7 cues for negotiation
I was a witness of an interesting sales negotiation experience a few days ago. We were driving in our neighborhood and came across a car dealership. Buying a new car has been on our minds recently, so we stopped to have a look. We were not prepared to make any decisions on that day, yet, by the end of that day, I was almost sure of what I wanted and the next day we purchased a car.
How did this happen?... I actually hadn’t thought of that until the next day, when we came back for a test drive and then sat down for a chat with our sales representative - a very genuine young man, knowledgeable, and conscious of our needs. Since the very first point we met the guy he stayed aware of a short time we’d been prepared to spend browsing, hence was very open and straight to the point, or actually 3 key points which were important to us: a) functionality; b) aesthetics; c) price. Once he identified the right “solution for this equation”, he gained our commitment to come back and eventually finalize the deal and search for no more.
What caught my attention was the fact that despite such positive result, our sales rep seemed to have found himself in small trouble with his Manager who got involved into our negotiation process at the final stage... In our understanding, the key point of argument was that in the Manager’s view the sales person should have taken a gradual approach to price negotiation with us rather than “give it away” from almost the first instance.
I should point out that the Manager’s involvement was in absentia. He wasn’t aware of how our decision had been evolving and the fact that his junior sales colleague managed to generate our interest in less than half hour (!) and sell his product (a car) quickly and within the authorized price-frame while also gaining some brownie points towards our future loyalty.
This is what I would call “effective negotiation” and I often wonder why many business managers, politicians, or even family members for that matter would not “open their cards” when negotiating a desired outcome. Why do they refrain from being honest with each other and respect the fact that unless the result is a “win-win” situation, it will not last for too long and may boomerang you one way or the other at a later stage?
“Get it right from the start!”
Most academics agree that negotiation is a process that consists of a number of steps, which includes preparation and understanding of the context. However decisions on how fast those steps should be taken, when it is vital to skip some of those steps - are all subjects to intuition and the right judgement for which approach would be the most suitable in a particular situation.
I recently came across an interesting article where the authors evaluated the influence of accurate intuitive and deliberate judgments on the performance of sales people. According to them, the intuitive judgments are those made rapidly, unconsciously and based on memory matters in sales person’s mind, usually built up through experience or personal similarities.
On the contrary, deliberate judgments are more conscious, analytical and take a longer time. While emphasizing the significance of both types of judgments for effective decision-making, the authors warn against "over-thinking", which may lead to deliberate inaccuracy and reduced sales performance. In other words, they say "Get it right from the start"! Accurate intuition enables initial sales strategies and improves the effectiveness and efficiency of sales efforts.
Julie Demers, an associate editor of CMA Management magazine, refers to Professor Gilles Gauthier in explaining that negotiation tactics differ from strategies which generally fall into two main categories - a collaborative or a competitive approach. They also point out that many negotiators continue to use a competitive or even confrontational approach in their negotiations which often leads to short-lived success, whereas in win-win or compromising negotiations the focus is on mutual respect and reasoned discussion.
My top 7 cues
There are many more views and opinions on effective negotiation proposed by both academics and practitioners. Having worked in the sales industry for over 20 years the only thing I can confidently say is "It all depends". It depends on the product, on supply and demand, on financial and emotional value, very much on culture, and a lot more. Nevertheless, here is a list of my top 7 generic suggestions that I would share without a doubt:
1. Always maintain a real-time product intelligence
2. Trust your intuition, but learn from your experiences: check your intuitive accuracy by tracking your judgments, actions and outcomes
3. Cultivate empathy - the ability to listen and connect
4. Tailor your sales strategy - there is no magic formula!
5. Respect your opponents - be genuine and collaborative
6. Maintain the momentum - don't let an interest or an opportunity slip through your fingers
7. Stay ahead of a game by having your Plan B and possibly Plan C ready