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COACHESCORNER

STUMPED?

Your sales team may be making negotiations harder than they have to be

by Brian Dietmeyer

Negotiating a sale has been made more complex than it needs to be and that’s far worse than confusing, it’s disempowering.

What keeps any deal afloat or makes it sink isn’t pulling one perfect response out of an arsenal of a dozen, two dozen or 200 negotiation tactics. Whether you’re haggling over the price of a flea market watch or trying to win a global, multimillion dollar deal, every negotiation hinges on only two elements:

1. The Consequences of No Agreement (CNA) – Simply stated, what is the outcome if the two sides reach an impasse? What will the client do without you? Have they accurately analyzed their alternatives? Are they comparing apples to apples or apples to orangutans?

2. Trades – What are the total terms of the deal?

The Power of Two Questions

When I joined Think! Inc., the negotiation strategy firm for which I am now president, I wasn’t genuinely convinced that negotiation could be boiled down to two simple elements. Every now and then, I would seek the counsel of Think!’s founder, Max Bazerman, Vice Chairman of Harvard Law School’s Research Program on Negotiation. His phone would ring andI would be on the other end.

“I’ve got a new client trying to do a $30 million dollar deal,” I would announce breathlessly. “It’s a very complex, global negotiation…we’ve hit a snag!”

“What will happen to both sides if they don’t agree? How is your client’s offer better?” Bazerman would patiently respond. “And what are the terms of the deal that will fund your solution, in rank order?”

Every time I called, I received the same response: What will happen if they walk away from the deal and what are they willing to trade to move it forward? With that information, we could easily figure out a solution to get the deal done.

Eventually, I quit calling because I finally realized that negotiation wasn’t complex – Bazerman’s formula was brilliantly simple. I had everything I needed to structure and respond intelligently to the most challenging negotiation by:

• Making a proper diagnosis – knowing precisely what would happen to both sides if the deal fell apart.

• Putting a solution on the table better than that diagnosis,

• Knowing what both sides were willing to trade to fund the solution and close the deal.

Mind The Gap

Here’s the rub: to make this optimally effective, you must think through nearly every aspect of what you potentially have to offer, what the competition has to offer, and the gap between the two – what you have that the competition doesn’t. Then, you have to think through what each side is willing to trade to close the deal. (Prospects rarely analyze any of this, which gives you the advantage.)

In essence, prospects try to boil down both the consequences of no agreement and trades to the lowest common denominator – price. The salesperson’s goal is to expand the discussion.

When a hard-bargainer counters with the “I can get it for 20 percent less” zinger, he probably doesn’t know what he’s talking about. It’s up to your salesperson to enlighten him by showing him the gap between what the competitor is offering and what your rep is offering, and reviewing the trades – the terms of the deal – to explore precisely what they’re investing to get the value that you have to offer. In the process, both likely will discover that 20 percent cost savings comes at a price, making your value proposition more desirable than ever.
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Brian Dietmeyer is President of Think! Inc. (www.e-thinkinc.com), a Chicago-based consultancy
specializing in sales negotiation.

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