Negotiation strategy – positioning the glass as half full

Negotiation Strategy

Negotiation Strategy

There are a substantial number of skill sets and bodies of knowledge that constitute the discipline of sales negotiation. In the end, however, the ability to craft and execute a thoughtful and creative plan for the negotiation is a bottom line for achieving a successful end result. This is particularly true in major accounts where the negotiation is complex and there is more to lose and more to gain.

In any major account, if the sales team is actively engaged in the negotiation process without a well-conceived and coordinated plan, they are playing Russian roulette with the long-term relationship with the customer and with the profitability of the sales opportunity.

Anchoring your message.  In building a well-conceived plan the importance of anchoring is consistently underscored as one of the factors for getting the job done. The concept recognizes the old adage – “how you say it is as important as what you say.” Whether the glass is perceived as “half full or half empty” all depends on how one frames the conversation about the contents of the glass.

In a sales negotiation anchoring is all about presenting your concessions on a given issue in a way that justifiably emphasizes the value of those concessions.

The most practical and best-supported phenomena in anchoring relates to the notion that individuals generally do not evaluate concessions in an absolute sense but rather as a change with respect to some reference point.

So the anchoring challenge boils down to selecting the most effective reference point. Is it: the status quo, a prior contract, a competitive comparison or some industry standard? In the end, anchoring is part of how you help your customer understand the value of your concessions. And, remember anchoring will always occur, so if you don’t do it your customer will.

Building value.  It is difficult to overemphasize the importance of anchoring. No concession whether it is on price, technical support or any other issue – has a fixed inherent value.

As part of the anchoring process top negotiators build and verify the value of a concession before they offer it. In doing so in major accounts it is important to remember different people in the account may have different views about the value of a concession.  So how you go about optimizing the value of a concession is position specific. In that regard, the opportunity may exist to use others, such as your internal champion, to influence the value with the major players in the decision process.

A final point. The least desirable outcome is offering in good faith a significant concession, only to find out after the fact, that it had very little value to the customer – hence, the deal was lost. Of course the best situation is to provide a concession of significant value to the customer that “costs” you very little. The moral of the story: being smart about customer value is just as important in a negotiation as it is in any other aspect of selling.

Download our free eb00k – Mastering Magor Account Negotiating now.

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About Richard Ruff

For more than 30 years Dr. Richard Ruff and Dr. Janet Spirer - the founders of Sales Horizons - have worked with the Fortune 1000 - such as UPS, Canon USA, Smith & Nephew, Boston Scientific, Owens & Minor, Textron - to design and develop sales training programs. During his career Dick has authored numerous articles related to sales effectiveness and co-authored "Managing Major Sales", a book about sales management, "Parlez-Vous Business" which helps sales people integrate the language of business into the sales process, and "Getting Partnering Right" – a research based work on the best practices for forming strategic selling alliances. Dr. Ruff received his Ph.D. in Organizational Psychology from the University of Tennessee and a B.S. from Rennsselaer Polytechnic Institute.
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