Negotiation Skills

T R A I N I N G

NEGOTIATION SKILLS

Objectives

At the end of this training, you will be able to

Determine the importance of negotiation in the sales process

Identify key steps to take at every point in the negotiation process

Determine how to use various negotiation strategies to achieve results

Use effective communication to achieve good negotiation outcomes.

Content

What is Negotiation?

Negotiating with Prospects and Customers

Negotiation Strategies

Communication Skills

What is Negotiation?

What is negotiation?

Simply put...

the process of getting what you want from another person.

The truth is we negotiate every day, everyone in their every day lives is a negotiator.

Children negotiate with their parents for things they want.

Spouses negotiate with each other over things they should buy or do this weekend eg. go to the funeral, the wedding or take the children to their friend’s party?

Subordinates negotiate with their bosses over deadlines.

Workers negotiate with their clients over services they can offer them.

Why negotiate

Negotiations occur for several reasons:

To convince people to take your side of an issue

To agree on how to share or divide a limited resource

To resolve a problem or dispute between the parties

To sell a product or service

Sales negotiation

Sales negotiation

Sales negotiation can be a formal event at a specific time and date or it can be ongoing at different points in the sales process.

As a sales staff you are seeking a mutually beneficial relationship with your prospects and clients, not something that benefits only you or them.

Why do you need to negotiate with customers in the

first place?

Because of Customer Attitudes

A customer’s attitude toward your product or service generally falls into one of four categories.....

Objection

Indifference

Skepticism

Acceptance

Customer Attitudes

Acceptance : Customer

agrees with your benefits

and has no negative

feelings toward your product

Skepticism :Customer is

interested in a particular

benefit, but doubts

whether your product can

really provide the benefit

Objection : Customer displays

opposition to your product

Indifference:

Customer shows a lack of interest in your

product because of no

perceived need for its benefits

S0 why do you need negotiation skills?...

To be able to change customer attitudes towards your products and services;

Bottom line• ....... To win more Customers and improve profits for

your organisation.

Negotiating with Prospects and Customers

Negotiating with prospects and customers

Negotiation with prospects and customers must be undertaken within the context of the sales process.

Where inadequate prospecting, pre sales preparation and planning is done, negotiation is likely to be unsuccessful.

So what does the sales process entail?

Overview of the sales process

1. Prospecting and qualifying

2. Planning the sales call: The pre approach

3. Approaching the prospect

4. Sales presentation and demonstration

5. Negotiating resistance and objections

6. Confirming and closing the sale

7. Following up and providing after sales service

Overview of the sales process

Negotiation with the prospect usually begins after you have had the opportunity to present your products and services or after step 4 in the sales process.

At this point, you will be able to gauge whether the prospect objects

is indifferent

is skeptical or

accepts your product or service

Based on your assessment of the situation, you can then begin to negotiate.

Avoid negotiating unless you have had an opportunity to fully present your products and services

Understand the objections raised by your prospect and identify what your prospect or customer’s main points of interest may be based on these objections

Be prepared to illustrate how your offering will benefit them and quantify the value they will get (if possible)

Be prepared to be patient (which can lead to higher trust between you and your prospect)

Be confident in the value your product or service will provide your prospect

Be prepared to work toward a solution that works for both you and your prospect

Know in advance at what point the negotiation is no longer beneficial to you and your organisation and be prepared to walk away

Before negotiation begins...


Use open ended questions to confirm your understanding of their needs.

Be prepared for tactical responses from prospects and customers –such as exclamations after you explain the terms of your service (eh, aba! etc) or silence – don’t react and instead respond with more questions

Don’t rush to fill pauses with more talk – be comfortable with moments of silence

Listen

Be prepared to make slight adjustments for your prospect if possible eg. Adjust the product/service offering, loan payment terms etc.

Try to identify small things you have both agreed on to help develop positive momentum –summarize these agreements periodically

During negotiation...


If you are able to make a sale…

Summarize verbally and/or in writing the details of what you and the customer have agreed on as the terms of the service.

Thank the customer/ prospect for their time and reinforce the purchase decision

For your next negotiation, review the points that seemed to help move the negotiation process forward –study them, know them, use them

If you did not make a sale…

Sincerely thank the prospect for their time

Avoid appearing annoyed or disappointed

Give the prospect an “out” or an opening for them to come back to you/your organisation in the future (have this statement prepared)

For your next negotiation, review the points that seemed to prevent the negotiation process from moving forward – study them, know them, and act accordingly

After the negotiation...


