Welcome,

This a fantastic second part to our examination of the 6 most costly mistakes people make when negotiating. This issue looks at arguably the 3 most frequently made. If you didn't catch part 1 then don't worry. It's available here

I hope you enjoy it and I look forward to hearing your thoughts and comments

All the best,

Peter O'Donoghue

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"How To Avoid The most Costly Mistakes Most People Make When Negotiating - Part 2"

 

Without doubt, negotiation is the key thing that workshop attendees think that there is a 'black art' to. I am going to prove to you that there is no black art to negotiation - and in fact you can be a master at it. Most people tend to just end up haggling or bargaining when they think they are negotiating.

This results in discussions batting back and forth about price. This doesn't get either party anywhere.

 

Key Negotiation Principle #4: Set  the scene to show you are not a desperate seller

By careful sales planning and sales strategy it is possible to position yourself in the marketplace as an expert, an in demand provider, the only possible solution provider and the only solution to the other persons problem. If the scene is set where you are perceived as being desperate for the business then the other party has a potential advantage over you.

 

Key Negotiation Principle #5: Plan Your Objectives and  Concessions

 

Before you enter into any business negotiation always - and I mean always - sit back and work out what are your top 3 expectations are from the negotiation.

Take out a piece of paper and draw three columns down the middle. In column 1 list all the separate elements of your product or service offering. In column 2 write the minimum price that you will accept for that part. In column 3 write down the bare minimum concession that you are prepared to take.

Never, Never give away anything without getting something back in return. If you do then you are at best bargaining and at worst conceding. If you have had a good rapport throughout, have worked on delivering a high value to the prospective client then you should be comfortable with your offer. If the other party is still there with you then they are roughly comfortable with your offer too.  Be confident in the value you bring and demonstrate that if the other party wants you to give away something then they have to give away something too!

 

Key Negotiation Principle #6: Trade Something with High Perceived Value

 

This is by far the most underused and most potent negotiating method.

When you are considering your concessions (Principle 5) look at the products and services that you offer. What can you trade in a concession that has a high perceived value for the other party but little or no cost to you? This is the ultimate win-win solution/

If I was negotiating hard  with an car dealer and was looking to get him to drop the price by £1,000. He could respond by offering me 3 Free services and complete car valets - each valued at £350. For me this is a great deal that could lead me to sign the paperwork. For the car dealer this is a cheap alternative to dropping his price by £1,000. Can you see why?

• The real cost of the service to the car dealer is probably around £50 per service - not £350. So realistically he has dropped his price by £150.

• The services are spread out over a period of one or two years therefore is having a minimal impact on his cash flow. Instead of sacrificing £1,000 now he has sacrificed three time £50 at some time in the future.

 

Well there you go. I guarantee that if you utilise the 6 negotiating principles contained within the two newsletters then you will never lose out in a negotiation again. More importantly, neither will the other party.

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Recent Highlights from My Sales Blog:

Death By Powerpoint --- A funny Youtube clip showing how not to make a presentation

A comical Presentation --- A different Youtube clip showing how not to engage an audience with a sales presentation

Me with Dan Kennedy --- I was lucky enough to meet one of the worlds greatest marketers and multi millionaires

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