How to wrestle an advantage

While organisations make a significant investment in sales skills, a crucial element of capability development is under-resourced and poorly executed – and that element is negotiation skills. So, we decided to develop our most significant observations and recommendations on negotiation – those we see most often through our training and consultancy work – and define a set of 12 rules of negotiation. The purpose for sellers is straightforward – to help them to negotiate more effectively with buyers.

Over the past six editions of Winning Edge I have explained these 12 rules in some detail. In this, my last article in this series, I provide a summary of them – and some final thoughts.

RULE 1 IF YOU DO NOT ASK YOU WILL NOT GET!

l How can you achieve your aspirations if you do not ask your customer or prospect for the business? l Lack of conviction and failure to close the deal are the main downsides if you don’t. l You may be pleasantly surprised by the answers you receive if you do.

RULE 2 NEGOTIATIONS ARE WON IN ADVANCE

l Negotiations are won in the planning and preparation, not at the table. l Only about 4% of negotiators spend enough time on planning, preparation and rehearsals. l Spend four times the duration of the actual negotiation on your preparation, planning and rehearsals. It will show!

RULE 3 KNOW YOUR ENEMY AND KNOW YOURSELF

l As ancient Chinese military strategist Sun Tzu said in his treatise, The Art of War, “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” l Understand the buyer’s perspective and the balance of power. l Spend 50% of the preparation time looking at the other party’s perspective.

RULE 4 UNDERSTAND YOUR OWN VALUE

l There are three aspects to value – financial, operational and personal. Clarify them before you start and use them all. l Understand benefits not features, and so bring solutions to needs – not a product set at a price. l Focus on your points of differentiation or you will compete only on price.

RULE 5 EACH CUSTOMER HAS DIFFERENT VALUE TO YOU

l All customers are not equal. Sellers use the “customer positioning matrix” to assess the relative importance of different customers, and therefore how they should be managed. l Buyers use the “category market positioning grid” to assess the relative importance of each category of spend. l Understand both tools and bring the appropriate strategies to bear for different customers. Don’t handicap yourself by being a one-trick pony.

RULE 6 PEOPLE BUY FROM PEOPLE

l Greek philosopher Aristotle said, “Persuasion is the art of getting people to do something they wouldn’t ordinarily do if you didn’t ask.” l So, know about the three types of proof used by persuasive speakers: Ethos (ethical – character and reputation), Pathos (emotional appeal), and Logos (logic). Aristotle understood it all rather well. l People buy from people they like and trust. l People make decisions emotionally and then justify or validate them through logic. Use your customer’s emotions to your advantage.

RULE 7 YOU WILL REAP WHAT YOU SOW

l Think about the implications of your words and actions – they have repercussions and people have long memories. l Our behaviours affect our results – for good or ill. l Any agreement that leaves one party dissatisfied will come back to hurt you later.

RULE 8 COMMUNICATE EFFECTIVELY

l Learn to communicate effectively in every way, not just through words alone

SIMON BUZZA is a Fellow of the ISM and founding partner of the NewDawn Partnership, an advisory service that focuses on delivering operational improvements to the buyer and seller interfaces of a business. Visit: newdawnpartners.com l People make judgements based on external cues, including appearance, dress, handshakes etc. l So, mind your own body language, tone and non-verbal communication. l The better you become at using non-verbal communication and reading the non-verbal messages others send, the more effective in negotiation you will be.

RULE 9 GIVE AWAY NOTHING FOR FREE

l Four key tendencies for giving away value are: habitual “expensive” persuasion styles; treating relationships as more important than commercial outcomes; unassertive behaviour; and a lack of understanding of value. l Get into the right mindset before the negotiation. l Trade everything: “If you do X then I can do Y.”

RULE 10 BE PREPARED TO WALK AWAY

l There is nothing quite so empowering as knowing you can walk away from the negotiating table without a deal. If the other party knows you have to settle by a deadline, all they have to do is set their terms and conditions and wait for the deadline. l Understand your key “tradables” and the potential “zone of agreement”.

RULE 11 UNDERSTAND THE POWER OF SILENCE

l Silence is an extremely effective negotiation tool, but most negotiators are supremely unaware of the power of silence, or they use it badly. l Use silence after making an offer, asking a question regarding a problem or implication, and after being challenged.

RULE 12 SMILE AND SAY ‘NO’ UNTIL YOUR TONGUE BLEEDS!

l People are more inclined to trust and do business with people who smile. l Put “No” into your negotiating vocabulary – it works. It is how you say “No” that counts – do you want them to improve their offer or are you rejecting them outright? l Good negotiators are very persistent.

IS THAT IT?

So, are the 12 rules all there is to negotiating? Incontrovertibly, no. Negotiating requires a complex mix of hard work, practice, skills (technical and soft) and techniques, and the application of good processes. So, there is a good deal more to it than just the 12 rules.

On the other hand, will the 12 rules improve your negotiating? Unquestionably, yes. I strongly urge you to read them, mull them over, and then take a long hard look in the mirror and ask yourself this simple question: “Is what I am doing in a negotiation enhancing or diminishing the potential outcome?” A little honesty has the potential to deliver a massive payback here.

IT’S ALL ABOUT PEOPLE

As you scan the 12 rules, it becomes increasingly clear that negotiation is a people business. Regardless of the balance of power between two parties, negotiations always take place between human beings. And because people are individuals, their pressures, hopes, objectives, options and priorities are very often different from those of the brands and businesses they represent. Humans still love a great in-person experience. As a negotiator, your value is not in stonewalling or commoditising, but in having a vibrant, engaging and provocative negotiation with a client, which helps them look at their challenges in new ways.

Another reason why people skills are so very important in a negotiation is because the negotiation that you are currently involved in is probably not going to be the last one that you’ll have with the other side. How they feel about the outcome of the negotiation on this occasion will play a big role in how they will approach all future negotiations with you. You want them to be satisfied with this negotiation’s outcome so that they’ll be willing to negotiate with you again at a later date. So, develop your soft skills especially your awareness of self and others (EQ) and this will significantly help you in your negotiations.

FINAL THOUGHTS

As we enter a period when digital technology and artificial intelligence look set to expand with enormous and rapid leaps into commercial life and practices, it is worth remembering a few salient points: l People buy from people – especially people they like and trust l All products and services, and indeed, all customers and clients, are not equal. We have preferences, emotional attachments and chemistry in relationships, which affect our decisions about who we are going to buy from and sell to l In business, you don’t get what you deserve – you get what you negotiate l You can be as professional, or as amateur, as you choose at negotiating. Your deal-making fate lies in your own hands.

Through understanding the 12 rules of negotiation, and by following the advice contained within them, your negotiations will improve, your results will get significantly better quickly, and you will become more respected in your relationships. There is an unexpected by-product too: these rules and guidelines are applicable – and bring benefits – in life as well as in sales.