Handling objections and resistance

Objections can be defined as statements, questions, or actions by the prospect that indicate resistance or an unwillingness to buy . . . at least yet

Without sales resistance, there wouldn't be any need for salespeople

The first person who reached the prospect would make the sale

Serious negotiations seldom begin until the prospect's objections surface


Prospects and customers raise objections for a myriad of reasons

• Some people will almost always raise objections, even if they really need the product/service

• They may be people who naturally raise objections as a matter of buying technique or negotiation strategy

• The prospect may seek reassurance that the product/service will perform or yield the benefits promised

• A few prospects will raise objections merely to irritate you the salesperson


• Some prospects raise objections so that they can bargain for a better deal. Irrespective of how good your terms may be compared to the competition, some prospects are obsessed with getting an even better deal so that they can feel “victorious.”

• Prospects may raise an objection because they have a bias against the your organization or type of service or, in rare cases, simply dislike you the salesperson.


Identifying and negotiating the prospect's most important or key objection is the first step to negotiating total prospect resistance.

One subtle way is by engaging the prospect in informal conversation before the sales presentation and encouraging him or her to reveal personal concerns and perspectives on problems

Which other ways can you think of?

Negotiation outcomes

PROSPECT

SA

LE

S P

ER

SO

N

Win Lose

Win Both the prospect and the sales person are satisfied with the terms of the sale and a good business relationship develops

The salesperson is satisfied with the sale but the prospect is not. He may even feel manipulated or taken advantage of. The business relationship is in trouble

Lose The prospect is satisfied with the sale but the sales person feels manipulated and may reciprocate in future negotiations or reduce customer service. The business relationship is in trouble.

Both parties are dissatisfied with the sale thus the bond of trust between them may be so damaged that they are unlikely to enter into any future business relationship.

Common mistakes to be avoided in negotiation

Inadequate preparation

Use of intimidating behavior

Impatience

Loss of temper

Talking too much, listening too little, and remaining indifferent to body language.

Arguing instead of influencing.



There are various well tested strategies that can be used to achieve a win-win outcome, such as those used by Akosuaand Ebo as outlined in this section.

Akosua and Ebo decide to visit a well known business area to win new clients for their institution.

Their first stop is an office located in the area with a lot of staff who are ideal potential clients. Akosua and Ebo intend to introduce their services to them, get them to be interested in the services to the point where they will actually sign on for a service such as open an account and/or take a loan.


Strategy Approach

Vinegar – Honey

Start with the cheapest possible

product or service but one

which still has benefits for the

prospect.

Akosua approaches one of her

prospects and informs him that

he can access a loan with very

little effort – she goes ahead to

explain the procedure for

obtaining a loan from her

organization.

Practice with the cheapest

product/service on your listing.


Strategy Approach

Pinpoint the need

Focus on the need ie. Why a loan

will be beneficial to the prospect

and enumerate the benefits s/he

would derive from the loan.

Akosua’s prospect appears

skeptical about the process and

indicates so, stressing that he

knew people who had been made

similar promises but went

through a lot of stress to obtain

loans.

She ignores his comment and

begins to highlight the benefits

to be derived from such a loan.


Strategy Approach

Challenge

The prospect throws a challenge

at Akosua in an effort to win

some concessions.

The prospect goes quiet for a

while then tells Akosua that he

needs a loan of GHC 5,000 but

wants to be able to negotiate the

terms of payment because he

knows two people from his office

who got a similar deal.


Strategy Approach

Limited Authority

Limited authority is an attempt to

postpone the decision on a

pretext to get approval from a

competent authority. Whereas the

real aim is to gain time for

reconsideration, and/or keeping

the prospect still interested in the

service for a reasonable period of

time until a win-win situation is

achieved.

Akosua says, ‘those two people

you are referring to took huge

loans and so were given the

opportunity to negotiate their

terms of payment’ . But she

indicates that she will speak to

her boss about it.


Strategy Approach

Good Guy/Bad Guy

The good guy / bad guy is an

internationally used strategy. One

member of a team takes a hard line

approach while other member is

friendly and easy to deal with.

