The Process of Negotiation

By Cindy Waxer

According to a study called, “Negotiation: Organizational Alignment of Strategy and Execution Process,” conducted by the consulting firm Think! Inc., 82% of all organizations polled have no written negotiation strategy. Instead, most sales forces view negotiation as a series of tactical and reactive maneuvers rather than a process-oriented and proactive discipline. It’s a dangerous misconception given the tremendous impact negotiation can have on an organization’s bottom line.

As competition becomes fiercer an increasing number of sales professionals are reacting to buyers’ tactics by lowering their prices and throwing in free goods in order to entice sales and close deals. The truth is, however, sales professionals simply can’t afford to negotiate discounts in response to buyer demands and irrational competitor decisions. Without a formal negotiation process, sales forces risk sending inconsistent messages to their customers and competition – and negatively affecting their bottom line.

By adopting a negotiation process, sales professionals can avoid falling victim to a buyer’s whims and instead negotiate from a position of strength and experience, according to Think! Inc.

The first step is for sales professionals to analyze the consequences if a deal falls through and the two sides walk away. This analysis shows which side has more power in the negotiation – and more to lose. If done correctly, buyer tactics based on posturing, bluffing and low-balling become useless.

In addition to analyzing the potential outcomes of a failed negotiation, the negotiation process also should address how the ideal deal might look by analyzing what both sides want in the deal and what both sides want kept out of the deal. By assessing ultimate needs, the sales force is able to create a list of top priorities and to trade less valuable items for more valuable items.

So, too, is it important for the sales force to build a database comprised of the customers’ most common demands and objections during the negotiation process.

Brian J. Dietmeyer, managing director at Think! Inc., says, “Salespeople often are rocked back on their heels when buyers ask for the same things that they’ve been asking for hundreds of thousands of times over the past five years. Salespeople need to collect and study this data and prepare themselves by developing tactical responses to customer requests.”

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