Negotiations are part of the sales process, but they aren’t necessarily straightforward, especially because there is a buyer on the other end with his or her own motivations and needs. And sometimes that buyer has done some homework and is ready to make your job harder. But you can go into a negotiation with an upper hand simply by preparing ahead of time using these tips to turn the tide.
1. Do your research. Know as much information about the company you’re negotiating with as well as the individuals involved in the process. Information is power. Know what’s at stake for all parties. When you know the other side’s needs and intentions, you gain an upper hand in negotiations and might walk out with a better deal. In fact, you’re not prepared to negotiate until you thoroughly understand the other side, and why they’re “in it.” Do your research ahead of time to learn:
- The company’s goals, pressures, options during negotiations
- The negotiators’ personal goals, pressures, options
- Their bottom line
- What will happen if they decide to walk away from the negotiations?
- What are they willing to concede?
2. Know your position. In addition to understand the buyer, understand where you’re coming from. Why are you involved in the negotiation and what do you expect to achieve? Be absolutely certain what your stance would be in the following scenarios:
- Best-case scenario. What does your ideal outcome look like? Is it acceptable to the other parties involved? This may be a pipedream, but you could also get lucky.
- Worst–case scenario. What is the worst possible circumstance in which you will still sign the deal and do business? In other words, what is your bottom line?
- Anticipated/expected scenario. What is the most probable result? What conditions/concessions might be involved to achieve this result?
- Break point. At what point will you get up and leave the negotiations? This point is important because it distinguishes what is a good deal vs. a bad deal for your organization. It is an absolute limit on what you’re willing to accept as a reasonable deal.
- Backup plan. What’s your alternative to signing a deal? What will you do if you can’t reach an agreement? Having a backup plan is a powerful mechanism that will alleviate the pressure to make a deal.
3. Set the tone of the negotiation by speaking first. You can set the tone for the meeting even before it happens by using a meeting agreement to establish the structure for the meeting. The meeting agreement should include the time, the agenda and the outcome that you want to manage the meeting to. Then when the meeting starts, speak first. “When we’re through today, what would be a great result for you?” would be a good question to start with.
4. Ask more questions. By asking the more questions than the buyer, you’ll determine the content and direction of the negotiation.You control the negotiation by asking questions and listening, not by monopolizing the conversation. Try to get the prospect to complete a shopping list of his or her personal and organizational needs and understand exactly what he or she wants. Remember that information is power.
5. Don’t argue. Even when you believe you are right, it’s not appropriate to argue with the other players. An argument will hurt any rapport you might have developed and sow the seeds for failure. Negotiating successfully depends on a collaborative effort to share information, not on trying to prove who is right or wrong.
Just as you’re entering the negotiations with a set goal, so is the buyer. The more you can know about that buyer and your own motivations, the stronger your position. And you can maintain that upper hand by setting the tone and asking the questions.