Formal Negotiating

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Formal Negotiating
CHAPTER 13
Some questions answered in this chapter are

• What is negotiation selling? How does it differ
  from nonnegotiation selling?
• What items can be negotiated in selling?
• What type of planning needs to occur prior to a
  negotiation meeting? How should a seller set
  objectives?
• How can the negotiation session be effectively
  opened? What role does friendly conversation
  play?
• Which negotiation strategies and tactics do
  buyers use? How should negotiators respond?
• What are the salespersons guidelines for
  offering and requesting concessions?

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The Nature of Negotiation

• Negotiation versus nonnegotiation selling
• What can be negotiated?
• Are you a good negotiator?

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Items That Are Often Negotiated Between Buyers
and Sellers
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Planning For the Negotiation Session

• Location
• Neutral site
• Middle of the work week
• Mornings
• Time allotment depends on
• Negotiation objectives
• Desire of a win-win session from both parties

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Negotiation Objectives

• Power
• Concessions
• Target position
• Minimum position
• Opening position
• Should reflect higher expectations than the
  target position
• Must be able to support with solid information
• Identify and prioritize issues that could arise

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Comparing Buyer and Seller Positions
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Negotiation Objectives (continued)

• Anticipate and evaluate positions
• Create a plan to achieve objectives
• Develop alternative paths
• Brainstorming sessions
• Consider cultural differences

Brainstorming session Meeting in which people are
allowed to creatively explore various methods of
achieving goals.
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Using a Team to Negotiate

• Pros
• More creative than one individual
• Help one another reduce the chances of making a
  mistake
• Cons
• More participants more time
• Different opinions
• Rogue members

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Team Selection and Management

• Seller team size buyer team size
• Less is more
• Defined roles
• Team leader
• Rules and signals
• Practice

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Individual Behavior Patterns Conflict-Handling
Behavior Modes
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Individual Behavior Patterns (continued)

• One person can exhibit different modes in
  different situations

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Information Control

• Buying teams also prepare
• Buyers gather information to gain position
• Selling team leaders need to emphasize the need
  for security
• Many team members do not need all the facts
• It pays to control the flow of information

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The Negotiation Meeting

• Preliminaries
• Break the ice
• Ensure a comfortable environment
• Establish a win-win environment
• Prepare an agenda
• General guidelines
• Listen carefully
• Keep track of issues discussed or resolved
• Consider cultural differences
• Remember people need to save face

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The Negotiation Meeting

• Dealing with win-lose negotiators
• Good guy-bad guy routine
• Lowballing
• Emotional outbursts
• Budget limitation tactic
• Browbeating

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What to Do When the Buyer Turns to Win-Lose
Strategies

• Detach yourself
• Acknowledge their position and then respond
• Build them a bridge
• Warn, but dont threaten

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Making Concessions

• Never make concessions until you know all of the
  buyers demands and opening position.
• Never make a concession unless you get one in
  return.
• Concessions should gradually decrease in size.
• Dont be afraid to say no.
• All concessions are tentative until the final
  agreement is reached and signed.

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Making Concessions (continued)

• Be confident and secure in your position and
  dont give concessions carelessly.
• Dont accept the buyers first attempt at a
  concession.
• Help the buyer to see the value of any
  concessions you agree to.
• Start the negotiation without preconceived
  notions.
• If you realize you have made a mistake, tell the
  buyer and begin negotiating that issue again.

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Making Concessions (continued)

• Dont automatically agree to a lets just split
  the difference offer.
• Remain noncommittal when customer asks for a
  bottom line price.
• Know when to stop.
• Use silence effectively.
• Plan the session well.

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Recap of a Successful Negotiation Meeting

• Be sure to get any negotiated agreements in
  writing
• Do post-negotiation evaluation and learn from
  your mistakes
• More cooperation exists if both sides expect
  future interactions
• Your goal is to develop a long-term partnership
  with your buyer
• Dont be greedy or pushy

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Summary

• Almost anything can be negotiated.
• A successful salesperson is not necessarily a
  good negotiator.
• Careful planning counts.
• Preliminaries are important in sales negotiation
  sessions.
• Concessions will occur in every negotiation.

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