Much of the advice on how to conduct effective sales negotiations counsels you to use a collaborative sales negotiation style to achieve a "win-win" outcome, but there are situations where you are better off to be competitive in your negotiating style.
Before we get into the question of when to be collaborative or competitive when you negotiate, let’s define the outcomes of the two negotiations.
Collaborative negotiating, or achieving a win-win outcome, in sales negotiations generally means an agreement in which both parties get something of value and they are happy with the outcome.
Competitive negotiating means each party will have gotten something of value, otherwise, they shouldn’t have agreed, but only one party is happy with the outcome while the other one feels foolish.
Identifying customers’ priorities prior to negotiation will help you increase the value of your product or service by aligning benefits with customer needs.
Often in a large sales negotiation, you will have additional stakeholders add other issues (e.g. procurement or a CxO). Prepare by getting prior information on the nature of those issues from your supporter in the company.
As you offer a trade, you always reinforce the value of that trade by relating the benefit to the customer based on his or her priority. You have to be patient and allow the issues to unfold. You will be holding some of your offers back as will the customer. If you have done effective questioning, research, and planning, you can be prepared with what you can trade for the customer’s requests for additional consideration. You will not only be patient but also persistent, using the negotiation process to gather additional information on why the customer wants or desires something from you. This is especially important if additional stakeholders with new demands show up after you think you have gotten all the issues identified and perhaps agreed to.
Paint the Picture
Make it clear and obvious what it will be like in the future when the customer achieves his or her important goal. When negotiating you will relate the value of what you trade to the customer, you will let him or her know the total value of what you trade and how that value will be there for a long period of time.
Identify Multiple Issues
Identify multiple issues to increase your ability to provide a creative solution that will benefit the customer. Issues are either tangible or intangible. Tangible issues are easily identified costs, such as cost of goods. Intangible issues can be a competitive advantage, time to market, or enhanced image. Intangible issues are harder to value, but it offers you the creativity and flexibility to trade something that is of low cost to you (such as consulting hours), but of high value to the customer (improved productivity).
Collaborative negotiating helps build a stronger relationship and increases the probability of future business. You will have an equal partner in supporting the solution, who will be as invested as you are in seeing the solution implemented and effective.
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