Selling & Negotiation Skills_2

What is Negotiation?
Negotiation is the mean by which people deal with their differences. Whether those differences involve purchase of a new automobile, a labor contract dispute, the terms of sale, a complex alliance between two companies, or a peace accord between warring nations, resolutions are typically sought through negotiations. To negotiate is to seek mutual agreement through dialogue. A business negotiation may be a formal affair that takes place across the proverbial bargaining table, in which you haggle over price and performance. It could be much more casual, such as meetings of a manager with his subordinate employees whose collaboration is needed to get a job done. If you are a supervisor, manager, or executive, you spend probably a good part of your day negotiating with people inside or outside your organization often without even realizing it. Given the role of negotiations in our personal and professional lives, it is important to improve our negotiating skills. Even a modest improvement in those skills can yield a sizable payoff, such as larger pay raise, a better deal on a home purchase, or more effective working arrangements in the office.

Types of negotiations
Distributive Negotiation: A negotiation in which the parties compete over the
distribution of a fixed sum of value. The key question in a distributed negotiation is who will claim the most Value?. In distributive negotiations, a gain by one side is made at the expense of the other. Distributive Negotiation can also be referred as a Zero-sum, or constant-sum, or the winlose situation. A sellers goal is to negotiate as high as possible, a buyers goal is to negotiate as low as possible. Distributive negotiation is more like a tug of war, each negotiator aims to pull the final deal point as close to his or her sides desired price as possible. Information plays an important role in Distributive Negotiation. The less the other side knows about your weaknesses and real preferences, and the more it knows about your bargaining strength, the better will be your position. Key points to remember to achieve success in Distributive negotiation The first offer can become a strong psychological anchor point, that one sets the

bargaining range. The negotiation outcomes often correlate with the first offer. So start at the right place. Do not disclose any significant information about your circumstances-Including why you want to make a deal, your real Interests or business constraints, your preferences among issues or options, or the point at which you would walk away from the table. It is advantageous, however to let the other side know that you have the good option if this falls through. Information about the other side can benefit you. Learn as much as possible about the other sides circumstances and preferences-Including why they want to make a deal, their real Interests and business constraints, and their preferences among issues or options. Exploit what you learn about the other side in setting your first offer or demand. Dont overshoot. If you claim aggressively or greedily, the other side may walk away. You will have lost the opportunity to make a deal.

Integrative Negotiation
Integrative Negotiation: A negotiation in which the parties cooperate to achieve
maximum benefits by integrating their interests into an agreement. These deals are about creating values and claiming it. In Integrative negotiation your task is two fold: 1) to create as much as value for you as well as for the other side. 2) to claim value for your self. Integrative negotiation could also be termed as win-win situation. Integrative negotiation could also be termed as collaborative bargaining, for this type of negotiation, the parties should look for creative options, and not focus on which concessions to make. You have to believe that its in your interest to look for ways to benefit your negotiating counterpart, your goal is not to hurt them, but to help them at little cost to your self and have them help you at little cost to them. The more creative you are at coming up with things that are good for both of you the happier both of you will be. Fisher, Ury, and Pattons popular book, Getting to yes shifted peoples focus from I-Winyou-lose situations to Integrative Negotiations in which each party can claim satisfaction.

They provide approaches both for creating value (focus on Interests, not position, separate people from problems) and for principled value claiming (Identify objective standards) Key points to Remember the Integrative Negotiation Provide significant information about their circumstances. Explain why they want to make a deal. Talk about their real interests or business constraints. Reveal and explain in general terms their preferences among issues or options. Consider and Reveal any additional capabilities or resources they have that might meet the other sides interests and could be added to the deal. Use what they learn to find creative options that will meet the interests of both the parties to get the greatest extent possible.

