It all comes down to this. You’ve worked hard at becoming at honing your sales skills. You’ve studied the trends in your target industry. You nearly know as much about your customer’s business as he does. Your value proposition is crystal clear. To maximize the return on your effort, you must negotiate well.At this time of the year, where many companies seek to maximize their year-end revenue, lots of deals are actively negotiated in the last weeks of December. In many cases, sales people look to this time as their most active negotiation period. However, when negotiation preparation begins only at that stage, much of the potential value of the negotiation is already wasted. The most common mistake made in negotiation is that people fail to remember that negotiation starts from the very first interaction in the sales cycle.As with everything else, you must prepare fully as you negotiate. Here are three rules I think are worth adhering to:
- Rule #1: Craft your strategies and tactics to engage – for each stage of the selling cycle.
- Rule #2: Listen actively.
- Rule #3: Don’t confuse ‘positions’ with ‘interests’.
To succeed, you must negotiate in all dimensions, recognizing that you can control the scope and sequence of the negotiation events. Your BATNA (Best Alternative to Negotiated Agreement) is a powerful tool. Work hard to develop the best one you can. As you do, consider the buyer’s options, and work with him to reframe the negotiation. Focus on his interests and your goals rather than adopting negotiating positions. Listen actively to what the buyer says, and when you have addressed his issues, know when to gain a concession or commitment.
Use the following questions to assist in your preparation:
- What do you hope to achieve out of the negotiation?
- What’s your maximum plausible position?
- What’s an acceptable outcome?
- When do you ‘walk away’?
- What is your BATNA?
- How can you improve your BATNA?
- What type of negotiation do you expect: co-operative or combative?
- What are you willing to concede?
- What is the buyer’s BATNA?
- Who are the people that need to be involved on the other side?
- What are the issues they care most about?
- What are the business circumstances of the deal for the buyer?
- What’s the value to the buyer of completing the deal?
- How easy is it for the buyer to find a replacement deal?
- Can you document a list of unresolved issues?
- What are the logistics of the negotiation/closing?
- What emotional issues do you need to resolve for the buyer?
What else would you add to this list?