Archive for the ‘Negotiation’ Category

From the Buyer’s Perspective: Getting the “Best Deal”

January 20, 2012 by Scott Olsen

Have you ever thought you had a agreement, then ran into a negotiating buzz saw? You probably ran into a strategic purchasing professional or someone they trained. In this economy, more and more organizations are engaging strategic purchasing professionals to:

  1. help evaluate and recommend the best products and services to satisfy their needs
  2. ensure their clients pay as little as possible on each purchase
  3. minimize short and long term risks

Just like the sales person has incentives to hit revenue targets, strategic purchasing professionals are likely to have MBOs for cost savings with bonuses tied to them. How do they create these huge cost savings? Initially, by doing extensive research, cost benefit analysis and networking to determine which vendors they should talk with in the first place. Second, by being the best negotiator in the room. When negotiating, they leverage power where ever possible. Here are a few examples of the types of power they leverage:

  • Creativity
  • Vested Interest (the ability to get you to invest in them and their company)
  • Legal
  • Relationship
  • Endurance
  • Expertise

In addition to leveraging power, strategic purchasing professionals may use tactics to test their counterpart’s (the sales person’s) negotiation skills. Negotiation tactics are defined as games or tricks used to expose weaknesses within the sales person and his/her organization. For example, some of the most common tactics include:

  • competition
  • violins
  • intimidating language or tone of voice
  • foggy memory
  • ultimatum
  • inside information

Strategic purchasing professionals always do their homework. As a business to business salesperson you may walk away from the agreement with your commission and then you’re off to the next opportunity. The strategic purchasing professional has to live with your product for years. They never want to make a mistake.

My advise to business to business sales professionals. Take the time to become a skilled negotiator and prepare for each negotiation. The idea that anyone is a “natural negotiator” is a contradiction in terms. The skilled and prepared negotiator gets the best deals on average. Recently, a sales managers told me “I have a really good sales person, unfortunately he’s a poor negotiator. As a result of the discounts his customers get away with, he has to close twice as many deals as his colleagues.”

I recently interviewed a group of strategic purchasing professionals to get their opinion on two topics: what would they list as fatal flaws for a sales person and what’s a compelling approach a sales person can make to be more effective?

Fatal flaws included:

  1. arrogance
  2. poor presentations/demonstrations that aren’t tailored to the audience
  3. poor follow up
  4. trying to go around the strategic purchasing professional

What approach works with strategic purchasing professions? They need to believe, at the very least, they are paying no more than anyone else for your product or service. By letting the purchaser know that you need to be and are fair to the market you are serving by keeping pricing consistent for like products and service offerings you’re likely to have a smoother and productive negotiation.

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Categories: Differentiating You, Major Account Selling, Negotiation, Sales Management, Sales Skills, Tactical Selling Skills, Uncategorized

Why negotiate?

March 21, 2011 by Anthony Nicoli

When this question comes up, most people will answer along the lines of the following:
To get want I want.
To win.
To protect myself.

All these are legitimate reasons to negotiate. However, negotiating can be much more. In fact, it can be an opportunity for self development and an opportunity to get to know another person or organization far better. 

Negotiating can empower you to live an authentic life in mature relationship to others. Negotiation is a means to assist you to make manifest your uniqueness, your potential.

Negotiating is a lot like dancing: graceful and beautiful when skilled, painful to do and watch when unskilled.

In skilled negotiation, we respect others but do not blindly submit to the them. We respect ourselves and our positions as well.

It can be a process for uncovering and reconciling differences between ourselves and our counterparts.
It can be a mature interplay between the parties where the whole situation can result in outcomes larger than the sum of the parts. Unfortunately, all too often it devolves into an adversarial exchange of win-lose tactics, never achieving the potential of the situation. Both parties usually leave with less than they could have achieved otherwise.

To realize the potential of a negotiation, you need to be a skilled participant. You need to be prepared to engage in all three types of negotiating: win-win, balanced and win-lose. You need to be able to recognize win-lose tactics and counter them. Most importantly, you need to understand what you want, your role and how you feel when you begin the negotiation and as it proceeds.

We invite you to embark on a journey to understand both the process of negotiating and yourself better.

Welcome!

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Categories: Negotiation, negotiation skills

The Oldest Negotiation Tactic in the Book

January 22, 2010 by Scott Olsen

My client met with a prospect who was interested in consulting services to help streamline product development cycles. During the visit, the President said, “we could really use your help, but we don’t have a budget for this, give us your best pricing and we’ll see what we can do.” Not having budget and not having resources to pay for services are two different things. Listen closely to your prospects and customers, but don’t let negotiation tactics get you down. When it’s time to present your proposal, make sure you share with your prospect you listened and understood his/her concerns about expenses. Point out specifically how you’ve taken his/her comments into consideration into your proposal to make sure you can meet the confirmed needs and budget requirements.

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Categories: Negotiation, Prospecting, Sales Skills, Sales Stories, Trust and Credibility

Negotiating for What You Want

July 1, 2009 by Scott Olsen

What you don’t negotiate can cost you.
You’ll never know what you can get unless you negotiate for it. The following story is a reminder to me that “negotiation” is a skill that has to be learned, developed, and thoughtfully put into action to work.

Do you ever wonder how much you are paying for your airline seat compared to what the person paid for the seat next to yours? How about what the person at your athletic club is paying to use the same equipment as you each month? And finally, how about the office space next to your office? Well, one of my career development clients just learned the hard way. She was paying $1300/month for a one person interior space with no windows. She was told that the one person office across the hall with the beautiful windows with the forest view was $1800/month. When she asked if their was any room to negotiate, the response was “no.”  A few months go by and she starts to talk with person who ended up leasing the window space across the hall and learned that he was paying $1300/month. After she got over her frustration that she was paying the same as him without the window…, she asked how he got that rate? He replied he asked the management firm to match another (less desirable) space across town or he would walk. He used the “competition” tactic like a pro and it worked!

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Categories: Negotiation, Sales Stories, Tactical Selling Skills

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