Before you close a sale, you’ll have to sit tight through the negotiation phase. In sales, negotiation is one of the real tests of whether your company can work in the long term with another company.
But how do you ensure the negotiations will bring in the business your aiming for? Here are six ways to make negotiations go more smoothly.
Set a schedule
Whether you need a series of meetings, or just one specific meeting, schedule it as soon as the opportunity arises. Nobody has time to waste in business. So you’ll find that the company you want to work with should be receptive to the idea of scheduling time for negotiations. If there is some resistance, don’t be afraid to ask what is holding them back.
Ask lots of questions, and then listen
One of the major mistakes people in sales make is not understanding the prospective client’s needs. If you don’t get all the information you can before negotiations start, then tricky questions on their side wont get the answers from you that will seal the deal. So before you even get to the negotiating table ask as many questions about what the prospective client wants from your product or service.
Sure you want to close a deal with the best outcome for your business, but don’t push so hard for concessions you scare away the prospect. Doing business is a reciprocal arrangement. You’re helping them out with a (hopefully) superior offering, they’re keeping your business going by buying that offering. Any reputable business looks for a win win scenario. This ensures a long lasting business relationship where both parties gain something worthwhile.
Know your bottom price
Everyone likes to get a good deal, but you need to know what your permitted bottom price is before walking into negotiations. The difference between knowing your bottom price and not knowing is the confidence it gives you. If you don’t know where you draw the line, that insecurity could jeopardise the deal. It also prevents you from making a deal based on a price your company cannot make a profit from.
Know your extras
When making a deal you’ll have some extras up your sleeve to sweeten the deal. Don’t go for gimmicky extras, they have to be real and add a sense of worth to the deal. These can be lower prices over a certain volume of orders, or a particular after sales service that companies normally pay for. Don’t forget to highlight how great your normal standard of customer service is. Sometimes what seems like normal to you can seal a deal – the customer may not be used to your high level of customer care.
Don’t be afraid to walk away
Of course the deal is important, but is it really worth it if you have to concede too much? Remember your bottom price? That’s the number where you are still making a reasonable profit from the deal. If the other company demands so many concessions that you exceed your bottom line, the deal isn’t good for your business. At every stage during a sales process you should be asking yourself whether the deal is worth pursuing.
Negotiating in a sales environment shouldn’t be daunting. Your job is to find a happy middle ground where both you and the customer walk away happy with the deal you’ve struck.
It’s an interesting question, isn’t it? Do you deserve a promotion? Do you find yourself thinking about all the effort you’ve put in over the last year in your Dubai marketing or sales department? Are you wondering if it is enough to get a promotion?
If you have been asking yourself this question, it is time to find out if your company feels the same way as you do. Seeing other people promoted before us can be demotivating – one of the main reasons people give for leaving a company is because they don’t feel their work has been recognised by their managers.
So it’s time to compile a list of everything you know you’ve done for the company, and how it has helped your company. Did you set up a meeting six months ago that led to a big deal being signed recently? Have your skills at forecasting the market meant your company is leaner and more flexible than your competitors? These are the questions you need to be asking yourself.
Don’t be afraid of asking for a meeting with your immediate superior and human resource department. If you really feel that you deserve a promotion, act straight away. Don’t let your feelings fester.
For a meeting this important, don’t go in empty handed – the conversation won’t go well if you are unprepared. Go back to your list and add any letters or emails of congratulation so you can show what people think about your work.
Having this conversation with your company can yield interesting results. Although they may not have a position for you straight away, there could be an interesting sideward promotion. It may not be exactly what you would like to do, yet the experience gained here could provide you with a better shot at a promotion to your dream job next time round. It entirely depends on what your career goals are.
And talking of goals, you need another list to outline what your career goals actually are. You don’t have to divulge everything on this list to your company, but you do need to be clear in your own mind. If your ultimate aim is to be the marketing director at Dubai’s leading pharmaceutical company, you need to start looking at the kinds of positions that will get you your dream job. They may not necessarily be what the company wants to offer you, in which case, getting the promotion you want may mean leaving your company.
If all this seems daunting, you should investigate courses that are aimed at giving you the right skills to develop your negotiation abilities. Coaching is an invaluable tool to help you reach your target career. And from a business perspective, coaching is a very good way to retain highly motivated staff. If you have a person on your team who shows they want to step up a level in their career, but you feel they are not quite there yet, business coaching will help you both. They may find your organisation can provide training that another marketing company in Dubai cannot. It’s far better to retain talented staff than to lose them because you didn’t listen to their desires for a promotion.
