The simple Sales rules of Negotiation.

How many Sales people really understand NEGOTIATION? Sadly too few.

Many enter negotiation not realising they are in a critical part of the Sales Process. Negotiation is not always related to Sales situations. We have all had the banter with our kids along the line of: "Can you take me to the pictures?", responding with: "Only if you tidy your bedroom". A primitive, but effective negotiation, one (if carried out) that leads to a 'win - win' outcome!

It is important to recognise when the sales process enters the 'negotiation phase'. Failure to do so may be detrimental to the desired outcome, and do the salesman a disservice.

So, what is negotiation?

I have heard many definitions, but the simple ones are the best:

"The exchange of tradables to facilitate an agreement".

Simple!

And what are tradables? More importantly, how many Salesmen can list them?

Tradables are the areas where a Salesman or Buyer can 'give a little'. The obvious one is cost of goods/service. But there are others. They can include product/service specification, payment terms, delivery & quantity.

Let us look at some examples.

Buyer says "Yes, I like your resistors, if you reduce the price by 10% then I will order."

Inexperienced salesmen, not realising that negotiation phase has been entered are inclined to say "Yes" in great haste to close a deal. However, the salesman who knows his tradables may respond in the following ways:

"Of course, but I need a 12 month order for me to guarantee this price"

or

"We can meet the price, but will have to supply the product without connectors"

Another example:

Buyer - "If you can deliver by month end, I can place an order now".

Again, the inexperienced may jump at the offer, but a measured approach would be "Of course, but we will need to arrange overtime to meet the deadline, therefore there will be a 10% price premium".

Salesmen naturally believe the Buyer has the upper hand, particularly as he may have a choice of suppliers. However, if you have reached negotiation phase, it can be assumed you are winning the competitive race. At this point the Salesman should never underestimate the strength of his proposition.

It is not unknown for a negotiation to break down irretrievably, although with thorough preparation by both sides, it's an unlikely outcome.

The outcome of a negotiation and subsequent business deal fall into 3 categories. The first, a 'win - win' is the most desirable, both sides feel good about the deal, and it is a good foundation for further business between the parties.

A 'win - lose' is where one company is delighted with the deal, and the other is feeling 'stitched up'. Frequently the 'delighted party' is oblivious of the thoughts of the 'aggrieved party'. Unless some remedial work can be done on the relationship, it is highly unlikely that the parties will do business together again.

The final outcome is a "lose - lose" outcome. Both parties feel the deal was poor, this outcome should be avoided at all costs. However, they do happen due to business pressures, expediency and other compelling issues. It is very unlikely that these parties will do business again together.

So how do we ensure 'win - win' outcomes?

Simple - PREPARATION. A salesman MUST know and understand his tradables. A buyer may have different tradables depending on what he is buying. Both parties must accept that transaction value can be talked up as well as down.

Typical tradables for a salesman would be (these can be traded up/down):

Delivery time
Order value
Quantity
Contract duration
Product finish (specification)
Packing/delivery costs
Insurance cover

Delivery frequency
Payment terms

In summary, TOP salesmen recognise their tradables, they can recite them at a moments notice. They recognise the signs of negotiation. Furthermore, they have an empathy to the needs of their customer to ensure outcomes are 'win - win'.

Happy Selling
http//:www.sgba.co.uk

skype : ianthomas240

T: +44 (0)23 9264 0589