The negotiators Dilemma

Multiple Phases and multiple parties

a) A Natural coalition of allies who share a broad range of common Interests. A natural coalition is hard to break Eg: an environment agency and a citizen's nature conservation group might form a coalition to block development initiatives even without explicit agreement to do so. A single-issue coalition, in which parties that differ on other issues unite to support or block single issue. E.g.: A labor union and a nature conservation group might form a coalition to block an antiunion developer from building a shopping mall in a wooded area. Each has a very different reasons for joining the blocking coalition, which makes it feasible for the other side to put a wedge between them. The challenge of multiparty negotiation is managing coalitions, breaking them apart or keeping them together depending on your own interest

Key concepts in Negotiation

Improving your position Improve your BATNA 1. Anything that can be done to improve your BATNA will strengthen your position. 2. If you have the strong BATNA and if you are certain that its much stronger than anything the other side can muster, then discretely let the other side know that youre negotiating from a strong point. Identify other sides BATNA Knowing other sides BATNA is extremely helpful when you can obtain it. You can do this by: 1. Contacting sources within the industry 2. Checking potentially relevant business publications. 3. Reviewing annual reports (or public Filings) 4. Asking questions informally of the negotiator or others within the company. 5. Imagining what our interests, preferences, and your needs, would be if you were in their position. Weaken other partys BATNA Anything that weakens the other sides alternative to a deal will improve your relative position. When you have no alternative No negotiator is in a weak position than one with no alternative to a deal. In this case, the other side can dictate the terms, The BATNA less party is a deal taker not a deal maker. BATNA is not always simple Most business negotiations involve many variables, some of which cannot be quantified, this makes for a fuzzy BATNA. In transactions that involves price and various other features you can make BATNA less fuzzy by assigning a monitory value to the various features and adjusting the BATNA value by that amount. Price is not always the fulcrum of negotiated deals. Qualitative issues also matters.

Reservation Price
The reservation price (also referred to as a walk-away) is the least favorable point at which one will accept a deal. Your reservation price should be arrived from your BATNA, but it is not usually the same thing.

ZOPA
ZOPA (zone of possible agreement) is the area or range in which a deal that satisfies both parties can take place, it is the set of agreements that potentially satisfy both parties. Each partys reservation price determines one end of ZOPA.

The ZOPA itself exist in the overlap between these high and low limits, that is between partys reservation price. Value Creation Through Trades Negotiating parties can improve their positions by trading the values at their disposal. Value creation through trades occurs in the context of integrated negotiations. It usually takes the form of each party getting something it wants in return for something it values much less. For a supplier, that greater value might take the form of an extended delivery period. For the customer, having deliveries spread out during the month might be of no great consequence, but for supplier with strained production facilities it may be very important. For a customer, greater the value at low cost might take the form of three months repair services if needed. For a vendor who has great confidence that its product will need no repairs during that period, free service is nothing of consequence. In providing it to the customer values the repair service highly. For an employee, the opportunity to work from a home office two days each week may produce great satisfaction while costing the employer nothing.

4.8 SELLING AND NEGOTIATING

Sales Negotiation can be defined as a process for resolving conflict between two or more parties where both or all modify their demands to achieve a mutually acceptable solution. You may note from this definition some of the following important points : 65

 Negotiation is a process of resolving conflicts and if there are no conflicts, there is no need to negotiate; There is a need to resolve conflicts, more so with your customers. If we dont resolve conflicts we may even loose them; Negotiation does not mean persuading the others to accept our offer. Rather we should listen to others, and their propositions. If possible modify our stand or suggest/guide the others to modify their demand; and Through negotiations we try to reach at a mutually acceptable compromise to solve a problem. SELLING can be described as the process of identifying customers, then getting through to them and persuading them to act, or accept our propositions. Whereas, NEGOTIATING is a process of getting the best terms, once the other side starts to act on their interest. One important point to keep in mind is that negotiation is not just stating a grievance or point of conflict. As you must have experienced, complaints at best can produce apologies and at worst they lead to arguments. In negotiation what we really want is to suggest or encourage a proposal which will put things right, and take the parties concerned to an acceptable solution. Negotiation is meant to lead to a solution or situation which is profitable or acceptable to both the parties concerned. Like in the case of business negotiation for starting a new business or venture between two organisations or persons. Here, its a process of selling each others or each others organisations views and goals or the selling of business ideas. Negotiation, as seen in the above situation, is a process of putting forward suggestions to arrive at a mutually satisfying and/or profitable situation. In the selling situations a negotiation opportunity arises whenever the buyer and the seller differ on terms on sale, be it price, discounts, terms or place of delivery.

