (Bulls and Snakes like screens). Mice are easy to identify – they delay, lack knowledge and are hesitant to agree to even the most minor points.
SNAKES are dangerous
They are cool and distant. Smart and deceptive are the key traits. Snakes will not share information, or they will give false or partial information. Snakes believe the world is out to get them unless they get it first. They trust only themselves. Fortunately, fewer than 10% of those in the business world are snakes. Their high level of deceit causes them to self-destruct careers and business.
Responding To BUMS
How can you play win/win with this cast of characters? It is easiest with Unicorns. Play the game and move forward.
UNICORNS are operating under the golden rule of negotiating
“Do unto me as I will do unto you.” While they will not roll over and give you everything you desire, they will work for a fair deal. Unicorns have the goals set and will move in step with you. The most important thing is to always be above-board and reciprocate with Unicorns. Unicorns are classic win/win players.
BULLSs require that you remain very calm at all times
Speak softly. Deal with facts. Stay on the big picture and when challenged, focus on facts. Know that Bulls thrive on creating fear. The louder they yell, the more you relax and remain quiet. When the Bull moves to personal attacks, smile politely and quickly bring the meeting back to business. Once the Bull realizes you are unflappable, he or she will drop the facade and move toward a Unicorn approach.
MICE need to be bypassed
Give them plenty of support, build rapport and have them introduce you to the real decision-maker. If you find the rare decision-maker Mice, go slow. Build rapport with stories and lots of documentation. Keep re-assuring them of your desire to follow the rules of the game and the win/win results you want to achieve.
SNAKES are a challenge
You must do great research and reconnaissance. Check and re-check all facts. Ask for documentation on all facts and figures. Move deliberately and with extreme caution.
More than likely, Snakes will challenge you to use your Walking Away Move. You must be prepared to lose this deal if the terms being inflicted on you and your company are so costly that the deal just doesn’t make sense to you anymore.