If you go into a negotiation without preparing, you've already lost. You need to understand the other side’s objectives and know what your counters are. Doing so enables you to stay calm. Being overwhelmed by emotion is your enemy in any negotiation. The minute you get upset, you’ve lost the advantage. Mike Figliuolo emphasizes that everything hinges on doing the proper research. Hear his thoughts on the matter in this episode of Sales Reinvented!
Do your research on your negotiating partner. You want to get to a solution that works for everyone. So you need to know what’s going on in their business. Mike has a major client that’s facing financial challenges and having to let people go. He knows they’ll push back on price.
If someone pushed for a price decrease, what would you say? You should also know when you need to take a break. It’s okay to leave the conversation, think about your response, and come back to it. Keep the emotion out of it.
A great salesperson can look at things from the other person’s perspective. What are they going through, professionally and personally? You need to understand their business and personal objectives. If you’re dealing with someone who’s brand new, they’re looking to make a mark. They need to gain credibility. They’re going to press you hard in the negotiation to get an early win.
We always think people will fight for price concessions. But that’s not always the objective. What goes beyond the financial metrics? Maybe they want a stable vendor relationship. When you can combine the objective's empathy for their position, you’re in a good position entering that negotiation.
Mike dropped some great advice:
When we set an arbitrary time limit, it creates undue pressure. Mike points out that we’ve all bought a car. Why do you think the salesperson says, “What’s it gonna take to put you in this vehicle today?” They impose a timeline on you which reduces your freedom in the negotiation.
Mike had worked with a major client for a couple of years. She was a Senior Executive in the Learning & Development segment of her organization, who answered to the Chief Human Resources Officer (CHRO). She approached him to do some work and agreed on a dollar amount. But then the contract was kicked over to procurement.
Procurement started pushing Mike on price and asked for a discount. Mike wouldn’t agree but the individual kept pushing him. At one point, the individual hung up on him. Mike was angry. He knew he was being baited to get emotionally involved. So Mike paused, called him back, and restated his position. Then he asked to get his contact involved.
Mike knew that procurement had no idea who she was. So Mike called his client and filled her in on the situation. She said, “I’ll call you back.” Five minutes later, procurement called him back and said “Should I email the contract or fax it?”
His contact explained to procurement that this was her top initiative for the year and it was her top deliverable to the Chief Human Resources Officer. The CHRO had a reputation for bulldozing over anyone in her way. She told him if he delayed it further, he’d need to call the CHRO directly and explain the situation.
If procurement had done his proper research and understood the key players in the conversation, he would’ve known better. He didn’t do any research, which caused an embarrassing moment for him. You need to know who’s involved on both sides of the table.
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