Art of Negotiation – Knowing When and What to Negotiate

As a professional sales person how good are you at negotiating? The answer lies in the size of your pay check, so don’t kid your self and say you are great at negotiating if your pay check is consistently small, by small I mean less than $250,000.00 per annum! I personally would not be happy with a pay check of that size, so I would make it my business to learn this skill and hone my negotiating skill into an art form.

Professional sales people must understand this simple truth: Selling and Negotiating are totally separate phases of the selling process, most sales people are poor to average negotiators, and believe that negotiating is all about reducing the price to finally achieve a sale, little wonder then that the customer expects this and tries to squeeze the last ounce out of the sale person that they are dealing with and usually are still not satisfied. Have you as a sales person experienced this?

You definitely would have, as today’s informed and savvy customer is continually bombarded both electronically and by the media and friends to never pay list price for any thing and in fact to ask the sales person these Fatal questions “What is your best price?” or “I have been offered this price from your competitor down the road, can you better it?” You may be asking at this point yeah I have so why have you called it a Fatal Question? Fair question and here is my answer, to a professional sales person this question is fatal, as the customer is taking control of the sales process putting the sales person into a price point corner, either way the sales person stands to lose once they allow themselves to be dragged into this quag mire, if they make the sale their commission is affected dramatically so a lower pay check and if they lose the sale their pay check and their self esteem is damaged. Lose- Lose, so can you now appreciate how important the skill of negotiating is?

Here is another question, has a customer said this to you “Just tell me what the price is?” What is the customer doing? Do you know? If you do, do you know how to neutralize it? Keeping the customer happy and involved?

How often has this happened to you? and how have you handled this situation? Have you gone straight into giving the customer the price and then had the customer say “Thanks I will think about iy and get back to you” Yup it has happened right?

Negotiating is an art that right an ART, something that superb sales persons do extremely well, in fact none of my customers have ever paid less than the price I have asked for! Can you say the same?

Before you enter the negotiating phase you must do so after you have answered these two questions, 1. Do I know the customers needs? 2. Does the customer appreciate what is on the table? If the answer to either of the questions is no, you are not ready to negotiate, slow down, regain control and go again. If the answer is yes, you are ready to start the negotiating phase. Let us just go back a step and see how we would handle a customer that is insistent and wants to know the price, the easiest way that I have found to handle this situation is to go along staying in control for example “Yes, customer, we can discuss price, could I ask a few questions to get the details I need to assist you better?” At this point the customer may still refuse to give you information that you require average sales people succumb at this point and give them the price, (either specific or ballpark) this practice is risky as you have now lost control, getting control back from this position is difficult and you will now get squeezed by your customer, resulting in a smaller pay check for you.

If the customer is insistent, work to get below the surface to the customers specific need with out establishing the need. Why? Knowing the need allows you several ways to meet your objective whereas a Demand is narrow leaving you with few if any choices to satisfy. Selling on price is damaging for your pay check and your companies long term viability, companies need to make a profit to survive, so don’t give it away freely!

Negotiation is a tool that you use to preserve your price and terms. I learn’t this when I went into our local Mercedes Benz dealer ship lately to purchase the new Mercedes SLS Gull wing I asked the sales person for the best price without allowing him the time to get into the sales process, he was a superb sales person and turned my question on price around seamlessly getting me to give him the reason “needs” at no time did he ask me to make an offer and when price was eventually discussed it was when he was ready for the negotiating phase and I was made to feel that the price was minor in comparison to what was on the table. I paid full price that is the art of negotiating by a superb sales person, little wonder he is the highest paid and holds the number one position for Mercedes Benz sales in Australasia.

You can as well once you have mastered the art of negotiating.