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Monday Mornings with Madison

MADISON COMMERCIAL REAL ESTATE SERVICES MADISON COMMERCIAL REAL ESTATE SERVICES
#92

BUILDING NEGOTIATING POWER

Negotiating the final terms of complex deals can be thorny.  Often, sales professionals find themselves in a situation where the customer holds all the cards. You may have invested time in the opportunity. You may have made a transaction or quota commitment to your manager.  As a result, customers may feel they can simply dictate terms. That’s a recipe for a win-lose outcome, with you and your company the on the losing end of the deal.

To create a win-win outcome, you must continually accumulate counter-balancing “negotiating power” throughout the sales cycle. Here are seven tips for how to build your “Negotiating Power.”

Negotiating Power Tip #1: Eliminate or thwart competitive threats.
Every business is vulnerable to competitive threats:  factors that the business cannot control. This is most clear right now, in the middle of a recession. Competition is a major source of many threats to business.  For example, a competitor may take a loss in order to bring a cheaper product or service to consumers. This is something that, on the face of it, you can’t do much about. But you are not totally helpless. The first step in thwarting or eliminating such a threat is to analyze the competition’s reason for doing so, and then make your own plan as to how to deal with that business threat. Identify your company’s unique selling proposition.  Perhaps form partnerships to overcome that competitive advantage. Then, use this information to convince the customer that your product or service is the only one that can adequately fulfill the customer’s needs.

Negotiating Power Tip #2. Develop at least three contacts inside the customer firm.
Today's most successful salespeople know that their job is to learn theircustomer's business inside out and offer solutions to the real problems they face. While you want to be your customer’s only contact at your firm, you don’t want to have only one contact at their company. Having more than one contact in a customer’s firm can provide you with perspective to your solution-building process.It can also give you information about the motivations and politics inside the customer’s firm.

Negotiating Power Tip #3. Show the customer your ability to see the big picture.
The customer can’t know everything about the firm, much less the market, so being an “outsider” gives you the ability to see situations more objectively. Indeed, one of the most valuable thing you can offer a client is your expertise and objectivity. Let them know you can see beyond the obvious.

Negotiating Power Tip #4. Create the legitimacy that comes from consistency.
While your sales presentation needs to be customized to the customer and their needs, your sales presentation should also be consistent from a branding and messaging perspective.  While that may sound contradictory, it isn’t. While remaining aware of the strengths and limitations of your product or services, state your company’s position and message clearly. Adhere to your firm’s policies and procedures, and be willing to explain why they make sense.

Negotiating Power Tip #5. Position all interactions in terms of mutual success.
Any negotiating you engage in should be done in good faith, with the objective of achieving a win-win, even if you are negotiating with Attila the Hun. If you are asked for a concession in the negotiation, don’t just give the concession or you may lose their respect, trust and possibly the business altogether.  Instead, try a give-and-take strategy.  For example, if a client asks for a discount, instead of just giving the discount, give something by taking out something of value. That is a win/win choice. Another option is a swap strategy. Give something provided they give you something in return. For example, in exchange for a discount you ask them to give you something which is important or of value to you. This preserves their respect for you and your product or service. A productive relationship is based upon mutual respect and understanding, and a sense of working together to achieve mutual goals.

Negotiating Power Tip #6.  Generate a solution that matches the customer’s needs.
Your value to the customer skyrockets when you help the customer to crystallize needs and visualize the right solution.

Negotiating Power Tip #7: Differentiate yourself from other sales reps.
It is important that you set yourself apart from the herd. Communicate clearly how you, as an individual, are a unique resource to the customer and use your own unique personality to your advantage.

In the negotiation process, it is important to keep power on an even keel. It is by balancing power that you can negotiate to achieve a win for you… and your customer!

QUOTE OF THE WEEK
"Negotiating is not something to be avoided or feared — it's an everyday part of life." Leigh Sternberg

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