4.9 THE NEGOTIATION CONTINUUM AND STEPS

Negotiation involves movement of both the parties. Thus, in a negotiation we must have somewhere to move from and somewhere to move to. We move from our ideal position to a settlement point that is acceptable to both parties. Our opponent also does exactly the same. It is the relative bargaining strength and skill of the negotiators that decides the position of this settlement point. Ideal Limit A Bargaining Arena B Limit Ideal This sample in Figure-5 is static. Negotiation in reality however, is a dynamic process. As the negotiation proceeds, both the sides have to review and modify their limits. If you look at the above continuum in the context of sales process as a salesperson your ideal position is to sell your product at a maximum benefit while from the customers angle the ideal position might be to get all the benefits at a much lower price. As the sales process moves, both of you are
Figure-5

likely to move from ideal positions and reach a mutually agreeable state if the transaction has to take place. 66

The negotiating process, for understanding purpose is broken down into the steps (see Figure-6) through which the negotiations will go if an agreement is to be reached. However, please keep in mind that this is not a rigid order, and the time and attention devoted to different step varies.
Figure-6

However, it is essential for you to appreciate the importance of each stage, irrespective of the sequence in which they may take place. Table-1 summaries each of these studies.
Table-1 : Different Steps of Negotiation
Step What you should do i) Preparing - Have you decided your objectives? - Have you prioritised them? - Are they realistic? - What are you opponents objectives? - Do you have information regarding buyer attitudes, personalities, assumptions etc.? - Is your strategy simple and flexible? - In a group negotiation, have each members tasks been clearly defined? ii) Discussion - Always try to avoid interrupting, talking too much, using sarcasm and threats. - Practice listening, and summarizing. iii) Signaling - Is your signal generating some movement? - What signals have you made? - If your signals have been ignored, have you tried rewording them? - Are you listening attentively for your opponents signals? iv) Proposing - What is the language you are using to convey your proposal? - Have you itemized your proposal? - While receiving a proposal ensure that you do not interrupt it. v) Offer - Before making an offer review your opponents and your own objectives. - How can your offer meet all/some of your opponents inhibitions/objectives? - Have you considered all the possible variables in your offer? vi) Bargaining - Everything must be conditional. - Decide what you require in exchange for your concessions. - Keep all unsettled issues linked. vii) Closing and agreeing - Decide where you intend to stop trading. - What type of close are you going to use? - Always list the agreement in detail. - If the agreement is oral, always send a written note to your opponent, as soon as possible after the meeting. Source : Gavin Kennedy, John Benson and John McMillan, Managing Negotiations , (London 1990)

1) Prepare What you do, or dont, before you arrive at the negotiating table will become evident when you get to negotiations. If you are not fully prepared you can only react to events, you cannot
CLOSE / AGREE BARGAIN OFFER PROPOS E SIGNAL DISCUS S

