Negotiation Success

In this issue:

1. Negotiation Preparation = Negotiation Success  Courtesy of Colleen Francis

2. Language in focus

3. Language tips:

        - showing respect

        - dealing with objections

4.Useful links: Seven Rules for Closing a Deal in China

Negotiation process is involved in all walks of life everyday. Negotiation skill is one of the greatest soft skills interviewing officers lay emphasis on. It is not inborn but can be cultivated by training and continuous practice. It is imperative to possess this skill to succeed in this cut-throat competitive world.

 Now read the article below and improve your negotiation skills and your English for negotiations.  

1. Negotiation Preparation = Negotiation Success  Courtesy of Colleen Francis  

Mediocre sales people are notoriously bad planners. It can be said that they habitually “play” more than they “practice”. Going into most sales interactions unprepared, thinking they can “wing it” and negotiating “off the cuff”. Top negotiators know differently. Top performers know that in order to successfully negotiate with clients they must plan carefully or risk being left vulnerable. Without proper strategy, your opponents will use your lack of preparedness to their advantage. In other words, you are likely to give up more than you intended because you didn’t have a plan.

Here are 9 areas of planning to consider before you start a negotiation with a client:

1) Determine your goals.
Negotiation is the art and science of reaching an agreement that meets your and your client’s goals. Your strategic goals create the measure you judge yourself by at the end of the processes and need to be set before the negotiation begins. Your goals also will act as your guide during the negotiation, supporting everything you say, every move you make and every agreement you reach. Carefully planning your strategy in advance will ensure you reach the goals that you and your company want to achieve. Remember that all goals should be set using the S.M.A.R.T. formula (Specific, Measurable, Attainable, Realistic and Time bound).

2) What’s your BATNA?
What will happen if you do not reach an agreement with your client? One of the biggest negotiating dangers is being too committed to gaining an agreement and being unduly pessimistic about what would happen if the negotiation fails. In my experience, most sales people are overly committed to having to reach an agreement (sometimes at the expense of all profitability) when they have no other options. Do yourself a favor. Ensure you have at least 3 opportunities waiting to close (or negotiate) for everyone that you are negotiating now. These 3 other qualified opportunities are your “Best Alternative to a Negotiated Agreement (BATNA)” because they ensure you will never feel desperate to close business.

The willingness to walk away is the most powerful negotiation leverage you can have. You only will feel able to walk away, if you have something else to walk away to. Yes, you understand me correctly; prospecting is the key to negotiation success.

3) What is your position?
Specific goals for your negotiation can be called positions. Positions are simply your statement of what you need to get in order to accept the deal. You should take some time before the negotiation to document what you want to get, need to get and what would be nice to get out of the interaction. Writing down these positions will make them clear in your mind and will help you focus the discussion. While you are at it, it is good practice to guess at what the client will want and intend to get as well.

4) Hide and Seek.
As well as positions, we all have other things we want to hide from (or avoid) and seek in the negotiation. Often, these are more hidden or more political things. For example, your client may want to save face and you want to augment your reputation. You may want to avoid exposing conflict inside your own company and the client may want to avoid including certain colleagues in the process. During your preparation it’s valuable to ask yourself what you and the client seek, and want to avoid. It’s often the positions in step 2, combined with the needs and concerns from step 3 and the hidden political drivers that position the negotiation.

5) Find the missing link.
So, you know your goals and positions, and you have taken a smart guess at your client’s goals and positions. Now is the time to find the link between the two. Linking your goals to the customer’s goals is a key to effective selling. A negotiated agreement is only profitable if it satisfies all parties. The best way to accomplish this mutually profitable relationship is to focus on finding the missing link between the objectives of you and your clients. Of course it if difficult to do this accurately if you don’t know what your client’s goals are. Think of this as a sales challenge: the better qualified your client is, the more you know about them and understand their goals and the better prepared you will be for the negotiation. Great negotiators start preparing for the negotiation at the start of the sales cycle…. and never stop!

