All small business owners want to win that big contract that will help thrust sales figures into the stratosphere. Before you land that big contract, or any contract, there will be discussion. And during discussions with your potential client, you must come to agreements on many issues. That is the art of negotiation.
While the price of your services or products may be a priority on the table, you may also discuss timeliness of your services, gross amounts and frequency of your products, quality standards, the method of delivery, etc. Indeed, wise negotiation is a must.
To help you and your small business sales team win at negotiation, we have put together the following 5 winning negotiation tips:
Avoid the Label “Adversary”
First of all, avoid going into a negotiation with any idea of being adversarial with your potential client. Many foolish business owners feel that over-confidence, bravado, and machismo are required to compete and “win” a negotiation. Nothing could be farther from the truth.
Remember, both you and your potential client are there to benefit. You want to make sales or contract a vendor for your business. The other wants the same thing. Ultimately, the fruits of your negotiations should result in more profit for each of you. So come into the negotiation process with the “win-win” mindset, rather than a competitive “win-lose”.
Listen More – Speak Less
This artful strategy helps you and your sales team pick up on what your potential client really wants. Listen to the words that the people across the table are saying. They may be telling you one thing, but by carefully listening, you can pick up on the underlying desire.
For instance, your potential client may be saying, “I want only your best quality products with little or no defects.” What they may actually be saying is that they do not have the staff to handle customer complaints or tech support. This may be an opportunity for you to not only assure quality, but offer to have a dedicated phone/email support for their customers who need help with your products.
Put Yourself In Their Shoes
Don’t come to the negotiating table with just your wishes and desires for a perfect outcome. It helps to know how your potential partner may be feeling, and see the negotiation from their point of view. Sure, you may want the most money you can get. However, by researching your potential client, you could find that they keep long relationships with their vendors. A long-time client could be better for you than demanding too much money in the short term.
While in active negotiation talks, always acknowledge their point. A negotiation issue may seem trivial to you, but by looking at it from their perspective, you may see the validity of their stance.
In negotiations, the adage, “he who speaks first, loses,” certainly hold true.
Always be Truthful
There is no point in lying to get what you want out of a negotiation. Say for instance your potential client asks if you have guarantees of raw materials from your own supplier. However, in actuality, you know that your supplier is currently filing for bankruptcy, and you are actively in search for new resources. Don’t make your client believe that you have a solid supplier. Be truthful and let them know your position, but assure them that you have plenty of alternative resources available, and be ready to back it up.
Be Ready To Walk Away
There are times to accept less than what you desired before negotiation began, and times to simply walk away. Certainly, in some cases you may profit less than you had hoped or have to give extra concessions to win a contract, but in the end you still profit. In these cases, consider an acceptance if you firmly believe the contract will ultimately benefit your small business.
However, if after active back-and-forth talks, you determine that ultimately your business will lose money on the deal, or you have to hire too many extra employees that ultimately costs you more than your slim profit margin, remember that it is acceptable to thank the potential client for the talks, but the contract terms simply aren’t in your company’s best interest. This is still a “win” for your business by keeping your values and business goals in mind.