When bad guy steps out for a few

minutes, the good guy offers the deal

that under the circumstances seems too

good to refuse. Bad guys usually

comprise spouses, lawyers etc.

Based on your experience on the field, how would

you act out the good guy/bad guy

strategy to your favour?


Strategy Approach

Defer

Deferring strategy allows the

negotiators time to reevaluate

their positions. Deferring a

decision often proves that

patience pays.

Please excuse us while we discuss

ways in which we might provide

you a better offer. Would you

please reevaluate your position

too?


Keep It Light

You never want to let negotiations become too tense. Always feel free to smile and inject some humour in the conversation.

Lightening up the mood can ingratiate you with your prospect while also conveying your negotiating strength.

If you do not appear to be taking the negotiation as a do or die affair, your prospect may conclude that you are ready to move on if s/he does not cooperate and based on that s/he may decide to be cooperative.



Communication skills are crucial in the kind of negotiations you engage in as field staff. Good communication is the cornerstone of any productive negotiation. Particularly important are

Oral communication and

Non-verbal communication

It is also important that as field staff you are aware of critical cultural norms that exist within your area of operations. Fortunately, the Ghanaian culture does not vary too much from one place

to another

Oral Communication

Oral communication implies communication through the mouth. It not only refers to speaking but includes the ability to listen as well.

Specific examples of oral communication include:

Face to face communication in conversation, be it direct or telephone conversation, meetings, interviews, speeches, presentations, discussions etc.

Oral communication is significant in building rapport and trust with customers.

Oral Communication

When communicating with your prospects and customers

Slow down your speech and pronounce your words clearly and correctly.

Vary your pitch, tone and volume to emphasize key words or sentences.

Adjust the volume of your voice to your audience

speak softly but audibly when you are talking one-on-one

speak louder when you are talking to a larger group or across a room

Be conscious of your speech to avoid filler words such as um, uh, ah, like, well etc.

Oral Communication

Organize your thoughts and ideas before speaking (e.g. write notes on what you want to say).

Do not interrupt when someone else is speaking.

Respond non-verbally to show understanding and interest when communicating

nodding your head, smiling etc.

Make eye contact when listening or talking to people.

Be specific when asking questions and giving answers.

Take notes if necessary to help you remember what is being communicated.

Oral Communication

Phrase your words properly; it makes a difference.

Two priests were so addicted to smoking that they desperately needed to puff on cigarettes even when they prayed. Both decided to ask their superior for permission to smoke.

The first asked if it was okay to smoke while praying? Permission was denied.

The second priest asked if he was allowed to pray while he was smoking. His superior found his dedication admirable and immediately granted his request.

Listening: a strong negotiation tool!

Perhaps the best strategy to adopt while the other side lets off steam is to listen quietly without responding to their attacks.

You often get more through listening by finding out what the other person wants than you do by clever arguments supporting what you need.

Generally, good techniques of good listening include paying close attention to what is said, asking the other party to spell out carefully and clearly exactly what

they mean, requesting that ideas be repeated if there is any ambiguity or

uncertainty.


When we do not know others, their body language remains the first source of building image about them.

What people say may be reinforced or contradicted by the non-verbal cues.

When there is no consistency between the verbal and non-verbal communication, people rely on the non-verbal aspect of communication to determine the true meaning of what is being said.

Non-verbal Communication

VibesSymbolic

How something is said instead of what is said i.e.

volume, rate and rhythm, silent pauses, sighs

etc.

Facial expressions, body gestures, dress etc.

KinesicsParalanguage

Feelings and emotions received

from others through their body actions


Body Language What it could mean

Avoiding eye contact Lack of confidence in bargaining position

Making excessive eye contact Trying to bully or intimidate

Fiddling with objects such as hair, pencils, or papers

Lack of confidence

Crossing and uncrossing the legs Impatient

Keeping legs and arms crossed Not receptive

Cultural norms

Some general Ghanaian norms include:

Not using the left hand in communicating with others either to give something to someone or point in a direction etc.

Greeting the people we meet wherever we go

What are some of the cultural norms

in your area of operation?

The Ball is in Your Court…

Go on and practice these negotiation strategies to become effective sales people!!!

Documents

Negotiation Skills