The trading rulebook is not written because nothing is standard. It’s also pretty loosely structured, like grammar, with its changing rules and exceptions. So how do we bring some order to the negotiation? These tips will help.
Buyer and seller don’t want the same thing
What does the seller want from the buyer? We could say, the sale, the profit, or in a word, the Money. That is what capitalism is all about. So what does the buyer want from the seller? We could say, the product, the service, or in a word, the Things.
Sellers want money and buyers want things. In addition, the negotiation process establishes standards acceptable to each party in terms of quality, service, delivery, and price. Deciding on these standards is what the negotiation should be about. Since we don’t want the same thing, we need to expand the process beyond price. This fact forms the basis of win-win negotiation.
Negotiation is more like a journey than a destination
The temptation is to view negotiation as an event, a kind of bump in the road to entrepreneurial happiness. This is a mistake. Negotiation is a process that evolves over time. The learning and trust inherent in the process progress over time. Because the customer’s emphasis on quality, delivery, service, and price is bound to change, and because our priorities as sellers change as well, the process is constant.
Focus on importance, not on the sequence of issues.
Write down the issues to be negotiated. Prioritize them, descending from the most important to the least important. Discuss the issues in the order that is most comfortable for the customer. If you draw a magic sequence, your plan may be upset as the customer raises issues from your rehearsed order. If the customer raises issues you’re not prepared for, admit it and ask for more information. Reject the tendency to improvise, as you will tend to lose both the negotiation and the buyer’s respect.
Find areas of agreement quickly
Sales professionals know enough not to ask the final questions before conditioning the buyer into a series of affirmative decisions. We call this principle ‘the theory of many little yeses’ and it reflects human nature. Early agreement on small issues begets greater agreement on larger issues later. Present issues that both parties agree on at the outset and build on this framework of agreement.
Can
Inevitably, sellers believe that buyers have more power in the buying/selling environment. If they have so much power, why are they negotiating with us? Because we have something they want! Power, like bargaining itself, has very little definition. Its multiple manifestations include clothing, titles, money, etc. It is a matter of perception. Do you remember the almighty Wizard of Oz? He lost all power to him when that little dog opened the curtain and altered our perception.
Perception works this way. If you think they have the power, they have it. If you think you have the power, you have it.
Two other facts about power appear in every negotiation. The ultimate power is the ability to say NO and live with the deal. So know your position away. Also, power flows away from those who want the deal the most. If you want it bad, expect it to go bad.
Change your selling style
I would not consider selling every customer the same suit in the same size. So why would you sell in the same style to all customers? This is simply a matter of effective communication. Choose the approach the customer is most comfortable with, not you. The emotional buyer prefers the relationship style, the real buyer prefers the need-satisfying style, and the executive type favors the consultative approach.
The lack of firm rules for trading seems frustrating, but this flexibility is the great beauty of trading. Each player can apply some of his own rules. There is no referee, no public, no scorecard. The object of the game is to reach the next goal with both parties happy.