Apr 20, 1997 12:00 PM, Ted Tate
Before any sales call or negotiation, you should have an idea of value: How much is what you are selling worth in the real world? Also, know as much about your opponent as possible. And always know the lowest possible price acceptable to you before going in. Write out the following information before any negotiation.
* Determine your best, optimum deal, the one you want.
* Determine the very lowest point to which you'll go and still do a deal.
* Determine your walk-away point, the point when you'll walk away and not look back.
* Set your terms higher than you'll really go so you have room left for letting the opponent win something.
Life, as with sales, often seems like a series of small dogfights in the war of getting what you want - the battle waged with a coworker to win a promotion, or with a boss to gain a raise, the fight to get the best price on a home, not to mention the bloodshed involved in coexisting with spouse and kids: which side of the family to visit for the holidays, what brand of tennis shoes your son will wear. What's the common thread in all of these activities? Negotiating.
Sure, you could just attack and take what you want, but you could be looking at a lost client or a lengthy jail term. Better to convince the other party to give you what you want. And that's where the art of negotiation comes in.
Study your strategiesIf negotiation is an art, negotiation strategies are the science. You can have a true talent for sales, but if you don't know the basics, you can be blindsided. Not knowing your negotiation strategies won't hurt you much in the everyday life of your family. However, if you sell for a living, you must, in self defense, understand these tactics, because your opponent will certainly be using them on you.
Many salespeople taking their first negotiation course are amazed to recognize many strategies they have been shot down with themselves in past negotiations. These same strategies have been used on them by their prospects and customers (and probably their kids); the salesperson just didn't recognize what was going on.
Although you'll never find a complete list of all negotiating strategies, here are some of the common ones you will find useful in any negotiation, whether you're a buyer negotitating the purchase of a new car or a seller selling a large system to a key customer.
Keep an emotional distanceBe very careful about starting to like someone. The minute you do, you can sabotage the results. It's fine to be friendly and likable, but you are not seeking to make personal friends at a negotiation. Never let people give you a guilt trip so you want them to do better in the negotiation.
If someone starts to tell you how tough things are, how badly he needs to make a sale or how bad times are at home to make you feel sorry for him, it is probably a negotiation strategy. It's a poor one, but it's still a strategy.
Be nice but never build up peopleSome people get into negotiations and have a neurotic need to compliment people and their possessions. Some people call this buttering someone up. Frequently this behavior comes from having low self-esteem, of feeling unworthy as compared to the opponent.
A little of this goes a long way. It's certainly OK to be nice, to behave in a likable way and observe the rules of good manners. But anything more can give the feeling that you are overly impressed, giving the salesperson a greater feeling of power over you during the negotiation. Your opponent may think you are needy or desperate and therefore becomes very inflexible.
Don't buy the "standard practice" linePeople fall for the line "There's nothing I can do, it's standard practice" all the time. Unless your opponent comes down from a mountain carrying stone tablets, nothing in the world is standard. Nothing in the world can't be adjusted or changed so long as both parties agree.
Opponents use this strategy so you'll assume no one would want to change anything because it's standard. This is nonsense. Sign nothing you don't fully understand. Don't agree to anything that is not acceptable.
Along these lines are situations where you are asked to sign a standard contract. As you read it, you may see things you don't agree with or items not even discussed. When you object, your opponent says, "Don't worry, that's just our standard contract. It doesn't apply in your case." The minute you sign, it does apply. Don't let someone's verbal representations sway you. Either change the contract before you sign, or rewrite one you can.
Don't negotiate endlesslyAmateur negotiators start out with small concessions and escalate to larger ones. This always makes an opponent feel that as the concessions get bigger and bigger, there's more. If the last concession you made was the biggest yet, just how big might the next one be? It gets to the point where you are afraid to stop. Even when the concessions end, your adversary will think you would have given up more.
Master the flinchIn a nutshell, the flinch is how you react to prices and terms being quoted. Never forget that the people negotiating with you are watching you closely for reactions and responses.
Simply make it a habit to act shocked or disgusted whenever you hear the price of anything. Using a mirror, practice making an appropriate face, and practice raising your voice to accompany this behavior.
Remember, your opponents will be watching your behavior. When you become upset, it forces them to defend their price. Often that comes along with throwing in items they would normally charge extra for or even an offer to reduce the price. If you don't flinch, some people will think you are OK with the price and start to become inflexible, thinking you are close to an agreement.
Another place to use the flinch is when you are figuring out prices to see whether you can offer a discount. Even if you can easily do this in your head, don't. Take out a pad and pocket calculator, make faces and grimaces, mutter to yourself.
Don't overdo it, or it won't be believable, but make people think this is a big deal, and you are really going to the wall for them. They will value what you offer much more.
Your limited authority in negotiatingSome people love to have big job titles; it makes them feel important. But in selling, that's a mistake. For many years I was the president of a large burglar and fire alarm company with many employees. I never had a business card with my job title; it just had my name. I'd sometimes be involved with customers, but by the time I got involved it would be over some problem.
I always had the employee who'd bring me in introduce me as the manager, never the company president. In that way, if the customer's demands were unreasonable, I could always plead no authority.
In your selling pursuits, you'll find people with unreasonable expectations who get mad if you can't fulfill them. Even if you have the authority, it's sometimes best not to let people know. This way you can delay or even avoid concessions without creating anger.
Ask for the moonAlways ask at the beginning of a negotiation for everything you could want.
In negotiation, especially win-win, you have to ask for more than you will settle for. If not, you have nothing to give back, so the other party feels unsuccessful. Some people will get so angry with your unwillingness to concede anything that they'll walk away, even if the deal is what they were originally going to settle for. And there's always the chance what you consider outrageous may well be something your opponent will consider reasonable and grant you.
Negotiation isn't really a talent; it's a craft, and the better you hone your craft, the better salesperson you'll be. Of course, if you have a real flair for sales, the results of using these strategies could surprise even you. At the very least, being aware of these strategies will keep you from being on the receiving end of a sales blitz.