Selling & Negotiation

7/31/2019 Selling & Negotiation.

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NEGOTIATION SKILLS

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Why Negotiate?

Gavin Kennedy in his book The NewNegotiating Edge says..

Animals do not negotiate. They use violence or the threat of

violence to get what they want, whether it be food, a mate orterritory.

Have you ever seen 2 dogs negotiate over a bone?

Trade is the human foundation of human civilisation. It is whatmakes humans different from animals.

Negotiation is anathema to tyrants, who usually wantsomething for nothing and do not recognise a need for anotherpersons voluntary consent before they get what they want


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Negotiation What is it?

The process bywhich we search forthe terms to obtainwhat we want fromsomebody whowants somethingfrom us

Gavin Kennedy

Confer with others toreach a compromise oragreement.

Concise Oxford Dictionary

To negotiateis to tradesomething wehave forsomething wewant.

Anon

Negotiation is an

explicit voluntarytraded exchangebetween people whowant something fromeach other

Gavin Kennedy


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WHAT IS NEGOTIATION ?

The word "negotiation" originated from the Latin expression,"negotiatus", which means "to carry on business".

The process of conferring to arrive at an agreement between

different parties, each with their own interests andpreferences.

A give-and-take decision-making process

involving interdependent parties with differentpreferences.

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When do we Negotiate?

When we need someones consent

When the outcome is uncertain

Deals with suppliers

Internal Discussion

Stakeholder group

Recruiting new people


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WHYDOWE NEGOTIATE

Achieving better outcome

Resolving differences in opinion

More enduring relationship

Reducing cost & overheads To reach an agreement

To beat the opposition

To compromise

To settle an argument

To make a point


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SOMESKILLS

Creating climate

Asking questions

Active listening

Discipline Flexibility


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TYPES OF NEGOTIATION

Distributive Negotiation

Integrative Negotiation


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2ND TYPE: INTEGRATIVE NEGOTIATION In Integrative Negotiation, parties cooperate to achieve maximize

benefits by integrating their interests into an agreement. This isalso known as a win-win negotiation.

The key questions is: How can the resource best beutilized?

Integrative negotiations tend to occur in following situations:

Structuring of complex long-term Strategic Relationships orother collaborations.

When the deal involves many financial and non-financialterms.

In an integrative negotiation,, there are many items and issues tobe negotiated, and the goal of each side is to create as muchvalue as possible for itself and the other side.


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DIFFERENCE

Characteristics Distributive Integrative

Outcome Win Lose Win win

Motivation Individual gain Joint & individual gain

Interest Opposed Different but not alwaysopposed

Relationship Short term Long term generally

Issues Involved Single Multiple

Solution Not creative Creative


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NEGOTIATION PROCESS

PREPARATION

INFORMATION SHARING

BARGAINING

FINALIZING THE DEAL


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PREPARATION

1. Firstly understand what it is you want?2. What do you think your opponent wants?

3. What would happen if you didnt do a deal?

4. Do you know your stakeholders?

5. Do you know who the decision maker is? Are younegotiating with them? If not what affect does that have?

6. Are there concessions you can build into the negotiation?

7. Know your product / service inside out? What standards arethere in the market place?

8. Know your price points?

9. What issues do you think youll need to overcome?

10. Prioritize!

11. Practice!


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INFORMATIONSHARING

1. Company activities and market position

2. Opinion on entry points

3. What elements are clearly off the table or not up fordiscussion and why

4. Opponents attitude and commitment

5. Motivational factors (I want this price because)

6. Stakeholders and importantly decision makers

7. Problems, issues or risk8. An order/structure for proceedings


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BARGAINING

Bargaining has two basic parts

Debating

Proposing


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DEBATING

To be successful in negotiation you must build relationshipsand trust

You need to avoid the following- Point scoringYour company is always late with deliveries so Im

not paying that! InsultsIf you insist on that price you must be stupid ProvocationKeep talking like that and see where it gets you! ThreatsYou just wait until your other customers hear about this

Instead try- Building a relationship It will make your negotiation much easier Sticking to an agreed agenda This will help avoid destructive

discussions. Share information and ask questions What do you want what

do they want Try and be positive and listen What do they want and why look

for areas of win/win or easy compromise.


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PROPOSING

When proposing your offer consider

Consider both your entry and exit This could include all orsome of your wants, and your opponents entry and exit points

Consider how you will phrase yourproposal

Consider what will motivate your opponent into makingthe deal

Consider the likely responseThink about the if I do thatthen they will do that

Are there alternative proposals? Once an initial responsehas been made are you happy or do you need to offer upsomething new.

Remember the key thing is to proposedont argue and tryand remain realistic, and invite a response from your

opponent.


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FINALIZING THE DEAL

So when closing the deal consider

Do you have what you want?

Do they have what they want?

Can you signify to your opponent that if certain terms were met

the deal could be done. Do you both understand the potential non deal by not closing

or reaching agreement?

Document the agreement quickly and share it with youropponent and get agreement on the details of the deal.

Do not offer further concessions!

Agree the measures that will be applied to record fulfilment ofthe deal.


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BATNA

BATNA is an acronym for:

Best

AlternativeToa

NegotiatedAgreement


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WHY BATNAS MATTER

BATNAs tell you when to accept and when to rejectan agreement

When a proposal is better than your BATNA: ACCEPT IT

When a proposal is worse than your BATNA: REJECT IT


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BATNA

Best Alternative to a Negotiated Agreement

Develop your BATNA

- List your alternatives

- Evaluate your alternatives

- Establish your best as your BATNA

Consider their BATNAHave a Reservation Point the least you will accept

List their alternatives their BATNA

EXAMPLE


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Example:[Showroom salesman

V/s customers]

A persons go for car purchase.[To negotiate with showroom sales man for lesser

price]

The car owner is not agreeing forthe lesser price.

Than customer can ask for Radialtires[best alternative] with anyincrease in price further.

BATNA EXAMPLE

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Selling & Negotiation