Posted by: Nesha Milicevic
Typically a negotiation is a discussion between two or more people that have a different starting point to reach a common solution. There are two places where the negotiation needs to happen: the so called external or real world which is usually your starting point and the buyers’ side of things which is something that will influence their decision. In order to successfully close a sale you need to overcome any obstacles on the way and that often involves changing the buyers’ position.
Before you even start any kind of negotiations you need to make sure that you are well prepared in advance. Getting the right information is crucial and this involves research on the buyer, their company and their needs. You need to make sure that you have the proper understanding on where the buyer is coming from, what are their price expectations and what is important to them.
Once you have all these parameters in place the focus needs to shift to the value and benefits of what you are selling. Often a buyer already has a price in mind and has compared it to other products, and this is what determines their positioning. The negotiation should start by agreeing on what both parties have in common bearing in mind that the objective is for both the buyer and seller to see the sale from the same viewpoint. The price should never be made a focal point of the negotiation; it should all be about the value of the product.
Determine where your BATNA (Best Alternative To a Negotiated Agreement) is and use the 80/20 rule: Eyes and ears should be used 80% of the time and mouth 20%. Before you start making any price adjustments make sure you are well aware what will be the turning point that will motivate the buyer to agree to the sale. Is it important to the buyer to complete the sale at a cheaper price or are they determined to get value for their money? If you start negotiating prices or giving them additional benefits and value before you have a proper understanding of the buyers’ motivation you could be leaving money on the table and still not even be close to closing the sale. At the same time you have to be aware of your limitations and boundaries. There is no point in making a sale if you are not making any money on it; this is the reality of things. At this point it is probably better to ask the buyer directly what it would take for them to agree to the sale. It could be that they are looking for extras and add-ons which would help influence their decision.
During the entire process it is very important that you build trust with your buyer and that they never question your integrity and professionalism. We need to understand that the negotiation technique is a crucial part of the sales process and that it needs to be built into the initial stages of the meeting, so asking questions and being able to adapt to the situation is a crucial part of the process. Most people feel that Negotiation is a gifted skill. It is a false impression. Negotiation is a learned skill.
It requires three essential attributes to negotiate successfully:
- A carefully conceived plan with all of the parameters established prior to the meeting;
- The necessary patience to work through the difficult process without losing the sight of the final goal;
- A genuine desire to make to a conclusion where both the buyer and sales person mutually benefit.
Using strategic sales techniques places the sales person in a position to better negotiate to a win-win conclusion. Negotiating requires using your communication skills throughout the process.
One of greatest skills is the use of L-E-A-P in handling objections.
L-E-A-P process helps to handle negotiation without compromising the relationship.
LISTEN – Practising Active listening skills during the negotiation give the sales person advantage in gathering information about customer’s needs. During the process of exploring for information or dealing with a problem, you must listen carefully to what is being said by the customer.
EMPATHIZE – In this second element the sales person must empathize with what has been said by the customer. This will give them the confidence that you really heard and understand what they said. Acknowledging customers’ needs and concerns creates a positive environment and letting them know that you are willing to work with them to make it a win-win outcome.
ASK QUESTIONS – In this element, as a sales person you ask for greater understanding of what the customer is saying. This is a critical element because it gives customer an opportunity to mention their issue at the same time an opportunity for the seller to uncover how much the customer is willing to compromise.
PRODUCE – In the fourth element, it’s time to take action and produce results on behalf of the buyer. Without reacting to the customers but focusing on your final goal and creating a win-win solution, the customer will perceive your desire to become partners.
When practicing L-E-A-P, one should avoid:
- Judgemental Behavior (Insisting, Arguing, Directing)
- Hostile Behavior (Criticising, Telling, Scolding)
If you have all these elements in place you are very likely to close the sale!