Wednesday, October 15, 2014
The 1st Immutable Rule Of Sales Negotiation To Remember
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After several years of
working around sales negotiation, I have come to realize 2 essential rules of
sales negotiation which I want to share with you.
In this article, I am going
to reveal the 1st immutable rule of sales negotiation. Let’s begin
the journey towards achieving a win-win negotiation deal! (You can attend our
seminar on “Effective Professional Selling Techniques” & Become a Sales
Superstar! | Know more)
Note-
This
is also applicable to all kinds of business negotiations including sales
negotiation.
After reading this article
which includes easy-to-understand illustrations you’ll be able to achieve a
win-win negotiation deal!
#Law
1- Prior to beginning any negotiation, ask
yourself, “Am I or Are We the buyer’s top choice?
Never start your negotiations
until you’re sure that you’re the buyer's top and foremost choice. This is the
golden rule to remember, why? It’s because
you cannot simply drive your way to the number one preference merely by quoting
lower price. Also you should not! If you do then it will become a race towards
the bottom. This is because there will always be several competitors who will
be willing to offer at lower price tags. However, if you also take the same
road it will put a dent in your profitability and margins. Hence, you will end up in a
win-lose situation where you’ll be the loser!
#Remember-
·
If you are not their 1st preference, the buyer
is only using you to achieve a lowered price compared to the cost of their top preference–
your competitor.
·
If you’re the top preference– you enjoy the
right to quote a price premium.
How to
position yourself as the buyer’s top preference?
An important fact relating to sales
negotiation or any kind of negotiation-
People don’t buy price, they
buy risk!
Hence, don’t focus on
cutting your price but focus on the other party’s risk factors, both business as
well as personal. Embark on methods on how you can reduce them and give the
party a comprehensive solution.
Illustration-
Taking the business
perspective, while evaluating solutions, the client is focused on risk factors
like, “If we choose a particular party and its solution fails then…”
- Will it negatively affect our profits?
- Will it hamper our relationship with shareholders and employees?
- Will we lose out on valuable customers to the competition?
- Will it make us uncompetitive in the market?
Now talking from a personal perspective,
your client is more likely to ask himself, “If we happen to choose this party
and our relationship fails then… ”
- Will I be fired?
- Will this put a dent in my 10-year stint at the company?
- Will it affect my appraisal or bonus?
Understand
what the client actually wants?
As per my experience, there
are few buyers who worry about marginal differences in costs which exist between
you and competition. However, if they are assured of the best solution from
you, you’ve just cracked the sales negotiation or any other business
negotiation pretty well!
Note- The
best solution garners protection from the several risks of the negotiating
party which we just discussed.
Remember- No
one would want to risk their personal careers, business profile and bonus to
take care of families just to save a few company dollars!
#Concluding note- Focus
on re-affirming the negotiating party of securing their risk factors. This will
place you in a better position than competitors and you can then command a
price premium!
In the next article, I will
be revealing The 2nd Immutable Rule of Sales Negotiation to Remember.
Till then stay tuned and have a look at other useful business and management related
articles to get insights to enhance your business related skills and management
efficiency.
Attend IAM’s seminar to enhance
your various professional skills | Know
more
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