When you are looking to purchase something or are trying to sell something, it is important to possess strong negotiation skills. Not everyone is good at negotiating — many are intimidated by “confrontation” or “conflict”, and perceive negotiation to be along those lines. For those who do not like to negotiate, but find themselves frequently in situations that require basic negotiation skills (i.e. buying a car), here are some ideas to help you overcome your fears and become a successful negotiator:
Know the product/service value. Regardless of what you are purchasing, know the inherent value of the product or service prior to entering into negotiations for purchase. Understanding the value is critical to effective negotiation, as you can better determine how much the seller will negotiate on their product/service.
Also, don’t forget the sentimental value of an item to a seller. This can weigh into the purchase price of an unobjective seller.
Understand your seller and their motivation. Research the seller and their motivation for wanting to negotiate with you on a product/service. Know all you can about the seller, their company, their product/service offerings, etc before you begin negotiations with them. This gives you the advantage in positioning over the seller because you will have done your homework.
Research purchase prices of similar items. Before you begin negotiating with a seller, make sure you are aware of the competition’s price point and marketplace vantage point. This will give you leverage in either direction as you work with the seller to come to an agreeable purchase price for the product/service you are trying to buy.
Know in advance what you will spend. Part of your research should include price shopping. Know the acceptable rates for which something will sell, and pre-determine how much you will spend on a product or service. While in the negotiation phase, it is easy to be swayed from what you determine you will pay for an item or service-make sure you stick to what your budget dictates.
Poker face-don’t show your hand. Even if what you are about to purchase is the biggest dream of your life, do not show your hand. Don’t let the seller know how excited you are, or you could lose your vantage point as the buyer. The seemingly disinterested buyer is much more valuable to the seller than the over-eager one. If you seem disinterested, or use the “take it or leave it” approach, you will gain significant ground toward purchasing the product or service at the price point you want without compromising the integrity of the sale or the value of the product or service you are purchasing.
Be willing to walk away. If the seller is not really motivated, they will not budge on price or time-frame or some other aspect of the sale. The strongest point you can make in negotiating a product/service is your willingness to walk away from the sale. If you stick to your pre-purchase decisions, and don’t allow the seller to sway you from what you know you can handle financially, it is easier to walk away.
Go into the negotiation with the attitude that you will walk away from the product/service being sold AT THIS TIME. This does not mean you have to wait indefinitely-it may simply mean that you need to find a different seller in order to purchase the product you want.
When you are looking to sell something, it is important to possess strong negotiation skills. Not everyone is good at negotiating-many are intimidated. For those who do not like to negotiate, but find themselves frequently in situations that require basic negotiation sales skills (i.e. selling a car, or a home), here are some ideas to help you overcome your fears and become a successful negotiator:
Understand your product/service value. Before you try to sell anything, it is critical that you know and understand your product line and its inherent value to your customers and prospects. Interview current and previous customers to determine the marketplace viewpoint of your product/service.
Your previous customers will give you quite a bit of ammunition for fending off your competitors’ products and services, as they will be able to tell you your weak points and your competitors’ strong points (in their eyes). You have to be open-minded and willing to accept the criticism, and use that criticism to develop stronger value for your product/service line in order to gain the advantage in selling to potential customers.
Know your competition. Research and study your competition. Know what they are selling and how it is working for them. Understand their price points and their perceived advantages to your prospect base. Also-know that some of your current customers are likely shopping around. Keeping your competition in your hip pocket will help you continue to develop products and services that provide value to your customers, and will keep you strong at the negotiating table.
Know your sales strategy. How will you sell your products and services effectively? Know your strategy before you begin negotiating. You don’t know how well your purchasers will have done their homework in advance, so have backup plans for your backup plans. Make sure you put your strategy to paper and put it into action with each opportunity to negotiate a sale. The better and stronger your strategy for selling your products/services, the better positioned you will be to come out ahead when negotiating with a prospect.
Understand your buyer and their motivation. Know your niche market so well that you understand a buyer’s motivation before they come to you. Each buyer will be different in what motivates them to buy-but based on past experience in selling your product or service, you will have a general idea of their motivation. Ask key questions to further draw that out, and make sure you pay close attention to how they answer your questions. Their answers will always determine your next steps in the negotiation process.
Don’t talk price-talk value. The buyer may bring up price right away. You need to talk value. Make sure you point out the value of your services/products without mentioning price, especially if you are a price leader. It is very important that the customer understand the value of your products/services if you intend to negotiate to the point of sale.
Whether you are a buyer or seller, you view the ultimate sales transaction from a different vantage point. Oddly enough, both are trying to achieve the same end result-purchase of a product or service that will fulfill the needs of both the buyer and the seller. Remember that the key to a successful sale is in the negotiation. The better negotiator you are, the better your chances for a good purchase or sale, and both parties will walk away from the transaction feeling good about the outcome. Good luck!