Salesopedia - Negotiation – Strategy or Skill?

Negotiation – Strategy or Skill?

Written by Julie Thomas

When it comes to a successful negotiation, which is more important: strategy or skill? The definition of the verb, negotiate, is simply to deal or bargain with another or others, as in the preparation of a treaty or contract or in preliminaries to a business deal. In the context of business and in particular sales, the key elements here have to do with bargaining in order to create or culminate a business deal.

As sales professionals, we are often negotiating with both prospects and clients. We bargain with prospects for access to key decision makers, we bargain internally for additional resources. We make tradeoffs with ourselves in an effort to improve productivity and improve time management. And we negotiate the final terms and conditions of new contracts in order to close business.

At ValueSelling Associates, I am often asked to help our clients better negotiate. We have found that there are consistent traps that become extremely problematic for sales executives.

Timing: There are often times when companies will offer incentives to customers in order to create urgency and incent prospects to convert to customers sooner rather than later. These incentives may manifest in pre-announced price increases, introductory offers, or embellished deliverables. Whatever the incentive, how they are communicated to prospects and when they are offered to prospects becomes critical.

It is very important not to negotiate before the client is a fully qualified opportunity. In the ValueSelling Framework™, the qualification process is multidimensional. There are four questions that the sales executives should help the prospect answer – these are the dimensions of qualification;

        •    Should I buy this?
        •    Is this worth it?
        •    Can I buy this?
        •    Am I convinced?

Offering incentives to a prospect before the qualification is confirmed will diminish your credibility as a sales professional and potentially de-value your offerings in the prospect’s mind.

Empowerment: As a sales professional are you aware of the parameters that you can negotiate on? Every organization has a tolerance for what will be considered fair game during the course of any negotiation. To be a successful negotiator, it is critical that we each understand what we have the authority to include in negotiations with our prospects.

I break the elements of any negotiation into three different categories:

        •    Deliverables
        •    Terms and Conditions
        •    Price

While many prospects will attempt to focus the negotiating conversation solely on price, there is much more that a savvy sales professional can introduce into the discussion. Are you aware of your empowerment in the context of an upcoming negotiation? Are you aware of how you can use your sales manager – and his or her empowerment in an upcoming negotiation? If not, now is a good time to find out.

I have witnessed sales professionals over commit to prospects and then have to go back and change a verbal agreement they made that could not be honored. What an embarrassing and uncomfortable situation. By understanding these parameters before the negotiation, you will avoid this scenario!

Is negotiating strategy or skill? I believe it is both. Successful negotiators have a plan, leverage the knowledge they have and are very purposeful in their negotiations with prospects. They also have developed the skill to execute.

Julie Thomas
		About the author:
		Julie Thomas is President and CEO of ValueSelling Associates . ValueSelling Associates is a worldwide leader in competency and process-based sales training. The company offers proven strategies for seasoned sales executives, as well as sales professionals just starting out through its proprietary ValueSelling Framework™ and Victory!® online training series. A noted public speaker, author, and consultant, Julie is also a member of The Strategic Account Management Association (SAMA) and eWomenNetwork.com. Her new book “ValueSelling Driving up Sales One Conversation at a Time” was published in November, 2006. Julie can be reached at (858) 759-7954 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .
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