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PREPARE

lead them. In the preparation phase you define what needs to be achieved and also decide how it will be achieved. As a negotiator you must know what you want in the short-term and what in the long-term. You must be aware of your opponents expectations and environment. For easy understanding we can sub-divide preparation under a number of key headings: objectives, information, concessions, strategy and tasks : a) Objectives The first priority in preparation is to decide your objectives as everything else will follow this. Once you decide your objectives, you must assign relative priorities and question how realistic they are. If your objectives are clearly unattainable you are not likely to gain anything from negotiation. Once you decide your objectives, these also become your criteria for measuring whether the negotiation has been a success or a failure. The first step in deciding objectives is to make a list of all your objectives. The objectives set in any negotiation are only fixed at a given moment of time. Circumstances, people, information, tourist season and so many other factors can alter the objectives and their ranking. After you have listed down all the objectives you can classify them into three categories: Like to get, Intend to get, and Must get. Relating this step to the sales process is very important for a sales manager/person for then only you decide your call objectives before you meet the customer and categorise them. For example, you are the sales representative of a hotel which has 350 rooms inclusive of all room types such as Single, Double, Deluxe, Suite, etc. And daily, during the off season from a particular travel agency you may: Like to get : 30 rooms at 25% profit margin Intend to get : 25 rooms at 20% profit margin Must get : 20 rooms at 17% profit margin b) Information To establish and prioritize your objectives realistically, considerable amount of information is required. The person with the best information in a negotiation carries a lot of power. After you collect all the information, decide which information to use and which not to use. After deciding your sales objective the more information you can gather about your customer in terms of his or her personality, likes and dislikes, past usage pattern, etc. the easier it will be for you to plan a strategy to deal with him or her. In case of dealing with an organisation it is better to know the organisations nature of business, business partners and likely expectation from your company and so on. c) Strategy Strategy, as a separate step, will be discussed in detail later in this Unit. However, you must keep in mind that in preparation phase your strategy will need to be mapped out. Thus, the framework or game plan you need to follow to achieve your objectives must be clear. Always ensure that your strategy is not too inflexible. It should be able to respond to developments within the negotiation. Thus, at any stage of negotiation, if you feel that the strategy is not working, you must be able to modify it.

d) Tasks In the day-to-day minor negotiations we act as an individual rather than as a member of a team. However, in more important negotiations both the groups involved are likely to have more than one member. In such situations where the group has more than one member it becomes very 68

essential that each members role and the tasks that he or she has to do are clearly defined and explained. Many times when you are calling a major customer, you may visit him or her as a team from your company. At such meetings it is important that everyone in your team knows what exactly his or her role is and what he or she is going to say during negotiations. 2) Discussion or Arguing The second step in the process of negotiation is the discussion or arguing.When the parties involved in negotiation first meet each other, they are aware of the conflict of issues between them. In the instance where the parties have not met each other before this they are most wary of each other. Thus, during the opening phase of the negotiation the atmosphere tends to be very tense. The discussion step is a major opportunity as you can gain all kind of information regarding the other partys behaviour, intentions and objectives. To gather more and more useful information about your opponent, however you must avoid the habit of interrupting your opponent. As is normally seen when emotions are charged up, most of us make certain threats, not necessarily intending to carry them out. The most natural reaction to a threat from either side is a counter threat from the other party. In such a situation during a negotiation both the parties may end up with mutual exchange of sanctions. Thus it becomes very critical, that as a party involved in negotiation you depict constructive behaviour. But the problem is, how to show constructive behaviour? The most important thing, here, is to listen more than you talk. Your positive listening must be supported and followed by positive talking behaviour. The technique for doing this is to ask open questions which will encourage your opponent to explain and elaborate his or her views and ideas. When the discussions are in progress, one of the factors that will determine the outcome is how well you can send signals. Both the parties involved need to move from their ideal state to mutually acceptable state. The parties involved in the negotiations use sanctions and incentives to ensure movement towards their ideal state. 3) Signaling Behaviour When you are involved in negotiations, the way to handle concessions with confidence is to develop skills in signaling behaviour. A good negotiator always tests how strong is his or her opponents apparent stonewall position. This is the same situation which any salesperson recognizes when he or she is facing objections from the customers. The first thing that a good saleperson does in such a situation is to test whether the objection is real or false. So he or she will ask the customer, If I was able to overcome this problem, would you be prepared to buy? For a real objection the customers answer to above question is yes. With the help of signals the parties involved in negotiations indicate their willingness to negotiate. i) What is a Signal? The dictionary defines signal as a message. For any message to convey the meaning it has to be interpreted correctly by the receiver. Signals are qualifications placed on a statement of a position. Thus, instead of saying I will never agree to your demands you may say In the present form your demands are unacceptable to me. A signal is expected to lead to movement. ii) How to Signal?

