The sales negotiation process can seem like a miserable chore when the parties involved resort to underhanded tactics and sneaky methods to get what they want. But one of the most important aspects of effective negotiation is that everyone leaves satisfied, not feeling like they've been swindled out of a good deal. To prevent this cheated feeling, you need to follow a strategy for your negotiations.
No matter what you're selling, or to whom, you need a reliable negotiation strategy that enables both parties to succeed in the deal. Think of your strategy as your master plan, or systematic approach. Since any strategy is only as strong as the techniques and tactics you use, think of tactics as the tools for implementing your negotiation strategy.
Without a solid strategy in place and the right tools for the job, you are likely to succumb to ineffective negotiation tactics and may end up losing sales or not getting the best outcome for you and your company. Use the following five strategies to negotiate effectively.
1. Always be Prepared
You wouldn't jump out of an airplane without a parachute, and you wouldn't climb a mountain without prior preparation, so why should negotiating be any different? All effective negotiations start before you actually sit down at the bargaining table. So don't jump in without any research or planning. Take time to consider your counterpart's situation. Ask yourself what they need from the deal, and know what you can and cannot compromise.
Negotiations for a year-long service contract will obviously require more preparation than for a one-time purchase of a product. But regardless, use preparation to gain a comprehensive view of the situation. Preparation and planned alternatives will help you stay relaxed through the negotiation. And remember that the more you know about the deal in question, the easier it will be to arrange the best solution for everyone involved.
2. Set Objective Negotiating Standards
If you want to reach a mutually beneficial agreement, everyone has to play the negotiation game by the same set of rules. Objective negotiating standards are like a set of rules established before the process starts. Many times, these standards are set by the organization, or by a government law. For example, most banks won't grant a loan to someone buying a home until that house has been inspected and declared structurally sound. This rule is a standard that must be met before the bartering can even begin.
In most cases, you can set your own rules. For example, if you're negotiating a carpet cleaning service contract, you may approach your client with the competitor's price and what the client currently pays for regular cleanings as some standards for the process. By setting guidelines prior to the negotiation, you ensure that everyone operates under the same standards and everything runs smoothly.
3. Work With, Not Against, the Other Party
Good negotiations mean all parties leave the table feeling good about the agreement and about each other. In order for this to occur, everyone involved must strive for mutually beneficial solutions. When you approach the situation with this attitude of mutual satisfaction, the other party will usually disarm. Most people only get defensive when they feel like you're out to swindle them. But if the other party knows you want to play fair, they try to play fair as well.
However, you may come across some people who don't agree with the concept of fair play. Unfortunately, some people, regardless of how you approach negotiations, won't play by the same high standards. No matter what you do, these individuals are prepared for battle and may bring out the heavy artillery, such as intimidation and manipulation. But you can't stoop to their level, no matter how tempted you may be. Keep the possibility of an unfair counterpart in mind, but don't abandon your strategy for fair play.
4. Finalize All Agreements
Keep in mind that the point of negotiation is to arrange the best deal for everyone, so ask plenty of questions. Don't let important details slip through, and perhaps more important, listen to the client's responses and concerns. If they are worried about customer service, or the contract length, or routine repairs on the product, then address these issues with care. When the terms are settled, make sure everyone's perceptions match, and recap all the important details.
Depending on the impact of the deal, you may decide to put the terms in writing, such as a sales contract or agreement. Keep a copy for your records, and give the other party a copy as well. Then if any questions arise, you'll both have a copy of the answers. And don't sign off until both parties understand all the key points. Don't leave any details hanging, and make sure everyone agrees to all the terms and knows what is expected.
5. Follow Through
Once you've negotiated the sale, developed mutually beneficial solutions, and signed the agreements, you must follow through on your part. This means you do what you said you would do, when you said you would do it, and in the manner you said it would be done. For example, if you said you'd deliver a product or service on a certain day, then make sure it's there. If for some reason you can't follow through as expected, make sure you contact the other party and discuss alternative arrangements.
Also, make sure the other people involved in the agreement follow through as well. Unfortunately, at some time in your sales career, you'll inevitably run into some people who blow off agreements. In this case, you must protect yourself. But as a general rule, for everything you give, you must expect to get something in return.
Negotiation is a process of give-and-take for everyone involved. When you follow a strategy, you can focus on finding solutions, rather than winning a position. Preparation gives you a comprehensive view of the situation, and standards serve as guidelines for compromise. Remember to work with, not against, your counterpart, and then finalize all the details you've agreed upon. Most important, once you've completed the negotiation process, keep your word and follow through with the deal.
As a salesperson, you naturally want your customer to be satisfied, but you also need to benefit from your hard work. When you use these strategies every time you negotiate a sale, both parties will come away pleased, and you'll win more clients in the process.