Negotiate To Close Essay, Research Paper
Negotiate to Close
How to Make More Successful Deals
In this book the author uses the salesperson relationship of the buyer and seller to discuss negotiation. The author identifies the sources of power that a seller has when negotiating, and the tactics used by buyers to get what they want. Recognizing these key points allows sellers to become more effective negotiators.
According to the author, power is what you think it is. If people think they have power, they will even if they don’t. Alternatively, if people don’t think that they have power, they won’t even if they do. There are several sources of power that a seller has that will strengthen their negotiation capabilities.
One source of power is that which your competition gives you. It is important to recognize that competition can work for you and that buyers do have limits. Buyers will not consider using a competitor because of a product not being reliable, of a dislike for the organization, or of the price of the product. A second power that a seller has is the power of commitment. You will have power in the negotiation process if you are committed to what you are selling and use the commitment of others. The commitment to your organization demonstrates your belief and loyalty in the product and the company. When you have others committed to your product, they will stand behind their own words. A third power is the power of wooing. The sellers ability to woo his client shows the client how much his business is appreciated. In taking the added steps to show the client that you want their business, and not need this business, you will gain power in the negotiation.
Another power that can be useful in acquiring your needs in the negotiation process is the power of risk. The willingness to take risks is a very important power to you but when you don’t take calculated risks, this power can be harmful. By accumulating knowledge about the client and their needs, learning about your competitors, and gaining knowledge about your product and company, you can minimize your risk. When you analyze all factors that are important to the negotiation, you can minimize your risk factor and make take the extra steps to close the deal. Time is the most important power that sellers have. By taking your time, you have the opportunity to realize all your sources of powers. The time taken in this discovery process allows for you to negotiate your position in a more powerful manner. Negotiations tend to have many timing factors associated with them from deadlines to meeting. However, both parties are on time restrictions and sometimes these restrictions can be altered to allow more time for discovery. When time is used wisely, you will see advantages to your negotiation. Time is money, and when more time is taken, it has been proven that you will see more money.
Yet another power that a seller has is the power of legitimacy. Terms, conditions, and price scales are a few items that can be seen on printed forms and have the power of legitimacy. Buyers tend to think that prices or terms are not negotiable when actually they are. Clients are inclined to conform to the principles, standards, and rules when presented on printed material. With the use of printed material like forms and price tags, your customer will be less likely to question or negotiate conditions, terms, or price. By discovering the powers that you have, you will have the capabilities to recognize and meet the needs of both parties in your negotiation for mutual satisfaction.
Buyers have numerous tactics to which they implement to weaken the seller’s position. When negotiating a sale, the buyer digs up all the negative points or weak points about the product to convince the seller that his product is not the best. This is done by demonstrating to the seller that his product is not the only product on the market and by telling the seller that his product is not worth the cost. One tactic a buyer uses to get what they want is referred to as the “bogey”. In this scenario, the buyer compliments the product and indicates that this is the product they were looking for, but then the buyer poses a problem or dilemma to the seller. After the seller receives an ego boost, his reaction is one of wanting to solve the problem and to make the sale work. The seller then tries to consider options and typically, considers lowering his profit margin.
The second tactic used by buyers is the “krunch”. The buyer acts on the seller’s lack of confidence in his prices by using such phrases as “you’ve got to do better than that” or “you are close”. The seller agrees with the buyer and comes back with a better offer. A third buyers tactic implemented is the “take it or leave it” tactic. This limits the seller’s choices and forces the seller to act in agreement with the buyer or to take the alternative and pass up the sale. Another tactic used by a buyer is the “nibble”. This is where he pushes for something more in the like a tie with the purchase of a suit.
Although buyers with the intent to force the seller to lower a price or meet other needs use tactics, these tactics are still negotiable. The seller’s job is to recognize the tactics of the buyer. When a seller recognizes a buyer’s tactic, he may not want to bend to the buyer’s demands. This does not end the negotiation process, as the seller will implement countermeasure to deal with the buyer’s tactics. This is possible because throughout the negotiation process, the needs of the buyer and seller are always changing. A buyer is typically solely concentrating on the price in a negotiation and when the price is not negotiable, the seller may satisfy the needs of the buyer by offering other need fulfilling incentives to the buyer and therefore, the buyer is willing to pay the price. Making the customer believe as though they got a bargain is one way in which the needs of the buyer can be met.
Another good technique to be aware of is that sometimes the feeling of satisfaction comes more from how you got the price than what the price is. When making concessions, concede in small increments rather than large, give yourself room to negotiate, and always try to get something in return when you concede. This allows both parties to feel as though they worked for the end negotiation and gives the feeling of satisfaction.
In conclusion, time enables you to realize your sources of power in negotiation, helps you identify buyer tactics, helps you consider and use countermeasures to those tactics, and enables buyer wants to change during negotiation. With these strategies, tactics, and techniques, you will be a more effective negotiator.