There is an increasing amount of discussion about recession returning. All the media are gloomy about the continuing impact of recession on businesses.
This has an effect on businesses and their people, not only in terms of generating negative thoughts but believing them. These negative thoughts affect the way in which businesses see their prospects of future survival. It is vital, if you want to succeed in these conditions in any market to ensure that a positive outlook is maintained , essential marketing, sales and negotiation skills are energised and activities increased. In times of recession it is tempting to cut sales activities which can only lead to further limitation of sales results.
During such times customers place increasing importance on finding suppliers on whom they can rely and who provide them with valuable support.
When the going gets tough it’s not the time to withdraw but rather to become more proactive – increase marketing efforts, strengthen sales activities and sharpen negotiation skills. Even if the business potential is limited, it is essential to be even more active and more focused to ensure of being well placed to capitalise on the opportunities that will exist when recession is finally over.
Customers will be looking for ways to improve their profitability through negotiating better prices and value. They will be spending more time in analysing the differences between competing offers, however, this will not be limited to price alone. They will also be making comparisons of:-
Customers/buyers are not committed to buying at the lowest price – they know that the lowest priced supplier does not have 100% of the market and they recognise that there is always price differentiation. It is rare that the lowest priced offer secures the business.
What is more important, is for the customer to achieve the lowest cost of ownership of the product or service. Attempting to negotiate a single variable such as price will almost certainly lead to suppliers having to concede part of their profit to the buyer.
Effective negotiation requires suppliers to thoroughly understand the value proposition of the competition compared to their own. The implications are that it is essential to assess all of the variables on their values not just price. Think about the factors that influence the customer’s evaluation e.g.
When negotiating, it is in the interests of both parties to establish measurable, additional value by trading multiple variables simultaneously. It is much more effective to avoid reacting to price reduction demands and to focus on demonstrating how to help the customer achieve their internal objectives whilst getting valuable concessions from them in return.
Market recession provides great opportunities to increase credibility and customer acceptance through demonstrating a thorough understanding of their value requirements and trading all variables effectively.
The ISM Training Dubai courses “ROI Selling Skills “and “Advanced Negotiation” provide high skill building which will contribute significantly to maintaining profitably and securing competitive advantage during recessionary times.
Negotiation is a dynamic, complex skill and one that is difficult to master. During a successful negotiation both parties whilst inherently in conflict with each other must reach a mutually beneficial agreement and be broadly satisfied with the outcome (Win-Win). Both sides should feel that a fair conclusion was reached, the agreement will be delivered as negotiated and importantly want to work with each other again. The adversarial element must be tempered if you are to reach a reasonable, successful outcome and a number of variables may have been traded. The variables (must haves, ideals, loss leaders) are at the heart of the negotiation and their importance to each party will be on a sliding scale, it is up to you to determine their priority through sound groundwork and optimize the trading. Be aware that minimizing a trade may not work in the Middle East. Indeed the first step,’ preparation ‘should have guided you towards any cultural context of discussions. If you are negotiating in an international setting your cultural intelligence, knowledge and cross-cultural skills will need to be developed. There are several stages in negotiation which need to be followed in order for it to be successful, it is a process.
Planning for negotiation will pave the way for smoother communication, you will be able to predict most if not all outcomes and you will have a good knowledge of all parties’ needs .Negotiation cannot be rushed , you need to first establish a rapport and be able to effectively and clearly communicate without being too jargonistic. You need to build trust with shared values, views, attitudes, experiences, and interests.
Your communication should have the right balance of empathy and yet be able to project your own ideas. Your persuasive communication skills should focus on listening more than questioning, with no perception of their position you cannot be persuasive. Make sure it is focused on helping them reach a decision; they need to explore your ideas and come to a net benefit for them. The persuasion process should mimic the stages they go through in their decision making process e.g. in exploring their concerns you should be ready to handle objections. Ultimately you need to have a commitment to act but this cannot be achieved without first exploring the stages involved in decision making. Only once agreement is reached can you move onto the final negotiation. There are many useful tactics to consider during negotiation but ultimately you should concentrate on building agreement, listening to and interpreting their language and maintain a open professional outlook that acceptably drives the negotiation to a win- win conclusion. Concessions should not be given up without extolling their benefits. Remember cost may not be the key variable you think it is after you have successfully established the true value /potential of your business partnership and ability of your product to meet their needs.