Negotiation is one of the key skills for success in life and business. Infact a famous person once said; life does not give you what you want, it gives you what you negotiate! As a sales professional or business owner, negotiation is an important skill to get what you want and close more deals.
My first introduction to negotiation was over a decade ago when I entered a bus going back to my university campus, I called a hawker to buy some batteries and when he told me the price, I paid without asking any questions. He seemed quite happy when I gave him the money. An elderly woman beside me tapped me and said; never pay the actual price you have been offered, negotiate and see if you can get a better price! And that has stuck with me ever since. Of course there are some places where negotiation is not possible, but in most cases, from the market to the boardroom, negotiation is an important skill.
One of my favorite books on selling is written by Joe Owen, and he shares 6 principles of negotiating and they are:
Win-win not win-lose outcomes: he says you should go into a negotiation with an attitude that both parties would win at the end of the negotiation. It is not a competition where there is one winner and one looser, but an agreement where everyone can leave the table with a win.
Interest, not positions: he advises that we approach negotiation from a point of considering each parties interests and not taking a rigid position and sticking to it. For example; your interest might be to get a discount for your company or get your client to agree to a price increase, but a rigid position is to demand a 20% increase. The focus should be on achieving your goal and not maintaining a rigid position.
Value is in the eye of the beholder: in this principle he emphasizes that value is an individual thing, and what you consider valuable and worth a certain price might not be worth that price to the person who is buying. In negotiation, you should see value from the eye of the customer and ensure that your offering provides greater ‘perceived’ value than the price.
Options not a single point solution: he advises that you give your client options and not a single point solution so that you would give them some flexibility to choose and negotiate. So instead of saying buy one for 100 dollars, you can offer them some packaged options like: buy 3 for 250 dollars or 5 for 400 dollars. That way they can decide which option they prefer.
The BATANA Principle: this means best alternative to negotiated agreement. In this principle, he advises that we always have a ‘BATANA’ incase the client is not satisfied or interested in the negotiated agreement. This is so that you don’t leave the negotiating table empty handed. However some clients would push the envelope too far, so you have to know when to draw the line and walk away!
Intelligence and information: you should always go to a negotiation with prior intelligence and armed with useful information to assist the negotiation. Some people would not buy until you provide them useful information, so make sure you put that on the table to ensure that the negotiation goes favorably.
These are some guiding principles that would help you negotiate like a pro. What negotiation principle has helped you achieve success in the past? I would be glad to learn some more.