6) What’s your bottom line?
Your bottom line is the absolute, last resort and final offer on each key issue. It’s your walk away point. Setting a bottom line in advance of your negotiation is important because it makes it easier to resist the temptation of agreeing to an unprofitable deal. Setting a bottom line protects you from seller’s remorse and it makes it easier for others to participate in the negotiation with you because you can provide a framework for them to negotiate in. There are some downsides though. The most notable is that having a bottom line can discourage creativity and may limit your ability to capitalize on new information revealed during the negotiation discussions. Be careful not to set your bottom line too high. It’s easy to over estimate the value of what you are selling – especially if it is personal – like your car or house!

7) Identify your trip wire.
The best negotiators document a trip wire for every negotiation, which will indicate to them when they are close to their bottom line. Your trip line is established to ensure you do not enter into agreements that you will later regret. Establish a trip wire by identifying an outcome that is slightly better than your BATNA and bottom-line, but far from perfect. When a trip wire is triggered during a negotiation, commit to taking a break and thinking about the situation before accepting the deal. The last thing you want is to be forced into a position to take a deal that is worse than your trip wire. As a last resort, accept your trip wire and an acceptable end to the negotiation, ONLY if you are able to receive something in return.

8) Where are you weak?
No one likes to admit they are not perfect. Especially sales people! The truth is, no negotiation argument is perfect and yours are no exception. Everyone and every negotiation argument have at least one vulnerability. Your weakness is that spot that threatens the achievement of any one of your goals based on a real or perceived vulnerability in your argument. Don’t ignore or brush off a perception. Your clients’ perceptions of you are the reality in which you negotiate. When planning for a negotiation it is wise to consider your weaknesses and plan for effective responses.

9) Giving concessions.
In my recent No Free Gifts article we spoke about the art of giving concessions. The first concessions you always give need to be “non monetary”. In other words, something that does not sacrifice the price of the product. If the client will not accept a non-monetary concession than it maybe necessary to give a price break (monetary concession). For your point of reference, a concession is the act of granting, yielding or surrendering a right, privilege or gift. Your treatment of concessions will determine your success or failure in a negotiation and long-term relationship building. Always remember the cardinal rule: no free gifts! For a worksheet to help you plan your monetary and non-monetary concessions click here .

Sure, it may seem daunting to prepare for a negotiation. That is because often-sales people don’t like the thought of getting to work! According to CSO Insights, just 10 minutes of prep can increase your effectiveness by up to 42%. Knowing that, doesn’t it make sense too spend a little time thinking and planning before your next negotiation rather than simply jumping in unprepared?

 About the Author: Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (http://www.engage-selling.com)/. Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.

2. Language in Focus

3. Language tips

Show respect

English speakers, especially North Americans, quickly move to first names (although this is NOT a sign of intimacy or friendship) and begin to use informal language. This is meant to signal cooperation among equal partners.   

At the same time it is important to maintain an atmosphere of respect. You can show respect in English by using the following words: would, would like, could, should, might, I think, maybe, perhaps, etc.  

Use would like rather than want. It's more indirect and, therefore, is more polite and respectful.  Otherwise this could sound like a demand.

I would like to hear you talk about that first point again.   

We'd like to get back to you on it. 

I would like to welcome you to ...

Why would you want to ...?

What would you do with ...?

What would be wrong with …?

Why would you object to ...?

Use "should", "could", or "might" to remind or inform people about what to do next. Without such words, you could sound too much like a teacher or a policeman. 

We should discuss it …

Could we now move on to the next subject, which is ...

Let's go on to the next subject, shall we?

Could you go into more detail on that? 

What might have to happen for you to begin looking for a different (vendor, company, price, etc.)?

Use phrases like "I think" and "maybe" and "perhaps" to introduce suggestions.  These words do not indicate uncertainty; they express respect for the other person.  

I think we should start the meeting now.   
Perhaps I could give you some background information about that.   
Perhaps you will recall that …

I'm not sure I fully understand …

We feel there has to be a trade-off here. 

