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The lost art of negotiation: Relearning a valuable sales skillby
All of these are great enablers to win the deal and when you couple them with sales training and coaching then we can really even up the odds against the modern day buyer.
Having said that, in my experience there is one skill that is hardly ever taught on sales courses and where hardly any CRM or tech enabler can help – and that is the art of negotiation. It seems to be a lost art!
So much emphasis nowadays is focused on prospecting and then getting to the close that the skills needed to actual agree the terms (without giving away your shirt at the same time) seems to be forgotten about.
So let’s take a closer look at this.
psst (I’m whispering now) – get this right and it can actually add about 10-15% margin onto your figures.
Negotiation skills are vital for the modern day sales professional. Your buyers are a lot more savvy in this area then they once were so it’s time you sharpened your skills to even up the odds!
Get it wrong and it can cost you in terms of lost margin, it can cost you in terms of reputation through the promises that you can’t fulfil and leaving your service and fulfilment team scratching their heads saying “They agreed to what?!”
As I said before, unfortunately most sales training just concentrates on everything leading up to the close.
Rarely do they cover how to negotiate the terms and deal.
So I’m going to assume that you know little about this subject. Let me give you three tips on how to become a better negotiator.
TIP #1 – Know Your L.I.Ms
Before you enter into any negotiation you must set some objectives.
LIM stands for:
You first must work out your ideal objective. i.e LIKE
You must know what price you would like to sell your product or service at. The payment terms, what you can concede and “give away” to the prospect.
The “I” stands for INTEND and is basically what you feel will be the most realistic outcome you will get.
Know this from the outset. What is likely to happen?
And the “M” stands for MUST. These are the essentials that you MUST have in the deal.
If these are not met then you walk away! What is the lowest price you will go? What are all of the other elements of the deal that you MUST absolutely get or it’s not worth your while.
By planning in this way you are creating some key criteria to keep you focused on what you want to get out of the deal.
TIP #2 – Create A BATNA
BATNA stands for “Best Alternative to a Negotiated Agreement”.
BATNA was first created way back in 1981 by Roger Fisher and William Ury in their bestseller “Getting to Yes: Negotiating without giving in” and it’s still a very powerful concept today.
BATNA is the course of action that you need to take if the current negotiations fail and an agreement cannot be reached. BATNA is the key focus and the driving force behind a successful negotiator.
You should generally not accept a worse resolution than your BATNA!
Care should be taken, however, to ensure that deals are accurately valued, taking into account all considerations, such as relationship value, time value of money and the likelihood that the other party will live up to their side of the bargain.
These other considerations are often difficult to value, since they are frequently based on uncertain or qualitative considerations, rather than easily measurable and quantifiable factors.
TIP #3 – “If you…then I”
Negotiation is all about give and take.
You have to “Give” to “Get”
What I mean by this is that can you make a concession or trade something and get something back in return of equal or greater value?
The way that you need to ask for this though is by referencing their trade off first and then what you would like:
“If you can agree to the prices already quoted then I can offer the initial upfront systems training free of charge saving you £1,500.”
“If you can make a start within the next 7 days then I can give you that additional 2 year warranty that you’re after”
I hope those three quick tips will help you to get started.
If you haven’t already, I urge you strongly to look at how effective you are as a negotiator. It can really make massive difference to your margins for each deal.
Remember, turnover for show, profit for doe!