Every sales person has to go through the negotiation phase before closing the deal. This is the skill sale person should have mastery on; without which one cannot close the business transaction.
Rather, negotiation is every human’s basic tendency right from childhood. We keep demanding certain things throughout our life but settle with something else if our demand is not getting fulfilled. This settlement itself is part of negotiation.
In business terms, it has to understand in more detailed manner;
Of course, business negotiation is not only meeting and discussion across the table on commercials. It is one complete process which begins much before that. Rather from very initial stage of any business prospects. Process mainly comprises following points and required to collate details about those;
- Complete requirement analysis of customer
- Whether your offerings are fulfilling customer’s requirement in complete manner
- Are you offering any value add in addition to the basic needs of customer
- Do customer already using similar material / services from any other vendor
- How is customer’s current working relationship with existing vendor / vendors
- Why and how your proposal is under consideration by customer
- Who all are decision making stake holders
- How is your capability and positioning done with concern stake holders
- Why customer is looking for change in vendor, if at all
- Is your commercial proposal and terms conditions in line of customer’s expectations
- How critically customer need your offering
- What is usability of material / service you have offered, from customer perspective
- Who others have submitted the proposal along with you
- Clear understanding of competitors and their strong and weak points, including existing vendor
Knowing answer of these questions is important before entering in negotiation meeting. That’s not it. You really need to build personal rapport with customer and ensure to win their confidence on you. This will be definite advantage for you to kill the competition. If you are ready with your preparation, you will be confident in negotiation meeting.
Some basic points one should follow in actual negotiation;
- Be confident about your offerings
- Meeting should start with informal discussion, possibly current business affairs
- When it comes to business, start with summary of transaction till date, strictly limit to the business proposal submitted
- While concluding summary, ask customer” when are they planning to close the requirement”
- If customer is saying, they are planning to close immediately, express your keenness to it.
- Definitely this will lead to commercial discussion. Wait for customer to open the topic of negotiation.
- Emphasize on how you have offered your best deal to them.
- Of course customer will ask for discount.
- Discount and negotiation happen on two things primarily, at this stage. One is commercials and other is terms and conditions.
- 90% or more cases get close on negotiation round. You have to keep some reserved margin in your proposal for this particular meeting.
- In negotiation round, never be rude saying this is our rock bottom and we cannot offer any better than this.
- Try to be flexible and accommodative. You really need to express that approach from your words and your body language.
- While offering your revised proposal, ensure to ask is there any further negotiation rounds. If yes, again do not offer rock bottom. If no, offer your best.
- If you have offered your best, emphasized on closure. Do not keep the case open as far as possible.
- While submitting revised final proposal, always ask date of closure by which customer is taking final call.
- Your proposal should be with validity date. Especially when you are submitting the final one, you have to emphasize of validity of commercials agreed.
- If you are at negotiation round, then you have all possibility to win this case. It all depends on how you are handling the situation and get the business bagged as per above given guidelines.
Some practices to be followed strictly;
- Promise what you can deliver
- Never criticize your competitor
- No matter how friendly you are with customer’s stake holders; don’t cross the line in meeting.