Guidelines For Effective Negotiation

By | April 24, 2018
  1. Only negotiate when you have to:
  • Distinguish between selling and negotiating
  • Don’t use negotiation as a substitute for effective selling – that’s costly!
  • Don’t use negotiation to resolve ‘risk issues’
  • Negotiate when you can’t outweigh or influence a situation in any other way.
  • Only negotiate when both parties are both able and willing to move – watch levels of authority on both sides.
  • Only negotiate where there are both areas of common interest and conflict present.
  1. Set your own objectives for the meeting. Ensure that they are specific and clear, compatible with your company’s outcomes, achievable in the context of the meeting and it’s attendees and measurable, that there is an evident procedure to enable you to know when you have achieved your objectives.
  2. Do the groundwork.
  • Know the customer – their organisation and everyone involved in the meeting – who they are, what they do and levels of authority.
  • Understand their criteria for doing business.
  • Anticipate their demands.
  • Measure their likely demands against your objectives.
  • Set realistic upper and lower limits.
  • Stay between these limits.
  • Anticipate ‘variables’ issues which can be used as bargaining counters – and be aware of their value:
    • to you
    • to the customer
  • Set the agenda for the meeting
  • Establish the right climate
  • Demonstrate positive body language – being neat and well dressed demonstrates a professional businesslike approach
  1. Focus on the three P’s:

PURPOSE: The reason for meeting should be re-stated

PLAN:       The Agenda – items for discussion

PACE:        Length of time both parties are prepared to allocate

PERSONALITIES: Who is involved

  1. In the meeting
  • Ask questions which:
    • Expose issues
    • Reveal strategic information
    • Help you to maintain control
    • Provide an alternative to conflict
    • Grow the customer’s need to buy from you
    • Provide you with thinking time – and then listen to the answers
    • Never be afraid to take ‘time out’
  • Keep control by taking detailed notes.
  • Identify common ground – maximise it.
  • Identify areas of conflict – minimise it.
  • Identify usable variables – compensate.

Be aware of gambits – do not be driven from your objectives. Differentiate between true objections and the ‘games people play’.  Remain objective, and do not become personally involved.

Bargain between your upper and lower limits, starting (obviously) at your best case.

Bargain in small increments – try to avoid being the first to make a concession

Reduce the value of the increments as the bargaining proceeds.

Use empathy throughout – understand their point of view – not sympathy, which implies agreement. Keep an open mind.

Do not allow misunderstandings to persist, deal with them promptly. If in doubt, ask for clarification.

Establish agreement between all parties.

YOU should summarise the meeting at its conclusion (and indeed at suitable points throughout), then prepare and supply minutes or a letter of confirmation to everyone involved promptly.

ASK FOR COMMITMENT.

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