When negotiating, most sellers believe buyers have all the power. They have the money and can very easily buy from a competitor. In our Value-Added Negotiating class, we ask buyers who has the most power. Buyers respond with the seller. Buyers need what the seller has to offer. Sometimes competitive products and services are not as good.
Power in negotiating is a state of mind. It’s a perception. If you perceive your customer has all the power then they do. If you perceive you have the power, then you do. Remember, you have the power to walk away or choose not to make a deal.
Try this at your next sales meeting:
Want to learn more about how your people negotiate? Consider using the following exercise at your next sales meeting with your team. Focus on being fair; use the following scenario to gauge how your team determines what is fair.
You are the sales manager. You have one new company car. You have the opportunity to give the car to one of the following sales people. Who gets the new company car and why?
SALES PERSON #1 He has been with the company 17 yearslonger than any other sales person. Giving him the car shows you appreciate his loyal service with the company.
SALES PERSON #2 She has been with the company six months and is progressing very well. Giving her the car would be motivating and cause her to be happy with the job.
SALES PERSON #3 His company car is the oldest in the fleet. Service is becoming a problem. Giving him the car shows you care.
SALES PERSON #4 She has the largest territory and her car has the most mileage. It is time to replace the car. By replacing her car, you reduce the chances of roadside problems.
SALES PERSON #5 She is well over quota for the year. That is what counts. Show her your appreciation.
SALES PERSON #6 He has the most profit year to date. If you give him the car, profit is encouraged.
Who should get the car? Why?
This exercise will prove that “Fair” is in the eye of the beholder. Buyers and Sellers perceive fair differently. This enables your team to empathize with their prospects and level the playing field. Using the term “fair” during a negotiation lowers tension and builds trust if communicated in a calming tone. One of the worst things you can do during a negotiation is leave not knowing how your customer truly feels about your solution, your company, and most of all you. Don’t assume you know. Ask!
Click here for a PDF file of this exercise. Be prepared before you negotiate.
While talking with a client the other day, I happened to mention that Sales Concepts has been providing sales and customer service training for over thirty years. After this, the client said, “Wow, I guess you have seen and worked with a lot of sales people. What would you say is (as a whole) their biggest weakness?” Upon reflecting on that for about two nanoseconds, the answer was obvious. Sales people, as a whole, don’t ask enough questions! Why don’t we ask questions? There are many reasons.
Here are a few:
- Bad timing.
- It’s none of my business. I don’t want to pry.
- The question is too hard to formulate.
- The customer probably does not know the answer.
- Too many questions may annoy the customer.
- I don’t want to look stupid.
- Oops, I wasn’t listening.
- I just assumed that…
- Lack of preparation.
- The answer might be embarrassing.
- You are in “tell” mode.
- I just plain forgot.
This list continues. Perhaps a more positive approach is needed. Let’s take a look at the power of questions. When you ask a series of meaningful, well thought, well-prepared questions you come across as someone who cares. Caring is a natural bi-product of meaningful preparation. Questions can bail you out of a jam. Remember you can’t say something wrong if the customer is talking. Open-ended questions help you prepare for what is coming. Ask questions so that you are able to deal with objections later in the sales process. By the way, asking questions is the best way to handle objections. You may think you know what your customers are saying, but do you understand what they mean or more importantly—what they want? There is no better way to uncover opportunities than to ask questions.
Now let’s review that list one more time. Bad timing may be a reason to postpone a question; it’s never a valid excuse not to ask it later. Jot down your questions as you talk with your customers so you can ask them later. Of course, it’s better if you have them prepared in advance. The rest of the reasons we don’t ask enough questions can be solved by better preparation and a little confidence. Oh, and by the way, the best method to gain more confidence is to be prepared. Invest some time before your customer encounters. Be prepared. Recognize and test your assumptions. Have your questions prepared in advance. That way after your call you won’t pound your forehead saying, “Why didn’t I ask that?”