As a business owner, negotiation will always be part of your repertoire of skills. This involves not only you sealing the deal, but also trying to forge a win-win situation in any negotiation. Your objective is to have a deal wherein both parties get the optimal results of the contract. Let me share some sure-fire tips that will help you manage those situations.
1. Know the ins-and-outs of your Product or Service
Always remember that when it comes to your product, you’re the expert. These customers approached you because you have something that they think they want or need. It’s your task to make sure that customers know what you’re offering, and your product actually matches what your client is looking for. Moreover, if a potential client is trying to offer a price that’s lower than what the product or service deserves, knowing your product well has its advantages. Knowing your product’s features, advantages, and benefits can drastically turn the table around once you’ve answered your customer’s ultimate question: “What’s in it for me?”
2. Engage in Effective Communication
Negotiation, like any type of communication, is give and take. I’m sure you’ve heard of that old saying, “Communication is a two way street.” This is true, especially in negotiations. Like in any other conversation or exchange, one party speaks while another actively listens then replies. The same process is repeated until an agreement is reached. In order for communication to be effective, there always has to be one speaker and one listener at a time. With that said, take note to only speak when it’s your turn; don’t talk-over your customer. Moreover, when it’s your turn to listen, listen actively – paraphrase when needed. Ask questions if things are unclear.
3. Stand your Ground
If certain values or principles that you hold dear are being threatened, hold firm to them. These things are much more important to you than money. Believe me, clients will appreciate you for standing your ground and will respect you for that. Everyone despises ‘sell-outs;’ and that’s what you don’t want to become in front of a potential client.
4. Caution: Low Margin
If you know you’re getting the shorter end of the deal, cut your losses right away. Treat contracts that offer very low margins with utmost caution. Though it might appear that you’re making a little, but the extra effort and cost will eventually pile up and bite you in the long-run. Know when to let a contract go. You’re running a business, not a non-profit organization.
5. Don’t Grab the First Thing you See on the Table
When starting negotiations, your clientele will start at the lowest end of the cost spectrum, most of the time. Always remember that their agenda is to get the best possible deal at the lowest possible price. It is then your responsibility to re-position your product or service to justify moving the stakes up to the higher end of the spectrum. Saying ‘yes’ to a client’s first offer might deprive you of potential higher revenue. Also, don’t forget to pay attention to the fine print.
6. Learn to Read Between the Lines
Learn to read your potential customer’s body language. Though they may not directly say it, you can still gauge where you are when it comes to the customer’s favor. Some positive signs that you are being highly considered are quick return calls, appointments are strictly kept, and they get back to you as they had promised.
7. Consistency is the Key
Consistency is the key to any business negotiation. If you had used a certain format for a business letter or presentation; stick to that structure during the entire negotiation process. Being consistent in even the smallest of details projects that your product or service quality will stay as consistent as your letter or presentation format.
8. Don’t Jump the Gun
Does the idiomatic expression, “Don’t count your chickens before they’ve hatched,” sound familiar? A lot of things can happen during (especially the wait time) negotiations. Only include your contract in your financial projections once you’ve actually signed the deal.
9. Take no Shortcuts
The representative you’re talking to are bound by some rules and regulations, and so are you. Don’t try to pull a fast one by doing deals that are outside standard operating procedures (SOP).Engaging in such practice doesn’t only count against your integrity, but might also rake you in some points when it comes to serving years in the slammer.