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Knowing when to negotiate...

"Knowing when to negotiate is as important as how to negotiate."


Here is a quick tip on negotiating:


Example


Client: "Before we get into the details, just give me an idea of what this will cost."



Salesperson: "Our basic fee is ... and depending on volume ... we could ..."


A better response would have been...

Client: "Before we get into the details, just give me an idea of what this
will cost."

Salesperson: "I know that cost is an important consideration. So that I can give you an idea of the cost, can you tell me...?" (Get the client's needs and information.)

Bottom-line: Don't negotiate until you know the customer's needs and the customer knows the value you bring.



- by Linda Richardson
Bottom-line: Don't negotiate until you know the customer's needs and the customer knows the value you bring.
Good point and good example. Thanks. thmbp2;
- by Houston
On the surface this really strikes me as more of a sales issue than one concerning negotiation.

Linda makes a very valid point about an approach to selling and potentially qualifying your prospect, before getting into any discussion (or negotiation?) of price itself.

Furthermore, many people mistakenly equate negotiation to price haggling, which it isn't.

You may even take things one step further, if you realise (please excuse my British spellings) that what Linda's salesperson is attempting to do with this prospect is actually negotiate the way they'd like to pursue and manage their exchange.

Like most things, there are various levels and conscious or unconscious levels of competence/incompetence. - by ThirdForceNegotiator
You know Linda... I have a hard time with this one. I mean I agree and it makes perfect sense. BUT when a customer is closed to hearing about the value and only cares about the price you are only going to frustrate or irritate them by trying to circumvent their question. So what I do is try three times...
- oh is there a budget that you have to work with?
- ok.. let's see do you need single or dual? do you need this accessory with it? how many do you need? and I just ask them questions in a tone that makes it sound like I'm "tallying" up the "cost"
- great... let me send you a quote on this... what is your email? then I ask all my qualifying questions and maybe end off with some of the benefits of my product and then send them the quote

If all else fails... i will bundle a small spiel with the price...

- ok... the instrument comes with a,b,c which means... d,e,f, for you and it goes for approximately $$$...

Sometimes it is about power. Genrally I like to keep control of the call. Once the customer takes control for me it is a bad sign. More often than not I'm pretty good at keeping control of the call and for the few times that it doesn't go my way I just let it slide. Some customers are more open to the process than others and I'm not gonna get upset over the ones who aren't interested in collaborating with me. Because that is how I see it. It's a collaboration. I don't waste my time with people who don't want to work with me. - by Andrea
See.... I learned something today. I would have considered this a deferral of price discussion to a more appropriate time.

I used to think negotiation was a process by which two parties advanced a need and price to acceptable level, by which I would have assumed the above mentioned presumed price deferral would have eventually advanced to.

I would have assumed... that the above deferral of price would have been suggested if for no other reason in that we don't know what we are pricing till we know what we're offering.

Aloha... :cool: - by rattus58
As to Andrea's point of "BUT when a customer is closed to hearing about the value and only cares about the price you are only going to frustrate or irritate them by trying to circumvent their question." I couldn't agree more.

For me, these questions happen all the time when people want to know how much Term Insurance is going to be for a specific amount that they hear on the radio or see on tv. This "fixes" a value in their head which is attached to "good health". This makes it difficult, because most people who have suffered a heart attack or stroke for the first time would have told you that they are in the best of health. So you have to "deal" with it, and that card you deal had better be off the top of the deck.

"John, hypothetically, we could provide you with comparable premium to whatever you may have seen on tv or heard on the radio, but what is more important is what you qualify for both financially and health wise. Have you had a physical including a complete blood and urine screening within the last 3 months?" Then the discussion starts... :)

Much Aloha... :cool: - by rattus58
Negotiation encompasses virtually everything we do where other people are involved and you're not commanding or coercing someone into taking action.

Negotiation:

An explicit voluntary exchange between people who want something from each other - where each party possesses the right of veto or refusal.


Many of us will negotiate everyday in situations involving:-

- the price, terms and particulars of a transaction;
- the remedy for a dispute or complaint;
- the scheduling of an upcoming event;
- where to go and what to do on a family vacation;
- how to divide the household duties;
- the activities (and sometimes behaviours) our children will engage in.

etc etc etc

(the above list is of course endless)

---

Negotiation isn't limited to price haggling; it is actually an important fundamental aspect of our everyday communications, with our clients, with our prospects, with our colleagues, with our families, and with our friends.

