The Three Biggest Negotiating Mistakes
Avoid these mistakes, which can cost you the sale, your integrity, and probably some sleep:
- Giving up without getting. Everything must have value. If you give up something, get something in return, even if it’s just your competitor’s proposals or a referral or a written testimonial. Never give without getting.
- Quitting too soon. Far too many salespeople quit the negotiation process before getting to a point beyond the uncomfortable. Work to where both you and your prospect are happy with the outcome. If you have come this far, don’t quit too soon. A sales call that comes down to negotiation is one near closing. However, learn a lesson from it and don’t let your next call become a negotiation.
- Not preparing for the 7 tactics we covered earlier in the last Hotmail Newsletter This may be the biggest mistake of all.
Now that you know what to avoid, you can delve into the right things to do for the best negotiating outcome. Realize that many customers are negotiating “silently” while you’re presenting. They’re thinking of ways to cut, items to get you to include, and issues of competition they can throw your way.
Be ready for them — Follow these simple tips:
The Top 10 Tips for Successful Negotiating
Good salespeople are good negotiators. So are good buyers, which make this an interesting dance.
Be aware and be prepared. Gather as much pertinent information prior to the negotiation so you can negotiate from a position of strength.
The “old” style of sales and negotiation was to “sneak up” on weaknesses and fears, and then play heavily on them until the other person relented. This is pure high-pressure, marked by substantial repercussions including buyer remorse, future vow to disuse, bad-mouthing, and even lawsuits.
The “new,” more successful negotiation still operates from a position of strength, but instead of playing off of their weaknesses, you help them gain the benefits you present.
That’s why your initial customer satisfaction survey is so important. Find out answers that frame the negotiation. What are their needs? What pressures do they feel? What options do they have?
Before you begin, you must know what you can negotiate. If you’ve got a margin to uphold, or a dollar amount you cannot go less than, then that is it. You’ve got to hold the line, but always remember:
Do not ever be put in the position of “Take it or leave it” on the first offer. This cuts your negotiation to the point of seeming unfairness in light of the regular negotiator.
Likewise, don’t always have to check with the office on every request. Know that you’ve got certain leeway within guidelines to make your own deal as needed. If you can add in a programmable thermostat, or filter upgrade with no additional cost, this can become part of your response instead of fumbling for what you can or cannot do.
When faced with negotiation (that they begin, not you), use these tips to hang onto your end of the bargain:
•Develop “negotiation consciousness.” Successful negotiators are assertive. They feel that everything is negotiable and are prepared in advance, and even develop strategies to avoid allowing a sales call to turn into a negotiation.
Being assertive means asking for what you want. Practice expressing your feelings without anxiety or anger. Let people know what you want in a non-threatening way. Practice ‘I’ statements. For example, instead of saying, “You shouldn't do that,” try substituting, “I don't feel comfortable with that.”
•Become a good listener. Negotiators are detectives. They ask probing questions and then shut up. The other negotiator will tell you everything you need to know - all you have to do is listen. You can become an effective listener by allowing the other person to do most of the talking.
Follow the 70/30 Rule — listen 70 percent of the time, and talk only 30 percent of the time. Encourage the other negotiator to talk by asking lots of open-ended questions – questions that can't be answered with a simple “yes” or “no,” and using reversing questions and nurturing statements in response to their questions and comments.
•Be sure to negotiate with the right person. There’s nothing worse than spending 30 minutes haggling out an item that is unimportant to the real decision maker. Ask during this build up, “Is this an important issue for <Decision Maker>? If so, should we consult them too so we can arrive at the best solution?”
•Use the power of deadlines. These are powerful inducers that cut negotiations. If someone wants to “wait and see” on getting a lower price, but your special ends tomorrow, you might be in business. You can also cut out a lot of “let me think about it” with a real, credible deadline.
•Aim high. People who aim higher do better. If you expect more, you'll get more. Successful negotiators are optimists. A proven strategy for achieving higher results is opening with an extreme position. You should ask for more than you expect to receive, and prospects will probably offer less than they are prepared to pay.
•Focus on common interests and satisfaction. Help the other negotiator feel satisfied. Satisfaction means that their basic interests have been fulfilled. Don't confuse basic interests with positions: Their position is what they say they want; their basic interest is what they really need to get.
•Don't make the first move. If you open first, you may give away more than is necessary and you’re essentially negotiating with yourself. The best way to find out if the other negotiator's aspirations are low is to induce them to open first. They may ask for less than you think.
This doesn’t include a Special wherein you say, “Our regular price is fifty two eight, but since you called on this special offer, it’s only forty nine twenty.” That first move is often powerful enough to avoid negotiating altogether.
•Don’t accept the first offer. Don't accept the first offer. If you do, the other negotiator will think they could have done better (i.e. It was too easy.) They will be more satisfied if you reject the first offer because when you eventually say “yes,” they will conclude that they have pushed you to your limit.
•Don't make unilateral concessions. Whenever you give something away, get something in return. Always tie a string: “I'll do this if you do that.” Otherwise, you are inviting the other negotiator to ask you for more.
•Know that you can walk away! Never negotiate without options. No sale or prospect is worth losing your self-respect over. (You shouldn’t feel dirty or like you need a shower afterwards!) If you depend too much on the positive outcome of a negotiation, you lose your ability to say “no.”
With any negotiation reached, make sure it’s well defined. Make sure your “promises” reach print or you’ll really tick someone off. It can sour any good will you thought you had reached!
•Lastly, be patient. This is very difficult for Americans. We want to get it over, and be done with it. Whoever is more flexible about time generally has the advantage. Your patience can be devastating to the other negotiator if they are in a hurry.
Know in your heart, in your mind, and in your presentation that you’ve given “fairness” in all regards to the negotiation.
A customer’s emotions can sometimes need tending, but believe that your offer is of high value and communicate that often in your speech, your testimonials, your presentation, and in your closing.
The most successful negotiators rarely ever have to negotiate at all, which is what makes them so good. Learn these principles so you’ll close more and negotiate less.
In the next edition of HVACR Hotmail, we’ll cover how to sell to women. There are some subtle differences to selling to women and this should provide some insight that youneed to be aware of.
Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors. Readers can get a free marketing newsletter and a free 16-page report called “Get More Leads in Less Time” by faxing their letterhead with the request to 334-262-1115 or emailing to [email protected].You can also call Hudson, Ink at 1-800-489-9099 for help or visit www.hudsonink.com for other free marketing articles and reports.