1. Negotiation Dr Earl Stevens, October 2009 6. Sales Training - Negotiation #1 10/08/11 1

2. Are you Selling or Negotiating Selling is establishing a need, then matching the benefits of your offering to that need. Negotiating is the actual process of bargaining to meet an mutually acceptable agreement. Both are important parts of developing a sales and closing it. Negotiation is about broader issues than price, like your overall business relationship. If a negotiation to gets down to price alone, you’re not negotiating, you’re haggling. 10/08/11 2

3. Strategy of being a reluctant buyer or reluctant seller Keep in mind you are never actually being forced to sell or buy something. While you may want something, perhaps even very badly, or may have a good reason to sell something, no one is forcing you. As a good negotiator always have the attitude that you'll live very well even if you don't close the particular deal. People will react to your demeanour in any negotiation. Whether you are buying or selling something, always act as if you are doing so reluctantly. When a buyer offers a price say, "Look, I'm really not sure about selling this even at full price. It has a personal meaning to me and its really very valuable to me. However, it was nice of you to bring an offer to me. In all fairness, just so you won't have wasted your time, what's the very best price that you feel you could give me?" If you are the buyer: "Your asking price is way beyond what I'd even consider paying. I'm afraid it's out of the question. (Start to leave). In all fairness, I can understand you want as much as possible, look, just so you won't have wasted all your time, what's lowest possible price you would take, for cash?" 10/08/11 3

4. The Three “Nevers” Never disclose that you "can't live without" the object of negotiation. As soon as you let someone know how much you have to have what they are selling, they firm their position and wait for you to break. You've just stated you have to have it. Why should anyone further negotiate with you at that point? Never disclose that you have any time pressure The minute you let someone know you are under pressure to make a decision, they will suddenly become very firm about giving up nothing. They will simply sit back and wait for you to run out of time. Watch deadlines, always probe for your opponents potential time pressures. Never disclose any unsatisfactory "other sources" you've explored. What you are really doing is telling your opponent how badly you need him/her. Your ability to negotiate seriously from this point on is damaged. You start to look and sound needy. You've lost your "walk-away" power and your opponent knows it. 10/08/11 4

5. How to negotiate so it doesn't go on endlessly Amateur negotiators will start out with small concessions and escalate to larger ones. This always makes an opponent feel that as the concessions get bigger and bigger, there's more. If the last concession you made was the biggest yet, just how big might be the next one. It gets to the point they are afraid to stop, so they go on continuously. Even when they end they always will feel there was more they could have had they didn't get. They don't leave feeling good about the negotiation. Professional negotiators reverse that. They give their biggest concession first. As the negotiations continue, the concessions you get from them get smaller and smaller. The seem to resist a little more each time you go for something else. The opponent feels they are getting close to the end even before they do. When it's over the opponent feels they've gotten you down to the bottom line, there was little if anything to be gained from further negotiations with you. 10/08/11 5

6. "What's negotiable?" There will be times when buyers demand more than you can give. A time when sellers can't cut any further. Make a list of price trade-offs. The secret of good sales negotiation strategies is to have decided, in advance what you can ask for in return for a price cut. Remember that buyers, like everyone else tend not to value anything they can get easily. In fact if you are too quick to cut prices, no matter how low you go the buyer will always have a feeling he/she didn't really get your best deal. Every time you see them, they'll go for a price cut immediately. On the other hand, if the buyer has to work for a price cut, giving up something in return, he/she will feel they have done their job well and additionally feel like a winner. When they know they are going to have to give something up to get a better deal they will tend to make less demands for lower pricing on future sales calls. 10/08/11 6

7. 9 Rules for Negotiating a Complex Deal The biggest B2B sales opportunities are often quite complex, involving strategic relationships and ongoing business arrangements. Closing these deals often involves some fairly complicated “give and take” negotiating. Unfortunately, many sales pros are more accustomed to simple transactions, where price is the only parameter. 10/08/11 7

8. 9 Rules for Negotiating a Complex Deal Rule #1: Prepare thoroughly. Collect and evaluate information on leverage, values, sale prices, competition and other factors that will have an effect upon the negotiation. Rule #2: Develop realistic expectations. Temper your aspirations with “feasibility” based upon what your counterpart has in mind, and reassess your expectations as the negotiating progresses. Rule #3: Know your pricing parameters. When it comes to price, before bidding, know the deal you want and are able justify as being realistic. Rule #4: Decide whether to “go first” or not. If you put your own number on the table, you put your counterpart into your ballpark. But, beware, you might accidentally low-ball. 10/08/11 8

9. 9 Rules for Negotiating a Complex Deal Rule #5: Give yourself room to manoeuvre. Leave yourself some bargaining room, but make sure that you have a plausible rationale for the positions that you take. Rule #6: Manage the concession process. Let your counterpart know that every concession is meaningful and don’t let your counterpart think that holding out will reap big rewards. Rule #7: Create and sustain credibility. Buttress any positions that you take with appropriate rationales. Be specific about your facts, and stay detached from the emotion of the negotiations. Rule #8: Negotiate until the contract is signed. Don’t relax once there’s a meeting of the minds because negotiating a written contract is an important final step. Rule #9: Know when it’s time to close. If the negotiation is going well and you’ve got most of what you want, don’t keep negotiating. 10/08/11 9

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