Be Prepared to Enhance Your Negotiation Skills
Good planning and preparation of the negotiation process is critical to the success of any B2B sales person. The increasing speed and complexity of negotiations in today’s selling environment means that traditional “off the cuff” approaches to the negotiation process a thing of the past.
Here are six quick tips on how you can improve your negotiation skills through effective planning and preparation.
1. Set your objectives and an agenda
You must have a negotiation strategy in place with set objectives for every aspect of the negotiation. This is a crucial part of planning for negotiations and can either make or break an effective negotiation. By clearly defining your objectives you will be more focused and confident of achieving favourable terms at the end of the meeting.
Your negotiation strategy should also include a detailed agenda for every aspect of the negotiation. This should be a strategic plan that is designed to ensure that you raise each of your key points and objectives during the meeting. Try to designate timescales to each key point and be ready to adapt to the client’s reaction at each stage.
Remember, many negotiations break down and result in lost sales due to poor time management and a failure to resolve outstanding issues. By spending your time on each key point efficiently you can ensure that you get all of your points and objectives across during the negotiation.
2. Pick the right environment
The right environment can have a big impact upon the success of a negotiation. If you have a choice you should ensure that the environment is practical and professional for the specific negotiation. If the negotiations are taking place at your office, ensure that the layout and any necessary equipment are professionally organised.
It may be worthwhile holding the negotiations at a third-party location. This might be more appropriate and can create the right psychological environment for the buyer by providing a sense of neutrality. Remember, the setting can influence the negotiation process by either creating a hostile or a relaxed atmosphere.
Also, make sure that you have the right documents and tools at hand that will help make the negotiation a smoother process. With the right setting and the right tools you will be better equipped to focus on your negotiation skills and achieve a win win situation at the end of the meeting.
3. Prepare an opening speech
Many salespeople will be averse to this concept and see an ‘opening speech’ as unnecessary. After all, the stereotypical salesperson is a great conversationalist and is known for having the ‘gift of the gab’. But, for many, preparing an opening speech will save a lot of embarrassment and will dramatically increase their chances of success.
Preparing an opening speech will prevent you from faltering and hesitating in the critical early stages of the negotiation. A faltering and hesitant dialogue can kill your hopes of negotiating a favourable deal because it provides the buyer with an advantage and confidence. Preparing an opening speech is therefore crucial to your success in negotiations and your ability to close more sales.
Your opening speech should demonstrate a clear understanding of the client’s world. This will enable you to sell your own position in the context of what drives your client later in the negotiation. It should set the stage for agreeing the external and internal pressures which face the client before aligning these pressures with the client’s needs and your own desired outcome later on in the meeting.
4. Be aware of the buyer’s (and your own) authority
It is critical that you are aware of the buyer’s authority before you commence negotiations. If it emerges that the buyer has no authority to make buying decisions then you will have wasted precious time talking to somebody who is in no position to negotiate or sign the contract. If it only emerges that the buyer has no authority during the meeting then you should immediately ask to see somebody who does have the authority, unless there is key information that can still be obtained that will usher the success of later negotiations.
It is also important to be aware of your own authority in advance of the meeting. Knowledge of your own pricing authority is crucial as it will make you clear on just how flexible you can be during the negotiation process. This knowledge will not only prevent you from dissatisfying employers but will provide you with greater confidence and self-assurance of you capabilities throughout negotiations.
5. Be prepared to walk away
Although walking away from negotiations empty handed will either stall the sales process or result in a lost sale, a willingness to exit negotiations is another crucial aspect of your preparation. If you are not prepared to walk away from a negotiation you will be in grave danger of conceding too much.
A willingness to walk away is also critical from a psychological point of view. After all, if you are not prepared to walk away you will be resigning yourself to negotiating a deal that is unfavourable from your own perspective.
As mentioned above, you should be prepared to walk away if your client has no buying authority. You should also be prepared to walk away if the buyer makes unreasonable demands which are beyond your capabilities. After all, effective negotiations are a two-way process that should not be entirely buyer-oriented.
6. Know your prospect
One of the most important parts of preparing for a negotiation is getting to know your prospect inside out. Make sure you are well aware of the client’s world before your step into the negotiation room. Understand their business, their key performance indicators, their external pressures, their internal pains, and their main competitors.
By acquiring a great understanding of your client’s world you will be able to anticipate how your client will respond to your actions. You will be prepared to adapt to changes during the negotiation process and any buyer objections that the client might throw at you.
Most importantly, you will be able to create urgency for your product during the negotiation by aligning the client’s external pressures and internal pains with the features and advantages of your solution. In turn, knowing your prospect well will ensure that your are able to win deals on much more favourable terms. It will transform your negotiation skills and significantly contribute toward your success.
Written by: Steve Eungblut, Managing Director of Sterling Chase
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