In the world of sales, it is fairly obvious that win-win is the best approach in any negotiation. The last thing you want to do is upset your customer by strong-arming them into agreeing something that really is not in their best interest. If you annoy them too much, they just won’t use you again. Bye-bye customer, bye-bye revenue, bye-bye sales commission, bye-bye summer holiday.
Make your life easy for yourself and the easiest person to sell to is an existing happy customer.
On the other hand, win-win does not mean lose-win, you certainly do not want to give so much away that you are not profitable. Some customers can be more trouble than they are worth and the best strategy with these is to get rid of them.
And, make no mistake, they will try to take what they can from you. There are stories of legendary purchasing officers who are built like a bull and make Mike Tyson look effeminate. They shake your hand and your fingers crack. They slowly start the squeeze. The price goes down and down.
So what is the best strategy to finesse this conundrum? The answer: Strong Win-Win. Strong Win-Win is an approach that achieves mutually beneficial outcomes without fear that you will be taken advantage of and it is a simple 6-step process.
Step 1: Prepare
I worked with a senior procurement officer at a major Japanese electronics firm. He thought 70% of the negotiation is in the preparation. So, clearly, if purchasing are going to put in that amount of work beforehand, you should too. Know your facts and figures and know your pounds and pence. The better you know the economics of a sale, the easier you will find it to think on your feet and say yes or no to any particular request. In fact, know the economics of their side too. They are much more likely to be win-win if you are offering a genuine win for them.
Step 2: Develop a strong Plan B
This is a golden rule of negotiation, if you have no alternative you are not in a good negotiation position. So never be too dependent on any one customer. They will be able to ask for anything they like and you will be desperate to keep the account.
Think about it, if you are selling your car and you have a number of people coming around to see it at the same time, you will feel confident in (politely) turning down any request for a discount.
Step 3: Establish High Rapport, Establish High Credibility
Salespeople are usually good at building relationships, they know it will help them get a better deal. But it’s not just about rapport, you also have to project strength too, so they don’t consider you a soft pushover. Make sure you don’t make too many concessions just to keep them happy. Again, know what you can and can’t deliver profitably.
Step 4: Move Them to Win-Win
In other words, make sure they really see the value for them in the current deal, you may have to do the calculations for them. And, conversely, make sure they aren’t trying to squeeze you into agreeing something that is unprofitable for you.
And if you have put steps 1-3 in place and follow up with steps 5 and 6, you will probably find that step 4 happens automatically.
Step 5: Solve the Problem
In fact, the Strong Win-Win method reframes the whole of negotiation to a collaborative problem-solving process, where the problem is: how do you create extra value so both sides get a win given the resources each brings to the table and given the constraints.
Ideally, you are aiming to build the trust so you can make it an open-book conversation (both sets of books, of course!). If you can reach this, you really will find the best win-win solution available.
Step 6: Trust but Verify
Then lastly, trust but verify. Trust is exceedingly important but you never know what other factors might come into play. So always make sure you have all the correct procedures in place, it is the very existence of these that will enable the trust.
Follow these 6 simple steps and your sales negotiations will go smoothly – you will get your outcomes and you will help your clients get theirs, all the while building great relationships with them.
By Simon Horton, Lead Trainer at Negotiation Mastery and Author. Simon has been teaching negotiation skill for over ten years through his specialist training company, Negotiation Mastery. He is also a Visiting Lecturer at Imperial College, London, and is a mentor on a scheme run by the Said Business School, Oxford University. Simon is also the author of the best-selling book Negotiation Mastery, and before teaching negotiations, he spent 12 successful years as a consultant in the financial services sector. The Leader’s Guide to Negotiation: How to use soft skills to get hard results by Simon Horton is available now, published by FT Publishing priced £16.99.