I’ve seen some amazing negotiators who have personally bought houses, Ferraris, a garage full of home appliances, even school fees with great results.
The Ferrari buying ICT sales guy dined out for years on purchasing a $378,000 car for $192,000.
So why aren’t these superb outcomes translated into solid margins, reasonable delivery timeframes, and well managed variations when selling your solutions.
Ah, because we’re selling now, not buying and they have all the power goes the refrain.
Let’s look at the core planks of good negotiation and see if they translate at work
Many of you will have bought your own home or investment property and prepared very well.
You researched the market, looked at a lot of options, set expectations with Estate Agents and then at Auction set your walk away position which gave you a sense of structure and anchored your decision making.
Come Monday morning you have a client who wants to re-negotiate consulting rates, software licenses or volume product pricing, payment terms and a bucket of ‘more for less’
As a negotiation coach, unfortunately I often don’t see the same rigor and planning in these client meetings as might occur with a house purchase and often the figures over a three year contract are similar or even greater.
Too often sales people have a 5 minute meeting to think about their pricing, competition and offer and then WAIT for the client to lead the negotiation. You are on the back foot.
Ideally you should have your own positions on these issues and negotiate from there.
2. Bundling vs Unbundling Solutions
When you’re buying a new fridge does the salesperson itemise each component eg additional crisper tray, stainless steel or white, additional warranty, delivery and removal of our old fridge. What do you do?
Ask them to throw stuff in of course or decide that you’ll pick it up yourself to save $200. That’s $200 that had $100 margin in it for the seller.
Companies do the same thing to their detriment. When you itemise individual services or hardware, software, installation you invite the client to ‘pick off’ expensive items and ask you to throw it in.
When you bundle a solution with a quote that says ‘Advertising Solution for Acme Inc’ $74,590 clients have less room to negotiate. You describe the complete solution and it then becomes a matter of proving its value, not its individually priced components.
3. Concession Trade
How many times have you traded in your personal life with ‘I’ll pick up the kids if you cook dinner tonight’ or ‘I’ll buy 2 dozen if you give me 10% off?’
It’s called concession trading based on the principle that you don’t give something away unless you get something back.
Back at work, rather than totally conceding on price for example, why not counter with ‘If we reduce the price by 5%, will you place the same volume order next quarter as well. Cash flow is another good one. ‘If we reduce the price by 5% will you agree to pay in 7 days?’
If you are going to concede in a negotiation, at least get something back in return.
In essence, take some of those great negotiation skills in your everyday life to work. The other party does not have all the power. You too can control how you negotiate. The results are amazingly rewarding.
Written by Elliot Epstein, CEO, Salient Communication
Elliot is a keynote speaker who has also trained and coached over 3000 people throughout the Asia Pacific Region including CEOs, Olympians and Leadership teams and is a sought after keynote speaker on Executive Presentations, Sales, Negotiation and Leadership.