Business Monitor
How to negotiate This month, marketing expert, Paul Clapham, talks selling, negotiation skills and how to close that deal. I
was taught to sell. I was given training, a reading course and hands on tutoring in marketing. This went with my qualifications from school and university. My trainers and I considered me well-prepared for my career. But there was a yawning gap. I never had any formal training in negotiation skills. This really matters because I have needed to negotiate and been expected to do it ever since. Sure, I’ve learned the basics, but expertise? No way! Fortunately for me, it didn’t matter because nobody else had that skill. Imagine if you did, no matter how sketchily. Talk about the one-eyed man in the kingdom of the blind! When I say nobody has that skill, I don’t think I’m exaggerating. Ask around as I did and you will hear a lot of admissions of ‘no’, couched very carefully. Nor is the small business especially ill-provided with this ability. Even for the big players negotiation is seen as very much a peripheral activity.
Obvious fails
For any business this is an obvious fail. In printwear that’s particularly true because there are essentially two ways to become more profitable: to sell better and to buy better and both demand good negotiation skills.
Any business which is serious about sales will involve everyone in the process. In practice that means role play, telephone skills and perhaps most important planning the sales call (that applies just as much to a sales visit). So, what about negotiation? Over 80% of people who need to negotiate well never get a chance to role play the
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process despite most being keen to do so. (Source: Negotiation Culture Index). Businesses spend big money on getting people in front of the right person and every penny of it is wasted if they can’t negotiate. Just like a salesman who fails to close, negotiators have a dozen reasons for failure, none of them remotely close to ‘I got it wrong’. Negotiation is a classic case of ‘nothing succeeds like success’. If you know that your whole organisation is behind you, you feel the benefit not the pressure. In many cases you can repeat what you have done previously although don’t presume so. That’s why it’s critically important to have prepared for this meeting as with an individual. Do your preparation properly and you’ll find the other guy starts doing and saying what you want to see and hear.
Be patient
You have to be patient. ‘Yes’ comes at the end, not part way through. Negotiation is like solving a crossword puzzle – it takes time and all the parts have to fit before you can call it a success.
With a crossword you may feel satisfied if you solve all but three clues. Much the same applies to negotiation. Before you sit in front of the customer, you should have decided what is your BATNA – best alternative to a negotiated agreement. This will typically reflect your corporate strengths and weaknesses: you can’t get my quality and delivery guarantee at a better price – mix up the benefits to fit. Where will you concede a foot to save a yard?
Your final position on this, when the customer has blown your BATNA to blazes with an impossible list of demands, is to say, ‘sorry, I can’t help you’, and walk away. Some will say that approach is a cop-out, you go on negotiating until you hear no. Good luck with getting more work from that client!
Ask lots of questions. This is also true of selling. A key difference is that you want to know the client’s priorities. ‘The MD’s wife will be wearing one at our summer garden party’, is a shout for quality and so price, well it’s not so vital.
I have also read the recommendation to repeat the answers back to the customer for reassurance. They’d better not try it on me! As far as I am concerned it makes both parties look like idiots, thank you very much, goodbye.
Listen carefully
Listen carefully to the customer’s answers, instead of thinking about what you plan to say next. Within what they are saying quite probably are lurking several buying signals. They won’t be as blazingly obvious as ‘I want 30 white rugby shirts’, but ‘how easy to wash are rugby shirts’ is hand-rubbing time. A trick I learned in my researches was about anchoring the price. Apparently, the first number quoted in a meeting typically anchors price discussions. The writer I’m quoting didn’t say what happens if you go way over the top, but let’s assume realism. As a throwaway line you refer to a per item price of £5.80 and the client’s needs are such that you can deliver at £5.00. You have however set £5.80 as the benchmark around which price will be discussed.
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