So there you are: the classic sales negotiator in the headlights. You’ve got a firm fixed price that you’ve been told to not budge on and yet you know that you’re getting ready to start a negotiation during which the other side is going to be hammering you to lower your price. Sure doesn’t make you want to get up early in the morning, does it?
Rule #1: Slow Down
When I’m working with clients who have a technical background, the question of how fast to move during a negotiation often comes up. Specifically, if you think that the price that you are asking for is going to be a big bone of contention, then should you just cut to the chase and start talking about price right off the bat?
Interestingly enough, and somewhat counter intuitively, the answer is no. If you jump to talking about the issue that you think is the most important, then you’ve lost an important opportunity to find out what the other side of the table thinks is the most important issue – and it may not be the same thing that you are worried about.
Taking your time also gives you a chance to gauge the other side of the table’s interest in the overall negotiation. If they need to get this deal done and move on to other things, then there may really be no sticking points at all if you don’t bring them up.
Finally, by taking time to get around to a major issue in the negotiations you are sending a signal to the other side of the table. Specifically, you are telling them that you are not all that anxious about this negotiation and that you won’t be caving in to their demands.
Rule #2: It’s All About Your Exit Plan
If you are going to look the other side of the table in the eye and tell them that your price is the best price that they are going to get from you, then you’d better be ready to back that statement up. This means that you’re going to have to have done your homework if you want to have an exit plan that will allow you to avoid having the negotiations end in a wreck.
Why are you charging the price that you are charging? Is your price as good as anyone else’s? Prove it. Is it based on what you charged this customer last time they bought from you? Prove it.
Your goal here is to boost the credibility of your price in the eyes of the other side of the negotiating table. The more that you’re able to do this, the better the odds are that you’ll eventually be able to get them to agree to doing a deal with you.
There is one additional side benefit to doing your homework and providing a solid backing for the price that you are asking. If in the end you find yourself having to make some sort of concession, no matter how small, on your price, then having presented a solid case for the price will end the discussion. The evidence that you provided should stop the other side from asking for even more concessions.
What All Of This Means For You
Starting a negotiation when you know that you you’ve got to defend a price that will be coming under heavy assault from the other side of the table is never fun. However, it is possible to be successful if you’ve done your homework before the negotiations begin.
Speed kills in a negotiation. Don’t dive in and start talking about the most challenging part of the negotiation right off the bat. Instead let the other side drive the discussion and find out what’s important to them. Also always have the facts to back up your price – it will make your job that much easier.
It is possible to come out of a negotiation with your price intact. All it takes is the good sense to take it slow and to come prepared to explain why your price is one that the other side is going to be willing to live with.
Question For You: Do you think that you should ever bring up a negation point, or should you always leave this to the other side to do?
What We’ll Be Talking About Next Time
Ok, so it’s time to get down and dirty about this sales negotiating stuff. Time after time I keep seeing sales negotiators making the same two mistakes over and over again and it just has got to stop. You can build the best product in the world, have the best sales team, but if you keep dropping the ball when it comes to negotiating the sale, then it’s all for naught…