Negotiating has earned its reputation as an unpleasant process in large part because it is inherently stressful. Stress is produced when something or someone blocks a person from obtaining a desired goal, which just about defines the process of negotiation. Each party is blocking the other one in some way. “I won’t buy unless you give me this” is just another way of saying, “You can’t obtain your goal (to get the order) because my demand (to get the concession) is blocking your way.”
Two other stressful things happen in negotiation. The blocks generally get bigger and bigger as the easy concessions are made early and the tough ones—the big price cut or the large volume order—are left to the end. And, the closer you get to the end, the closer each person feels to achieving his or her goal. The carrot is dangled closer and closer to the donkey’s nose.
Stress, stress, stress. That’s the real reason many people feel uncomfortable when put into a negotiating role. The uncertainty of the outcome is stressful. The pressure to make multiple decisions is stressful. The fear of feeling outfoxed is very stressful. It’s certainly a lot less stressful to say, “Sorry, our prices are firm. Take it or leave it.” You get the pain over with.
Negotiation doesn’t have to be that way. I’m not saying that you’ll eliminate the uncertainty, the decision-making, or the possibility of leaving some money on the table, but you can make the process less stressful if you have the right attitude.
The better way, of course, is win/win negotiation, where both parties recognize that the value side of the equation is not finite. If you can focus on building the value of the deal, both the buyer and the seller generally win. Win/win negotiation is at the heart of the Creative Selling System because it focuses on need satisfaction.
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
Monday, February 27, 2012
Monday, February 20, 2012
Win / Lose Selling
How do you negotiate honorably and successfully? By negotiating both value and price with the goal of striking the most favorable deal for both the buyer and the seller. If there is a morality problem with a negotiated sale, it’s when one party’s aim is to “win” the game at the expense of the other. If both the buyer and the seller can believe in and practice win/win negotiations, everybody’s life is easier and they can sleep better at night.
Unfortunately, too many people engage in win/lose negotiation. They believe that the only way they can gain value is by taking it away from the other person. They view every transaction as a zero-sum game. This belief is anathema to the Creative Selling System. You can’t build long term customer relationships based on taking advantage of the customer every time you sell them something. Sooner or later they’ll figure it out.
When you engage in win/lose negotiation, you create an adversarial relationship with your prospect. That lifeblood of Creative Selling, information about the prospect’s needs, is cut off at the source because the prospect soon realizes that you’re using that information to gain the upper hand in the negotiations.
That’s one of the main reasons, by the way, that the traditional consultive selling approach is so ineffective—many prospects fear that giving information to the consultive seller will just give him ammunition to use in future negotiations. So they clam up or even give misleading information to confuse the seller.
You can’t create solutions to the prospect’s needs unless you learn what those needs are. Without that information, your selling effort degenerates into a guessing game where you have to keep offering different proposals without having the feedback necessary to come up with good ones. And because your ideas don’t very accurately meet the prospect’s needs, fewer sales occur. The win/lose negotiation attitude may produce a larger single order today, but it reduces the probability of getting better orders tomorrow.
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
Unfortunately, too many people engage in win/lose negotiation. They believe that the only way they can gain value is by taking it away from the other person. They view every transaction as a zero-sum game. This belief is anathema to the Creative Selling System. You can’t build long term customer relationships based on taking advantage of the customer every time you sell them something. Sooner or later they’ll figure it out.
When you engage in win/lose negotiation, you create an adversarial relationship with your prospect. That lifeblood of Creative Selling, information about the prospect’s needs, is cut off at the source because the prospect soon realizes that you’re using that information to gain the upper hand in the negotiations.
That’s one of the main reasons, by the way, that the traditional consultive selling approach is so ineffective—many prospects fear that giving information to the consultive seller will just give him ammunition to use in future negotiations. So they clam up or even give misleading information to confuse the seller.
You can’t create solutions to the prospect’s needs unless you learn what those needs are. Without that information, your selling effort degenerates into a guessing game where you have to keep offering different proposals without having the feedback necessary to come up with good ones. And because your ideas don’t very accurately meet the prospect’s needs, fewer sales occur. The win/lose negotiation attitude may produce a larger single order today, but it reduces the probability of getting better orders tomorrow.
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
Monday, February 13, 2012
Negotiating Sales Like A Pro
Do customers in your industry pay the asking price? Or do they routinely ask for a lower price, better terms, extra merchandise, rebates, slotting fees, or extended service? If you sell business-to-business, you’ve probably never had a customer agree to pay your asking price on the first pass. It’s becoming more common in retail sales, too. What your customers are doing, of course, is practicing an art as old as commerce itself. They’re negotiating.
