Negotiation Techniques (That Really Work!)

Stephan Schiffman

• Publisher: Adams Media
• Year: 2009
• ISBN:
  9781440513190
• Topic: Personal Development
• Subtopic: Negotiation

Sales is all about negotiation. Price. Delivery. Terms.And every day, salespeople leave money on the table. They just don't have the skills to get what they want. Now Stephan Schiffman, drawing on years of experience, shows you how to nail the sale, hit quotas, and boost the bottom line. Schiffman-style negotiation is all about getting the best deal. And he outlines specific techniques to get there.Things can be tough out there. But with Schiffman's negotiation skills in your pocket, you can do battle and win.

PART
1

Before You Sit Down at the Table

CHAPTER 1

Ask the Right Questions

Bob, a friend of mine who happened to be a sales manager, decided that he was finally ready to buy some new windows for his house, so he called up several local vendors, and each sent a salesperson to his house to make a presentation. The windows he liked best turned out to be the most expensive of the bunch, but he was okay with the price and he was ready to buy.

So he called up the vendor and said, “Come on over, I want to do business with you.”

The salesperson who had made the presentation returned to his house, and before Bob could say one word, he said, “You want a discount don’t you? Let me give you 10 percent off.”

Bob had been ready to buy at the stated price, but now he started thinking that maybe he did want a discount, and that maybe 10 percent wasn’t enough.

“I don’t know,” Bob said. “Is that the best you can do?”

Over the next twenty minutes, Bob said very little. When the salesperson offered him 15 percent, he just shook his head. When the rep upped the discount to 20 percent, Bob grunted. By the end of this “negotiation,” the salesperson had given Bob 45 percent off the starting price!

Can you imagine the reaction of that salesperson’s boss when he learned of the transaction? Can you imagine how the salesperson’s strategy cut into his company’s revenue?

Discount or Negotiate

I wish I could say that this sort of incident is atypical, but sadly, it isn’t. For too many salespeople, negotiate comes down to discount. In the case of the salesperson in the example above, he was giving away the store before he even had to—offering a discount before Bob asked for one. But the truth is, he probably didn’t have any other weapons in his arsenal.

SCHIFFMAN SAYS . . .

Going into a negotiation is like going into battle. Each side wants to win. Just as in a battle, don’t show your strengths too early, and don’t use up all your ammunition right away.

Use tactics like discounting carefully and selectively to
respond to the needs and concerns of the customer.

I don’t want to ignore discounting. It can be a very powerful weapon in locking in a sale, and I’ll talk about it in a later chapter. The problem is that too many salespeople think it’s the only weapon. Rather than thinking about all the elements of the sale, they focus on just one: price. That defeats them before they even start.

When putting a deal together, I usually find that price isn’t the real issue that’s blocking its successful completion. There are many others. But salespeople too often act as if once they’ve addressed the issue of price, they’re done. Rather than discounting, they’d be better off asking more questions to determine what the real issues are that are confronting the customer.

Let’s look at the situation with Bob and his salesperson again. The sales rep came into the room with the assumption that the big issue for his client was price. He thought he’d get a jump on the sale from the very outset by knocking down the price with a discount. But the biggest mistake he made was the assumption itself.

What, in fact, did Bob want? He wanted new windows— the salesperson knew that. But what the rep didn’t know is what aspect of those new windows was most important to Bob. How could he? He didn’t ask Bob any questions.

This is the first and most basic lesson I have to teach you about negotiation: Don’t assume. Ask questions.

What else could be important to Bob about the windows?

How strong are they? Bob lives in an area with seasonal high winds that might put special strains on the windows. Frequent hailstorms might shatter the glass. So he’s probably concerned with the product’s durability.

How easy are they to replace? Bob is getting on in years and doesn’t want the hassle of hauling around heavy, awkward window frames. He wants something that will slide into place with a minimum of trouble.

How available are they? Who wants to schlep all the way across town to cart back some replacement windows? And if the local supplier goes out of business, Bob wants to make sure he can still get the windows.

How soon can he get them? Winter’s coming on, the nights are getting colder, and Bob doesn’t want to wait a month for the windows to be delivered. He wants them as soon as possible.

How safe are they? Bob’s grandchildren come to stay with him periodically. He doesn’t want windows they might easily slam on their fingers or glass that could shatter and injure them.

How weatherproof are they? The winters where Bob lives are severe, and he wants windows that will keep out the cold and reduce his heating bills.

The salesperson didn’t ask about any of these things. As a result, he didn’t know what was important to Bob.

Asking detailed questions would have told him that all the issues listed above were on Bob’s mind, and the rep was going to have to address them in his negotiation. Questions would have told him something equally important: Not only were these issues important to Bob, but they were important in a particular order.

Asking about Bob’s needs would have given the rep a hierarchy of issues from which to start negotiating. He would know which things he could push Bob on and where he might have to give a little. In fact, if he’d asked enough questions he would have found that price came pretty low in Bob’s ranking of needs, so the discounting tactic wasn’t going to be especially effective in closing the deal.

Go back to what I said in the Introduction: Everybody wants something, but everybody wants something different. As a salesperson, your first job is to figure out what the client wants.

Let me give you another example. It illustrates not only why it’s important to ask questions, but also why it’s essential to ask the right questions. This story is from the dog food industry. Now, I don’t own a dog, and I don’t buy dog food. But I understand the passionate nature of people who own dogs and are deeply attached to them. That’s the key to making sales to them.

A couple of years ago, the dog food industry did a study of who was buying dog food in order to segment their customer base. It seemed pretty straightforward: There were old dogs and young dogs and big dogs and small dogs. Customers seemed neatly divided into those four groups, and the industry based its marketing and sales strategies on them.

That all seemed fine until some perceptive analyst pointed out that it wasn’t the dogs who were buying the dog food.

The industry folks who had commissioned the study thought about this for a while. Then they redid the study. But this time they focused on the attitudes of the customers toward their dogs. Again, they divided customers into four categories:

1. Dog as animal. People who fall into this category think of their dog as an animal that lives in or outside the house. They give it food to keep it alive and healthy. But they don’t have strong personal feelings about the dog. In some ways, it’s like a tool (albeit one that barks), so price is an important consideration— more important than, say, the quality of the food.

2. Dog as pet. Those in this group consider the dog part of the family. They have an emotional bond with it that goes beyond its practical use. Quality of food is somewhat more important than the previous group, since they want the dog to be happy.

3. Dog as child. Just as you wouldn’t want your little girl or little boy to eat substandard food, the people in this group want their dog to have good, nutritious dinners. Price is much less important now, compared to quality (for instance, the amount of necessary vitamins and so on).

4. Dog as grandchild. Nothing is too good for these pooches. Money is no obj...