Even in the way Linda's fictitious salesperson acts above, and the choice of words employed, betrays a lack of awareness in what is trying to be accomplished, and the most effective manner of going about such - for everyone concerned.

Recognising the other party to the conversation is requesting information that you would rather defer to a later point, or handle in another fashion, means that you may more effectively communicate and 'close' on your preferred course of action by dealing with it as a negotiation.

In this fashion you will not appear to the client to be bulldozing, or frustrating or irritating them (to quote Rattus58) but in actually communicating with them more effectively you can gain their consent and permission to proceed.

This is negotiation, or rather, one very slight application of understanding this fascinating and diverse area of knowledge. - by ThirdForceNegotiator
Hmmmmm....


Definitions of negotiation:
  • noun: the activity or business of negotiating an agreement; coming to terms
  • noun: a discussion intended to produce an agreement
    Example: "The buyout negotiation lasted several days"
Versus....

"Negotiation:

An explicit voluntary exchange between people who want something from each other - where each party possesses the right of veto or refusal."


The sales process by itself, with the above terms attributed, seems is a negotation. In the original statement, ""Knowing when to negotiate is as important as how to negotiate." Knowing when to sell is as important as how to sell. Are we substituting negotiation for selling? It's OK with me, because I consider selling to be the process, and if the term negotiation is also the process, I'm good with it.

It seems here, though, that the "knowing when" is referring to the price. Did I miss something here?

Aloha... shds; ;bg







- by rattus58
Negotiation as used above is not a substitution for selling.

My definition of negotiation comes from my being a professional practitioner in the field.

It is my focus, my specialism, and I have over twenty-five years of experience behind me (relating to negotiation best-practice methodology) that gives me something of an unfair advantage over people who may have only read a 1970s or a 1980s 'populist' book on the subject.

I'll diplomatically leave out my thoughts on quoting dictionary definitions concerning such a complex phenomena.

Nevertheless, I should point out that negotiation as a subject matter has received the attention of some very notable minds; one of them being John Forbes Nash (Jr) - recipient of the Nobel Prize for his work into negotiation in the 1940s and early 1950s. He was the subject of 'A Beautiful Mind' the Oscar winning film with Russell Crowe.

It surprises me (or perhaps it shouldn't) that the populist negotiation authors in this country make no mention of Nash's important work, or other researchers of note for that matter - but then they are the populists. Many of them have an agenda to promote. Most of the recognised experts push their own ideas and exclusive theories, apparently derived from their own unique childhood or adult experiences.

My (professional) opinion is that very few people in this country truly understand what negotiation really is - or rather I should say, what really constitutes negotiation best practice.

Furthermore, to the layman, 'negotiation' may have something of a tarnished image, thanks again to some of the stilted early doctrines (but excellent marketing) of the American populists who have dominated the market.

If you think I'm mistaken holding this view, I would point to this whole negotiation forum as being evidence of my claim.

For a definition that is instructive to this discussion, I would refer you to 'conventional wisdom' where Wikipedia have an excellent write-up on it.

My friend, the world is really flat (as most people perceive it) when it comes to understanding negotiation. To those who hold the more rounded world view on the subject, they find themselves at an even greater advantage because of it!

I hope my attempt at answering 'if you missed something' meets with your approval. - by ThirdForceNegotiator
If a customer asks for a price give it. This is a clear buying signal. Anyone that beats around the bush is going to frustrate the buyer. Be open and honest. If the buyer thinks the price is too high, or suddenly loses interest then ask if the price is the problem. A good buyer will negotiate with you to get a better price. - by Telemarketing
If a customer asks for a price give it. This is a clear buying signal...
I ask you though, does your product suit their needs or are you giving them a price which doesn't suit what they are looking for?

I work with a lot of good sales people who can sell the multiple packages and services one of our client offers, but when a prospect asks what our price is during the rapport or discovery stage it's easy to fall into the trap and given the customer the cheapest price.

This doesn't always suit their needs and from there you are selling up when really it would have been easier to ask more question then make one recommendation.


PROSPECT: Can you tell me how much ______ is?
SALESPERSON: We have many types of packages/services to tailor to your needs. Can I ask....?

At least when you do suggest a price, you'll be able to build value because you've hopefully asked enough questions to understand what the prospect values. - by MrCharisma
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