At my networking breakfast meeting a couple of days ago the discussion topic was negotiation, which made an interesting discussion with the group member’s view, on this subject.
To start with, what are the basics of negotiation – It is the coming together of two minds towards an agreement. The dictionary defines it as: ‘Reaching an agreement through discussion’.
Here are 6 practical tips to consider when you get to negotiating phase of an order.
1. There is really one principal tip and that is to be prepared and do your homework, with the remaining on this list a sub-set.
2. Quality not price
We all sell on quality – don’t we!
This should be your main stance when discussing an order, and that is what it is, a discussion.
Any purchaser is seeking value for the product they are purchasing and yes, the purchase cost is a factor but concentrate on the overall ownership of your product. As an example is it easier to install, use daily, quicker, lower maintenance etc.
It is a fact, that the purchase price of a product is only a small percentage of the cost of ownership.
3. Listen & understand
If you have not done so already, and you should have done – listen and understand their needs.
As I have mentioned previous blogs people buy on needs with the benefits your product gives an additional factor. The example above are benefits but they must be relevant to your customers needs.
4. Have knowledge of your competition.
Most of the time you will be in a competitive situation. Buyers love this position as it puts them (they think) in the driving seat. Know your competition capability as well as you know your own. This will enable you to parry any statements made by the purchaser, but must stress do not rubbish your competitor. That is the worst thing you can do.
5. Have a bottom price.
I know that the objective is to meet the customers needs, but some practicality must be considered especially if you are negotiating with a buyer. They will have the task of proving to their management that they are getting best value. An old trick is to use what I term ‘union rules’ and add a small percentage to your original quoted price that you are able to offer as a discount. This is only to be used at the end of the negotiation, if needed, and then offered ‘reluctantly’.
It does work and the buyer is happy as they can prove some reduction.
6. Know when to say no.
This is one of the most difficult phrase for a lot of sales people, whose objective is to get the order and sometimes at any price.
If your product cannot meet their needs say so. You may loose that order but you will gain respect and be remembered for future requirements.
On the money side we are all in business to make a profit. That is a fact of life, when you get to your base price tell the purchaser you cannot go any further.
We all learn from experience, so keep in mind what works in your market and what doesn’t.
This list is aimed at the areas to consider for negotiation so when you go into that meeting you are well armed.
Through experience I am sure we all have various tips.
So let’s hear about them with your comments.
(With apologies to ladies & the play of the same name)
One article in today’s news, that caught my eye, is that ICANN (the Internet Corporation of Assigned Name & Numbers), are going to allow the use of any word as a suffix in the internet name. On the surface this seems a good idea until you read further that you will be able to use any language which could prove interesting with some translations!
Before you start looking for the application form, which will be 360 pages long there is the matter of the fee, $185,000!!!!
Too rich for me and probably a majority of businesses & users, but it got me thinking.
There is a faction who now consider, the role of the sales guy is dead, and all future business will be undertaken on-line. That may happen sometime into the ‘Star Trek’ era, but today we still want to do business with a person. It may be on the telephone or by e-mail but people buy from people.
There are many people, who think the online sales is the panacea to their sales, and forget it only one of the tools in the sales operation.
The sales function, whatever area it is B2B or B2C, continues to be conducted, in the main, on a personal basis.
From the sales side, when you are in personal contact with the purchaser you are the position to understand your customer’s needs, and solve their problem, and that, is the basis of the sales function, not to sell our product or service but to fulfil the customers need; to solve their problem.
If you take that concept on board you will be in a better position to improve your selling techniques and increase your order book and turnover. In addition you are more likely to increase the proportion of repeat business because you solved their problem.
Have a think about it!