For signals to convey message effectively, it is essential that the parties involved in the negotiations are listening to each other. What normally happens is that as both the parties are 69

focusing on their issues, many a times they will miss the signals and prolong the argument. If you are not listening to what your opponent is saying and how he or she is saying it, you will inevitably miss the signals. However, there are many situations during negotiation when you may want to consciously miss a signal. Consciously missing a signal requires a different skill. During a deadlock, if you are willing to negotiate a solution, you can try to break the argument by signaling or responding positively to signals sent by your opponent. Remember, the method to signal is by adding qualifications to your statements. For example, It is not a normal practice over here to give credit, everything you are suggesting cannot be accepted, etc. iii) What to do when your opponent ignores the signal ? If there is no response to your signals from your opponent, you must analyse first, whether he or she has missed the signal or is he or she intentionally ignoring the signal. If your opponent has missed the signal you can either repeat it verbatim or in a modified form. Everything you are suggesting cannot be accepted in its current form can be repeated as you cannot expect us to accept everything you are suggesting in its current form. After having tried a signal, repeat it in different forms, and on receiving a response to any one of the signals from your opponent, you must decide whether you want to move out of discussion or more importantly whether negotiations are possible in current circumstances. 4) Proposing Discussions, opinions and prejudices cannot be negotiated, only proposals can. When an argument is prolonged, the way out is by a signal which leads to a proposal. In the context of negotiation a proposal is an offer which establishes a realistic opening position. When you are presenting an initial proposal, you would most likely state your ideal position, and your language will effect the firmness of your position, I had expected much better service. When you present a secondary proposal, you are trying to initiate a move forward to common ground. Thus, the language used for secondary proposals in most cases is tentative I may look into the possibility of considering this. i) How to Present a Proposal? The best way to present a proposal is to keep it separate from reasoning and justification. The reasoning must be reserved for only those cases where it is absolutely necessary. The party that puts the proposal first usually gains a upper position in the negotiation as after having put the proposal, it can always seek a response, Is my proposal acceptable? ii) How to Receive a Proposal? To effectively receive a proposal, you must curb two common behaviour patterns: interrupting and instant rejection. When you interrupt a proposal you are likely to miss something which was yet to be proposed, as very often experienced negotiators will tag a concession at the end of a proposal. The other important behaviour to control is its instant rejection. Even when the opponents proposal is absolutely unacceptable to you, treat the proposal with some respect. Listen carefully to the complete proposal and then ask questions to clarify the points that may not be clear to you. If you are well prepared then reply to the proposal and in case you need some time to finalise, ask for an adjournment. The main purpose of an adjournment is to

review and assess progress against the set objectives. The actual number and frequency of adjournments depends upon the practice of negotiators involved. The most useful skill in handling proposals and counter-proposals is the summarising skill. Regular summarising of issues keeps both the parties concentrated to issues. 70

5) Packaging the Offer Offer moves the negotiations into the bargaining arena. But before the bargaining begins, one should package the offer, suitably. What is an offer? In the context of negotiations, an offer is considered an activity in response to the opening moves of the negotiation. When you present an offer, you present the variables in a form which more clearly match the other partys interests and inhibitions. For example, a sales executive of a hotel to the travel agent I will give 10% extra discount on the special rate. Before presenting the offer you must think carefully and creatively about all the possible variables. 6) Bargaining Bargaining is about exchange you give up something and gain something. This is the most intense phase of negotiation. The single most important rule of bargaining is to make all propositions and concessions, conditional. Thus, while bargaining you give away nothing, absolutely nothing for free. You always use the big IF. If you agree to X, I will agree to Y. Another point to keep in mind is to put your bargaining proposals as statements and not as questions If you inform the discount, and promise to deliver in seven days, then I will process the order. While during the proposal step you make tentative offers. I will consider, I will look into etc., in the bargaining step you firm up your proposals and become more positive If you do X', I will do Y. Very often in negotiation, a party will present a list of demands, objections, requirements, etc., followed by the logical suggestion that each item is dealt with one at a time. If other party presents such an idea, dont agree to such a demand. Always try to ensure that you keep all the issues in dispute linked. If you agree to negotiate item by item the other party has good chances of squeezing you. However, this depends on the situation. 7) Closing and Agreeing The purpose of closing is to lead both the parties to a final agreement. Thus, closing must be credible. Your closing package must meet enough of your opponents needs to be acceptable. Two common types of closes used during negotiations are concession close and summary close. i) Concession Close: When you use a concession close, you terminate the bargaining step by offering a concession to secure agreement. For example, a sales executive to the travel agency executive looking after the conference delegation, We will provide rooms on room plus breakfast basis, at the rates you asked for. And we will also provide the morning tea and snacks during the conference, daily, free of cost but only for this delegation. ii) Summary Close : Summary close terminates the bargaining step by summarising everything that has been agreed upto then, highlighting the concessions that the customers have secured from your side, and emphasising the benefits of agreeing to what is on the table. For example, Sales executive to the travel agency executive looking after the conference delegation, The rates are the best you can get. As you know, we are providing rooms at the rate you asked for and that too on room plus breakfast basis. Plus we will also provide morning tea and snacks during the conference, free of cost. Plus, we are also providing space, table, phone lines