Negotiation is that stage of the selling process that occurs after the commitment to buy is made but before the sale is actually closed. It’s when the buyer and seller come to terms on the conditions under which the product or service is provided.
Sounds imposing, doesn’t it? And it can be a complicated undertaking, which is why I suggest you approach negotiations as carefully as James Cameron approached the production of Avatar. You need to coordinate all the various components of the negotiation if you are going to produce a successfully orchestrated sale.
Negotiation is a matter of choices by both parties. One party chooses whether or not to offer something and the other one chooses whether or not to accept it. As you’ll see, it’s not always the seller who does the offering, nor is it always the buyer who does the accepting or rejecting. Nor is price the only item subject to negotiation.
When do you negotiate? If you’re a creative seller, you only negotiate the terms of your proposal after the prospect has made the commitment to buy the idea you are selling. If the prospect doesn’t like the idea, no amount of negotiation of the price or any of the other terms will make the sale happen. But once that commitment is made, you can assume that you will negotiate the sale in one way or another.
The price to value ratio is at the heart of every negotiation. Both the buyer and the seller negotiate both sides of that equation, giving gains on one side in return for gains on the other. When the needs of both the buyer and seller are met, the sale occurs.
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
Negotiation is that stage of the selling process that occurs after the commitment to buy is made but before the sale is actually closed. It’s when the buyer and seller come to terms on the conditions under which the product or service is provided.
Sounds imposing, doesn’t it? And it can be a complicated undertaking, which is why I suggest you approach negotiations as carefully as James Cameron approached the production of Avatar. You need to coordinate all the various components of the negotiation if you are going to produce a successfully orchestrated sale.
Negotiation is a matter of choices by both parties. One party chooses whether or not to offer something and the other one chooses whether or not to accept it. As you’ll see, it’s not always the seller who does the offering, nor is it always the buyer who does the accepting or rejecting. Nor is price the only item subject to negotiation.
When do you negotiate? If you’re a creative seller, you only negotiate the terms of your proposal after the prospect has made the commitment to buy the idea you are selling. If the prospect doesn’t like the idea, no amount of negotiation of the price or any of the other terms will make the sale happen. But once that commitment is made, you can assume that you will negotiate the sale in one way or another.
The price to value ratio is at the heart of every negotiation. Both the buyer and the seller negotiate both sides of that equation, giving gains on one side in return for gains on the other. When the needs of both the buyer and seller are met, the sale occurs.
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
Monday, February 6, 2012
Making Team Sales Presentations
Each team, even if it consists of only two members, should have a leader. That’s usually the senior person on the team and will be the person the prospect will tend to address with questions. It doesn’t have to be, but it usually happens that way. The leader will also generally be the one to open the presentation and ask the closing question. If there is any question about who’s going to be the leader on your team, settle it before you go into the presentation.
But don’t let the leader look like the Grand Poobah attended by his retinue. If the leader delegates all the menial tasks like handing out materials to the lowly lackeys on the team, the prospect is liable to sense a power display in progress, and react negatively. Eliminate this problem before it arises and make sure the leader is perceived as a member of the team, not its monarch.
On the other end of the scale, also make sure that every member of the team actively participates in the presentation. Each person should have a speaking role of some sort, preferably related to their role in the seller’s plan to serve the prospect’s needs. You don’t want the prospect wondering why that guy in the corner isn’t saying anything while you’re trying to make the points in your presentation. The Metropolitan Opera may need spear-carriers, but your sales team doesn’t.
In order to keep your team call focused on results, make sure everyone on the team understands these points about the upcoming call:
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
But don’t let the leader look like the Grand Poobah attended by his retinue. If the leader delegates all the menial tasks like handing out materials to the lowly lackeys on the team, the prospect is liable to sense a power display in progress, and react negatively. Eliminate this problem before it arises and make sure the leader is perceived as a member of the team, not its monarch.
On the other end of the scale, also make sure that every member of the team actively participates in the presentation. Each person should have a speaking role of some sort, preferably related to their role in the seller’s plan to serve the prospect’s needs. You don’t want the prospect wondering why that guy in the corner isn’t saying anything while you’re trying to make the points in your presentation. The Metropolitan Opera may need spear-carriers, but your sales team doesn’t.
In order to keep your team call focused on results, make sure everyone on the team understands these points about the upcoming call:
What are we trying to do?The choir always sounds better when they’re all singing the same song.
If this call is successful, what will happen?
Who are the key players?
What happened on the last call?
What are we going to ask them to do?
Why should they do it?
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.
Subscribe to:
Posts (Atom)