What we do naturally is not always effective. When we fall, our instinctive reaction is to stick out our arms to break the fall. In martial arts, one is trained to roll into the fall and use the momentum to get back on one’s feet. If you stick your arms out, you are more likely to get hurt. Hence, the natural response is not always the best response
Effective negotiation is often counterintuitive. Accordingly, most salespeople need to learn new responses to many situations in the sales process. As a prospect, I have sometimes counted on making the salesperson uncomfortable with my implied threat that he might lose my business if he did not negotiate on my terms. I figured if I scared him a bit, he would give me a significant price reduction. When prospects try to make us uncomfortable, we need all the help we can get with responding appropriately and negotiating effectively.
Here are some things to consider. Under pressure we tend to react vs. respond. Reactions are instinctual – fight or flight. In negotiations, those two possibilities translate into DOMINATING or WIMPY. Neither is an effective way to respond to a prospect.
The Response Continuum is a range of responses that you might choose in dealing with prospects. Think of this as you do the voltmeter on your car’s dashboard: too low is just as bad as too high. Here are the possibilities: 8Volts=Wimpy; 9V=Subservient; 10V= Obsequious; 11V=Accommodating; 12V=Collaborative; 13V=Assertive; 14V= Aggressive; 15V=Demanding; 16V=Dominating. The effective range is 11-13 volts. Outside of that range your response is ineffective and will not help create the win-win situation that you should strive for when negotiating.
The Wimpy End What happens if you respond to a prospect on the extreme wimpy end (8-10 volts)? Suppose the customer “flinches” and pressures you for a discount. A common reaction is to focus on price and say one or more of the following:
• How low would we have to be to win your business?
• Well, that’s list price.
• I’m sure you’ll qualify for some discounts.
On the wimpy end, when the prospect asks for something, you are most apt to acquiesce by providing unilateral concessions or free gifts. Once again, you are the wet rag, and as long as you keep dripping, the prospect has no incentive to stop squeezing. Also, if this deal closes, it becomes the basis for all future deals with this prospect and this is not good.
Another bad thing can happen on this end. Some prospects like to play, and concessions too easily won cause them to question your value. Many people tend to enjoy a close and hard-fought victory much more than a romp.
The Dominating End On the dominating end (14-16 volts), you try to “win” conversations. You defend and justify, saying things like:
• We have a far superior (product/service) than any of our competitors.
• Take it or leave it!
• You would be foolish to pass this up.
The most likely outcome is that you lose. But, if you do manage to force the prospect into a deal, the relationship is forever damaged. The losing party will be looking for a way to even the score. Eventually you’ll end up on the short end of the stick.
The Play Zone This is the EFFECTIVE range on the Response Continuum, the 11-13 volt range. In this range your responses are Accommodating, Collaborative, and politely Assertive. Here you know how and when to plant your feet. You know how to give and take; you’re willing to bend and flex, but not break; you’ll carefully consider a prospect’s requests and are not afraid to make a few of your own.
In the play zone, you might respond to a prospect who is pressuring you for a price reduction with one of the following:
• Joe, it sounds like you’re concerned about getting the best possible value, is that a fair statement?
• Bruce, given the price concerns that you’ve expressed, would a more flexible payment plan be of any help to you?
• Sue, if I take that offer, will you agree to (name a concession)?
A Japanese proverb says, “Be hard like water.” This is the key in win-win negotiations. Develop the situational fluency to negotiate without giving up more than you have to and without losing the deal.
Whether negotiating a delivery date, a price, or a contract, the principles are the same. In all cases you search for an agreement in which both you and the buyer walk away winners.