Use QUESTIONS to make suggestions. Keep in mind, however, that you are not asking for permission, but you are showing the other person respect by giving him or her a chance to disagree or interrupt before you go on.

So, can we go on to the next point now?
So, are we finished with that point? If so, let's go on to the next one.

Could we now move on to the next subject?

These strategies become less important when you get to know your partners better. People who know each other well can be much more direct in saying what they want and what they think. 

Overcoming Objections

"Your price is too high.”

Always acknowledge that the customer’s objection has a right to exist. Whatever it is they’re objecting to, give them the right to have the objection in the first place, and then you can work through it together. When you support the client’s objection, it helps put them at ease and makes them more willing to listen to the answer.

I can understand that you’re not happy with the price.

I get a sense that the proposal I sent has made you uncomfortable.

I sense that the payment timeframe doesn’t fit your needs.

I can appreciate why you’re concerned about our pay up front policy.

Yes, you’re right. As I mentioned, our prices are not the lowest in the industry. Did you find something lower from a competitor?

Most of the time objections are just smokescreens hiding real objections that your prospect doesn't want to disclose. As soon as you begin answering objections, they have another and yet another. Don’t answer an objection; try to find their real reasons.

How high is it? Have you found something else on the market for less? Is price the only consideration?

I can understand that, and let me ask you a question -- if this price was exactly what you were willing to pay, is this (your product/service, etc.) the solution you would go with today?

Just for the sake of argument, what if ...

Can I ask a hypothetical question?  Suppose that ...

Delaying:

We would have to study this. Can we get back to you on this later?

We'll have to consult with our colleagues back in the office. We'd like to get back to you on it. 

I've got to speak to/talk this over with....

You should say:

I can totally understand that. And _________ let me ask you -- if you did speak with ________ and they said whatever you thought was fine with them, what would your decision be on this today?

If your prospect asks for a discount …

The next time your prospect asks for a reduction in price, instead of just giving in, try responding with one of the following instead:

I can appreciate you're looking for the best deal, but I can tell you that we've already given you our best price.

You're smart to be looking for the best deal, but our pricing is always competitive, and I just can't go any lower.

A discount? (in a surprised tone)

Some clients will press ahead with their request for a discount even after you've given them one of the responses outlined above. Try to reassure your customer that they're getting the best price, and remind them of all the hard work you've both put into the deal. Try something like:

We've been 6 months putting this project together, I would hate to see it not go ahead because we can't settle on price.

I would hate to see this not go ahead because we haven't been able to meet your budget.

If your client is still asking for a discount, you may have to give it to them in order to close the sale. But before you do, ask them one of the following questions:

What is important to you about an x% discount?
Why is an x% discount important to you?

Try to get something in return:

In return for this, would you be willing to ...?

We feel there has to be a trade-off here. 

We would be willing to ..., provided, of course, that ...

We'd be prepared to .... However, there would be one condition.

Get a firm verbal agreement from the customer that this discount is all they will need to get the deal done. Try asking them something like

I'm not sure if I can get you this price, but if I can, is it fair to say that we can go ahead?

I'm not sure I can get this discount for you. If I can, though, are you willing to sign the agreement this week?

If you look at all the objections you get on a regular basis, you’ll see that they almost all fit into one of the four key categories:  “I’m not the decision maker,” “I don’t have any money,” “I don’t have any time” and “I don’t have any needs.”

Sales professionals need to know answers to these objections right up front; especially if you have to deal with them in English. So it’s a good idea to script and practice your answers to the most common objections in advance.

Sometimes having good answers to a customer’s first questions can help eliminate future ones in the sales cycle as well.

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If you’re dealing with Chinese companies for the first time, you’re bound to make a few gaffes when dealing with a business culture so different from your own. Here are some rules of the road: Seven Rules for Closing a Deal in China

by Geoffrey James http://www.bnet.com/2403-13239_23-204806.html?tag=nl.e713

2. Language in Focus

 That's all for today. Good Luck!