The Negotiation Begins Immediately

When do most of your sales negotiations begin? If you think the negotiation phase of the sale only happens after the customer has decided in principle to buy your offering, you may be leaving a lot of money on the table.

I’d like to illustrate my point by describing a scenario unrelated to negotiating. I teach a module on listening skills, and the first thing I do is put students through a listening exercise to show them that they’re not as good as they think they are. I tell them that I will give describe a situation and then test them at the end of it. They are free to take notes or do whatever they want to make sure they don’t miss anything. Then I begin by saying, “You are the driver of the Main Street bus. At the first stop, three blue-eyed people get on the bus…” I go through several iterations involving various numbers of people with different colored eyes, and it’s funny to watch people listening intently and writing down numbers, because at the end I ask them the one question: “What color are the eyes of the bus driver?”

It’s rare for more than 10-20% of the participants to get the answer right. Most people miss the first and most important word in the scenario, because they are so intent on paying attention to what they think is important.

The same thing applies to sales negotiations. Literally everything you and your customer do and say from the first contact may make a difference in how the negotiation goes:

First impressions count for a lot, and the small talk before you get down to business can have a disproportionate impact on the rest of the relationship. If you establish a personal rapport with the other person, it can set the tone for a collaborative rather than competitive spirit during the actual bargaining phase later on.  Subtle signals such as your confidence on the first meeting may influence their relative confidence.

In the unguarded moments during the small talk before you get down to business, little tidbits of information may slip out and influence perceptions and positions. They—or you—may say something that tells the other party about their hidden motivations, likes and dislikes, or time constraints. When I was a banker, I used to pay close attention to anything the other person said about their background, (where they were from, work background, etc.) and then compare those details to written information the borrower would provide. Even minor discrepancies were worth following up on.

Also, because reciprocity is so important to persuasive communication, you want to look for opportunities to give our counterpart little gifts early during the process, even if those “gifts” are bits of information. If they give you something in return, that’s great; if they don’t, that’s useful to know.

Your early questions can often be your most productive; because your counterpart may also think the negotiation does not begin until later, they may be more unguarded in their comments and answers early. For example, I like to talk about how they are positioned relative to their competitors. If they brag about how they get a premium because they compete on quality (and most of them do), that’s a good tidbit to file away for later when they tell you that you have to sharpen your pencil if you want to get the deal.

Questions that get the other person to quantify the cost or impact of their current challenges can be used to establish value in the earlier stages. It’s usually easier to grow the pie before you get to the phase where everyone is concerned with the size of their slice. Those types of questions can also be used to involve as many problem owners as possible. The more possible impacts your solution can have on their business, the more people will potentially benefit. You’ll want to talk to as many as possible so that you can a) have more allies and internal champions and b) accumulate more value for your solution.

Pay close attention to the questions they ask you, for indications of what is most important to them. Their questions may also provide a clue about which of your competitors they are talking to.

During the early stages, you should also overcome your natural reluctance to hear objections, and actively seek them out. Some objections that can be easily overcome in the early stages may assume artificial importance and become major sticking points during the bargaining process.

All of these precautions may seem like so much paranoia, but just remember that experienced buyers know how to use early moments to shape the negotiation in their favor. I know of one who used to brag that simply making sure he had the competitor’s coffee mug on his desk when a salesperson walked in was worth at least a 10% discount!

As Dave Brock says, “Deals are won or lost in the discovery phase of the sales/buying process.” Events, interactions and information that surface early carry much more weight than those that come out at the end.

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