and other facilities along with tea and lunch for your team of two people stationed in our 71

hotel for handling this delegation. And we will see that check-in and checkout takes the least possible time of your delegation. Agreeing is the last step towards which both the parties have been working. The purpose of closing is to secure agreement to what is on offer. It is of utmost importance that both or all the parties involved rate absolutely clear on what they have agreed to before they leave the table. 8) Deadlock We have seen all the steps of the negotiation process. During any of the steps, negotiations could enter deadlock. A deadlock stops the negotiation process. Deadlock has a price. Its most obvious price is the fact that the time spent in trying to negotiate a deal becomes a dead loss to the organisation, if the deadlock is irresolvable. Deadlocks occur in many negotiations despite the best efforts of the negotiators. Some deadlocks are temporary, others can be permanent. The way to handle a deadlock is to keep your emotions, prejudices out of the issue and work towards finding some common objectives. Your basic intention should be to get negotiation process moving again, so as to enable a solution, acceptable to both parties.

4.10 NEGOTIATION STRATEGIES

During the negotiation process, as the discussion moves on, you react to the other partys comments in various ways. However, three natural reactions that are commonly observed in most people are: 1) Strike Back : In this strategy you respond to your customer in the same tone and language as he or she is doing to you. Occasionally striking back will show your prospective that you can also play the same game and will make him or her stop. But more often this strategy will land you in a futile and costly confrontation. 2) Give In : Many times your customer may succeed in making you feel so uncomfortable with the negotiations that you give in just to be done with it. Giving in results in an unsatisfactory outcome specially for you. Giving in also gives you a reputation for weakness that your opponent and others may try to exploit in the future. 3) Break Off : At times, the negotiation process can come to such a stage, that avoidance is a perfectly appropriate strategy. Sometimes it is better to end a business relationship if continuing means being taken advantage of or getting into fights again and again. But the costs of a break off are high. Breaking off is frequently a hasty reaction that you come to regret later. The negotiation requires you to be a very good communicator. As stated earlier the objective of negotiating should be a win-win solution for both the parties. This requires that you show empathy with the other person. If we consider empathy and overall projection (i.e., how you come across to other by your tone, language etc.) we can have four kinds of communications:
High Projection 1. High Pressure 4. Ideal/Assertive Low Empathy High Empathy 2. Little Interest 3. Weak Low Projection

Figure-7

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Type 1 High Pressure Communicator: He or she is the kind of person who is over aggressive and insensitive to other persons feelings. He or she feel, that by sheer pressure, he or she can win over the argument. Infact, mostly what happens is that as he or she has very low empathy, it becomes selfdefeating and switches off the other persons who are taking part in negotiation. Type 2 Little Interest Communicator: He or she is the kind of person, who has little interest in the other person, and surprisingly in his or her own ideas. His or her general attitude in the process is take it or leave it. It often appears that mentally he or she has no interest in the process of negotiation. Thus, a lack of commitment to the whole process tends to just run the process. Type 3 Weak Communicator: He or she is the kind of person who is over sensitive to the other persons needs and comes over as essentially nice. He or she can take the side of the other person so much, that on occasion that there is no persuasion and thus, no commitment is achieved. Type 4 The Ideal/Assertive Communicator: He or she is the kind of person who has an understanding of the other persons ideas but is also firm about his or her ideas. He or she produces agreement and commitment to the satisfaction of both the sides.

