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Formal Negotiating

Formal Negotiating. CHAPTER 13. What is negotiation selling? How does it differ from nonnegotiation selling? What items can be negotiated in selling? What type of planning needs to occur prior to a negotiation meeting? How should a seller set objectives?

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Formal Negotiating

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  1. Formal Negotiating CHAPTER 13 • What is negotiation selling? How does it differ from nonnegotiation selling? • What items can be negotiated in selling? • What type of planning needs to occur prior to a negotiation meeting? How should a seller set objectives? • How can the negotiation session be effectively opened? What role does friendly conversation play? • Which negotiation strategies and tactics do buyers use? How should negotiators respond? • What are the salesperson’s guidelines for offering and requesting concessions? Some questions answered in this chapter are: 13-2 McGraw-Hill/Irwin

  2. “When you understand the way another person feels comfortable communicating, you can change your own communication style to make them feel more comfortable.” ~Joaquin Azanza 13-3 McGraw-Hill/Irwin

  3. The Nature of Negotiation • Negotiation versus nonnegotiation selling • What can be negotiated? • Are you a good negotiator? 13-4 McGraw-Hill/Irwin

  4. Items That Are Often Negotiated Between Buyers and Sellers 13-5 McGraw-Hill/Irwin

  5. Planning For the Negotiation Session • Location • Neutral site • Middle of the work week • Mornings • Time allotment depends on: • Negotiation objectives • Desire of a win-win session from both parties 13-6 McGraw-Hill/Irwin

  6. Negotiation Objectives • Power • Concessions • Target position • Minimum position • Opening position • Should reflect higher expectations than the target position • Must be able to support with solid information • Identify and prioritize issues that could arise 13-7 McGraw-Hill/Irwin

  7. Comparing Buyer and Seller Positions 13-8 McGraw-Hill/Irwin

  8. Negotiation Objectives (continued) • Anticipate and evaluate positions • Create a plan to achieve objectives • Develop alternative paths • Brainstorming sessions • Consider cultural differences Brainstorming session Meeting in which people are allowed to creatively explore various methods of achieving goals. 13-9 McGraw-Hill/Irwin

  9. Using a Team to Negotiate • Pros • More creative than one individual • Help one another reduce the chances of making a mistake • Cons • More participants = more time • Different opinions • Rogue members 13-10 McGraw-Hill/Irwin

  10. Team Selection and Management • Seller team size = buyer team size • Less is more • Defined roles • Team leader • Rules and signals • Practice 13-11 McGraw-Hill/Irwin

  11. Individual Behavior Patterns – Conflict-Handling Behavior Modes 13-12 McGraw-Hill/Irwin

  12. Individual Behavior Patterns (continued) • One person can exhibit different modes in different situations 13-13 McGraw-Hill/Irwin

  13. Information Control • Buying teams also prepare • Buyers gather information to gain position • Selling team leaders need to emphasize the need for security • Many team members do not need all the facts • It pays to control the flow of information 13-14 McGraw-Hill/Irwin

  14. The Negotiation Meeting • Preliminaries • Break the ice • Ensure a comfortable environment • Establish a win-win environment • Prepare an agenda • General guidelines • Listen carefully • Keep track of issues discussed or resolved • Consider cultural differences • Remember people need to save face 13-15 McGraw-Hill/Irwin

  15. The Negotiation Meeting • Dealing with win-lose negotiators • Good guy-bad guy routine • Lowballing • Emotional outbursts • Budget limitation tactic • Browbeating 13-16 McGraw-Hill/Irwin

  16. What to Do When the Buyer Turns to Win-Lose Strategies • Detach yourself • Acknowledge their position and then respond • Build them a bridge • Warn, but don’t threaten 13-17 McGraw-Hill/Irwin

  17. Making Concessions • Never make concessions until you know all of the buyer’s demands and opening position. • Never make a concession unless you get one in return. • Concessions should gradually decrease in size. • Don’t be afraid to say no. • All concessions are tentative until the final agreement is reached and signed. 13-18 McGraw-Hill/Irwin

  18. Making Concessions (continued) • Be confident and secure in your position and don’t give concessions carelessly. • Don’t accept the buyer’s first attempt at a concession. • Help the buyer to see the value of any concessions you agree to. • Start the negotiation without preconceived notions. • If you realize you have made a mistake, tell the buyer and begin negotiating that issue again. 13-19 McGraw-Hill/Irwin

  19. Making Concessions (continued) • Don’t automatically agree to a “let’s just split the difference” offer. • Remain noncommittal when customer asks for a bottom line price. • Know when to stop. • Use silence effectively. • Plan the session well. 13-20 McGraw-Hill/Irwin

  20. Recap of a Successful Negotiation Meeting • Be sure to get any negotiated agreements in writing • Do post-negotiation evaluation and learn from your mistakes • More cooperation exists if both sides expect future interactions • Your goal is to develop a long-term partnership with your buyer • Don’t be greedy or pushy 13-21 McGraw-Hill/Irwin

  21. Summary • Almost anything can be negotiated. • A successful salesperson is not necessarily a good negotiator. • Careful planning counts. • Preliminaries are important in sales negotiation sessions. • Concessions will occur in every negotiation. 13-22 McGraw-Hill/Irwin

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