If you have ever visited a tourist destination in Africa or the Middle East you will probably have been treated to their little game of haggling; the one where they name a ridiculously high price, you name a ridiculously low one and you both know that you will meet somewhere in the middle.
It’s a good piece of holiday fun – Monty Python continued the fun in this scene in The Life of Brian. Some B2C companies still use it to good effect but in the tough world of B2B selling, it really isn’t enjoyable.
There are people out there who are good hagglers – they are in the minority, most people feel uncomfortable with it and frankly would rather just reach a conclusion.
Negotiation on the other and is well suited to the less abrasive or quieter sales person – and lets face it – we are all salespeople.
Negotiation is about reaching a happy outcome for both (or all parties), it is all about considering variables and values.
In any B2B deal, each party will have a series of variables (the shopping list), and these will have different values (the currency), the gentle and warm art of negotiation is getting the best value from each party’s currency.
The immediate shopping list might include lead times, distribution, colours, payment terms, order quantities and of course, price.
Hence the client might be constrained on payment terms but completely relaxed on colour and desperate for quick delivery – you might have a warehouse full of pink ones that you are keen to move on as long as he commits to repeating his order through the year at full price. (A simplistic but not unique scenario)
In reality it goes wider than that – with open negotiation, you literally don’t know what you will end up with – your anticipation might have been to sell for £50,000 offering 30 day terms, but you could walk out with £30k transferred immediately to your bank, a family holiday in the Seychelles and a used Ferrari.*
* Only if you are the business owner – for the most part employers don’t take kindly to this degree of negotiation.
In the world of start-ups I often use negotiation to overcome limited resources, a simple recent case involved a web developer who was severely constricted by working from home. He was offered a contract at a rate of pay which didn’t meet his expectation. However the client has significant office premises and administrative resource – and would be a great testimonial. The developer took the contract but was able to build his brand and image from a properly managed address beyond the duration of the contract.
Cost to customer – negligible, value to developer high.
Proper, gentle negotiation works extremely well for reluctant sales people because:
– It is about getting a happy outcome for both parties.
– It is about listening, not shouting.
– It is a long game, not a quick result.
Try it, see how it feels!