4.11 PRINCIPLES OF SALES NEGOTIATIONS

Lastly, let us summarise the principles of sales negotiation: 1) Negotiation is about bargaining to reach a mutually agreeable outcome. Thus, your endeavour should be a win-win outcome for both the parties. 2) Never neglect your preparation and you must have a clear plan. It is also advisable that you select the right starting point. 3) All the participants of the negotiation must regard each other as equals, as mutual respect is essential to both, the conduct and outcome of the negotiation. 4) Always keep in mind that negotiation is not a debate but a discussion. Therefore, each person must fight his or her corner without trying to over dominate or show one-upmanship. 5) Patience is a key characteristic of a good negotiator. Thus, take your time and do not rush into decision making. Delay is much better than a poor outcome. 6) Empathy is another vital characteristic, therefore, see things from others point of view objectively. 7) State clearly your objectives and take a feedback as to whether the other person has clearly understood your objective or not. 8) Avoid confrontation and avoid getting into a corner you cannot get out of. When you have to disagree, do it carefully. When you have to make concessions, make them one at a time unwillingly. 9) Aim high, and settle as high as possible. Know when to drop the whole thing rather than agree to a totally inappropriate deal. 10) Maintain your stamina. 11) Never underestimate people. 12) End positively. Neither party will get exactly what they want, but the deal should be agreeable.

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5 Ways To Negotiate More Effectively

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"What's your best price?" "That's too expensive." "Your competitor is selling the same thing for." Most salespeople and business owners hear statements like this every day. That means it is important to learn how to negotiate more effectively. Here are five strategies that will help you improve your negotiation skills and drive more dollars to your bottom line: 1) Learn to flinch. The flinch is one of the oldest negotiation tactics but one of the least used. A flinch is a visible reaction to an offer or price. The objective of this negotiation tactic is to make the other people feel uncomfortable about the offer they presented. Here is an example of how it works. A supplier quotes a price for a specific service. Flinching means you respond by exclaiming, "You want how much?!?!" You must appear shocked and surprised that they could be bold enough to request that figure. Unless the other person is a well seasoned negotiator, they will respond in one of two ways; a) they will become very uncomfortable and begin to try to rationalize their price, b) they will offer an immediate concession. 2) Recognize that people often ask for more than they expect to get. This means you need to resist the temptation to automatically reduce your price or offer a discount. I once asked for a hefty discount on a pair of shoes hoping to get half of what I asked for. I was pleasantly surprised when the shop owner agreed to my request. 3) The person with the most information usually does better. You need to learn as much about the other person's situation. This is a particularly important negotiation tactic for sales people. Ask your prospect more questions about their purchase. Learn what is important to them as well as their needs and wants. Develop the habit of asking questions such as;

"What prompted you to consider a purchase of this nature?" "Who else have you been speaking to?" "What was your experience with?" "What time frames are you working with?" "What is most important to you about this?"

It is also important to learn as much about your competitors as possible. This will help you defeat possible price objections and prevent someone from using your competitor as leverage.

4) Practice at every opportunity. Most people hesitate to negotiate because they lack the confidence. Develop this confidence by negotiating more frequently. Ask for discounts from your suppliers. As a consumer, develop the habit of asking for a price break when you buy from a retail store. Here are a few questions or statements you can use to practice your negotiation skills:

"You'll have to do better than that." "What kind of discount are you offering today?" "That's too expensive." Wait for their response afterwards. Learn to flinch.

Be pleasant and persistent but not demanding. Condition yourself to negotiate at every opportunity will help you become more comfortable, confident and successful. 5) Maintain your walk away power. It is better to walk away from a sale rather than make too large a concession or give a deep discount your product or service. After attending my workshops, salespeople often tell that this negotiation strategy gives them the most leverage when dealing with customers. However, it is particularly challenging to do when you are in the midst of a sales slump or slow sales period. But, remember that there will always be someone to sell to. Negotiating is a way of life in some cultures. And most people negotiate in some way almost every day. Apply these negotiation strategies and you will notice a difference in your negotiation skills almost immediately.