Negotiations can be a critical part of business. A successful negotiation can help convince indecisive clients to take deals that benefit both them and your company; however, negotiations can also intimidate potential customers and cause them to back out of deals, even when they are in their best interest. With this in mind, I have developed these six negotiation strategies that can help put customers at ease and win their business.
The 1-10 Strategy
At the end of your sales pitch or presentation, consider asking your customers to rank themselves from one to 10 on how prepared they are to proceed with your offer.
If the number is above five, respond with, “Your number is higher than I expected for this stage of our conversation. Can you tell me why you picked such a high number?” I’ve found that this question is key. Now, your potential customers may put forth their arguments for why they should work with you. Next ask, “What else do you need to know to make a decision?” Their answer may reveal what final steps are needed to gain their business.
Should their number be less than five, consider asking what more you can address to ensure that they are confident with their choice.
If they say 10, you can invite them to take action and proceed.
Not only can the 1-10 strategy potentially assist you in identifying your clients’ needs, but it can also help guide them to convince themselves to work with you.
Decisive Action Reward
During negotiations, businesses will sometimes offer incentives to clients who decide to proceed with a deal immediately. This decisive action reward makes perfect sense. If a client decides to postpone a decision, they may never make one. This can leave you in a state of limbo, unsure if you should continue with negotiations or turn your attention to other customers.
By offering your customers a 10 to 20 percent discount for making their decision within the first 24 hours of your proposal, you may move your negotiations forward more efficiently and reward your customers for their decisiveness.
A successful negotiation can help convince indecisive clients to take deals that benefit both them and your company.
But you can offer more than just financial rewards. In fact, other rewards may be a better incentive for your prospect, and more economical for you. Consider offering bonus items, information or experience. For example, a car dealer may offer a bonus item of free car mats if the prospect buys today. An accountant may offer access to a private webinar on new tax law for clients who engage their services today.
Yes-No Negotiation
Another effective negotiation strategy is the yes-no negotiation.
Before starting phone calls with customers, consider asking them if they want to be in the position to say yes or no to your company by the end of the call. Are there other people who need to be included in the call? What questions will they want answered?
You can determine all of these parameters beforehand. This could help avoid wasted time on both ends and ensure that once the call is over, you may have their answer.
For example, you can say the following to a prospect at the initiation of your call: “Do you agree, for this to be the most productive call possible, that I will answer all of your questions so that you can make a yes or no decision at its conclusion?” If the customer says “no” to this, ask them what would make this the most productive call for them—their answer will reveal your prospect’s true intentions (e.g. your prospect may just be kicking tires). If they agree to a yes-no outcome, proceed with your discussion and answer all their questions. Ask during your discussion, “Is there anything else you need me to answer for you to be able to make your decision?” When there is nothing left, ask them their decision. It should be a yes or a no. But if they respond with, “I need to think about it,” you are positioned to respond by saying that “I agreed to answer all your questions so that you may make a yes or no decision. Since you are unable to make a decision, there is clearly something I still need to answer for you. What is your outstanding question(s)?” You can continue this until the customer has enough information so they can decide yes or no.
“This Is Why I Don’t Want You to Use Us”
This technique relies on reverse psychology. You can do this by outlining the reasons why your company is not a fit for everyone to your client.
To demonstrate this, pretend that I am selling you a high-end car. I tell you that if you are uncomfortable with displaying prestige and success, you might not want this car. People will recognize the iconic emblem as you drive down the street. If you are on the market for a purely utilitarian vehicle—devoid of luxury—this will not be for you.
Lay out all of the reasons why they should not buy your product and then ask your customers, based on everything you shared, if they want to proceed. Essentially, you have removed all of the obstacles for them. Now that your clients know all the arguments for why not to invest in your business, they are in a position to convince themselves why they should.
Your business, be it a luxury car sales or a spa service or an online coaching program, relies on the uniqueness of your brand. And when you are unique, some will love it (the luxury car loyalists) and some will hate it (like those who are fans of less expensive cars). Your goal in this tactic is to clearly put your prospect in your camp or out. Your online coaching may require serious time commitment, and that the prospect get comfortable with being uncomfortable—and for those reasons they may not want to work with you. Your spa service may be a monthly recurring fee, so the prospect gets into a monthly healthy regime—and for those reasons they may not want to work with you.
Agree to the Outcome Prior to Negotiating
The death to most negotiations is the painful “I need to think about it” response. In other words, you will never hear from that person again.
In addition to the Yes-No Strategy I shared above, you can also prevent this by starting the negotiation with an agreement to the outcome first. Explain to your prospect that it is important they have every answer they want to reach a decision. Continue to explain that you have found that if they “need time to think about it,” that indicates that they don’t have the information necessary to make a clear yes or no decision. To stop it from happening, ask the prospect if they agree to concluding this negotiation with a yes or no decision (like in the strategy above) or if they can share with you what their exact plan is if they aren’t able to make a yes or no decision.
Don’t Settle. Surpass.
The biggest misunderstanding of negotiations is that one or both sides will come out compromising their benefit. Some people may go in believing that they will compromise their outcome and therefore settle with a less than desirable result over what they want. This thinking positions you for a failed negotiation.
Instead, set the negotiation parameters for both sides to come out in a position that surpasses both parties’ expectations. How do you do that? Start the conversation by stating your intention for the negotiation to better both parties, and ask if your prospect agrees. If they do, you have staged the intentions to surpass what you both currently envision.
This doesn’t mean there is no compromise at all. But the tradeoff will be a better outcome than the original plan. Perhaps your prospect needs you to reduce your price, and in exchange you are able to shave off unnecessary work and increase your profitability. Maybe you require that a certain key person at your prospect is involved in the work, and in the negotiations they can’t make that person available, so you find an alternative who will bring you the answer you need, faster.
The goal of negotiations is not to have one side win and the other lose. The goal is to surpass the expectations for both sides.
Negotiating can be a daunting process to all those involved. But with these useful negotiation strategies in your back pocket, you can prepare yourself to calm your customers down and find an outcome that is to the advantage of both parties.
Author: Mike Michalowicz || Author, Profit First
