How many times have you heard:
"You've got to drop your price by 10% or we will have no choice but to go with your competition."
"You will have to make an exception to your policy if you want our business."
"I know that you have good quality and service, but so do your competitors. What we need to focus on here is your pricing."
"I agree that those special services you keep bringing up would be nice, but we simply don't have the funds to purchase them. Could you include them at no additional cost?"
Every time you hear statements like these, you're in the middle of a difficult sales negotiation. How you handle that negotiation will determine whether or not you close the sale and how profitable that sale will be. In order to give you a real edge every time, I have listed below some key points taken from my sales negotiation training seminar.
Don't Believe Everything You See and Hear
Part of a good salesperson's skill is to learn to read people and situations very quickly. However, when it gets down to negotiating, you have to take everything you see and hear with a grain of salt. Buyers are good negotiators, and thus they are good actors. You may be the only person who has what she needs, but everything she does and says, from body language to the words she uses, will be designed to lead you to believe that unless she gets an extra 10% off, she's going with the competition. Be skeptical. Be suspicious. Test, probe, and see what happens.
Don't Offer Your Bottom Line Early in the Negotiation
How many times have you been asked to "give me your best price"? Have you ever given your best price only to discover that the buyer still wanted more? You have to play the game. It's expected. If you could drop your price by 10%, start out with 0%, or 2%, or 4%. Leave yourself room to negotiate some more. Who knows - you may get it for a 2% reduction. You might have to go all the way to 10%, but often you won't. A little stubbornness pays big dividends.
Get Something in Return for Your Added Value
What if you discover that the buyer wants to be able to track his expenditures for your products or services in a way that is far more detailed and complex than is standard for your industry? What if your account tracking system is set up in a way that you can provide that information at essentially no cost to you? Often the salesperson's overwhelming temptation is to jump in and say, "Oh, we can do that. That's no problem." Before you do, however, think about your options. You could throw it in as part of the package and try to build good will. Or you could take a deep breath and try something like, "That's a difficult problem that will require some effort on our part, but it's doable."
In the second case, without committing, you've told the buyer it is possible. You may not be able to get him to pay extra for it but you may be able to use it as a bargaining chip in resisting price concessions. Which way you choose to go will depend on who your customer is and on the situation. However, you do have options.
Sell and Negotiate Simultaneously
Think of selling and negotiating as two sides of the same coin. Sometimes one side is face up, and sometimes the other side, but they are always both there. This is particularly true in your earliest contacts with the buyer. The face the buyer sees is that of a salesperson demonstrating features and benefits. The hidden face is that of a negotiator probing and seeking out information that may be invaluable later should issues like price, terms, quality, delivery, etc. have to be negotiated.
Finally, and most important, be patient. Sales is a high energy, fast moving business. Patience is one commodity that is in relatively short supply, but if you're impatient in a negotiation, you'll lose your shirt. If I'm negotiating with you and I know that you're impatient, I will hold out just a little longer, no matter how desperate I am to make a deal with you. As long as I know you're in a hurry, I'll wait.
So be patient. Take the time that you need, don't rush to give in, don't show your anxiety, stay cool and don't panic. Negotiation is a process and a game. Use the process and play the game. You'll be astonished at the difference that it makes!
By Michael Schatzki
Jumat, 11 Juli 2008
How many times have you heard:
Cross cultural negotiation is one of many specialized areas within the wider field of cross cultural communications. By taking cross cultural negotiation training, negotiators and sales personnel give themselves an advantage over competitors.
There is an argument that proposes that culture is inconsequential to cross cultural negotiation. It maintains that as long as a proposal is financially attractive it will succeed. However, this is a naïve way of approaching international business.
Let us look at a brief example of how cross cultural negotiation training can benefit the international business person:
There are two negotiators dealing with the same potential client in the Middle East. Both have identical proposals and packages. One ignores the importance of cross cultural negotiation training believing the proposal will speak for itself. The other undertakes some cross cultural training. He/she learns about the culture, values, beliefs, etiquette and approaches to business, meetings and negotiations. Nine times out of ten the latter will succeed over the rival.
This is because 1) it is likely they would have endeared themselves more to the host negotiation team and 2) they would be able to tailor their approach to the negotiations in a way that maximises the potential of a positive outcome.
Cross cultural negotiations is about more than just how foreigners close deals. It involves looking at all factors that can influence the proceedings. By way of highlighting this, a few brief examples of topics covered in cross cultural negotiation training shall be offered.
Eye Contact : In the US, UK and much of northern Europe, strong, direct eye contact conveys confidence and sincerity. In South America it is a sign of trustworthiness. However, in some cultures such as the Japanese, prolonged eye contact is considered rude and is generally avoided.
Personal Space & Touch: In Europe and North America, business people will usually leave a certain amount of distance between themselves when interacting. Touching only takes place between friends. In South America or the Middle East, business people are tactile and like to get up close. In Japan or China, it is not uncommon for people to leave a gap of four feet when conversing. Touching only takes place between close friends and family members.
Time: Western societies are very 'clock conscious'. Time is money and punctuality is crucial. This is also the case in countries such as Japan or China where being late would be taken as an insult. However, in South America, southern Europe and the Middle East, being on time for a meeting does not carry the same sense of urgency.
Meeting & Greeting: most international business people meet with a handshake. In some countries this is not appropriate between genders. Some may view a weak handshake as sign of weakness whereas others would perceive a firm handshake as aggressive. How should people be addressed? Is it by first name, surname or title? Is small talk part of the proceedings or not?
Gift-Giving: In Japan and China gift-giving is an integral part of business protocol however in the US or UK, it has negative connotations. Where gifts are exchanged should one give lavish gifts? Are they always reciprocated? Should they be wrapped? Are there numbers or colours that should be avoided?
All the above in one way or another will impact cross cultural negotiation and can only be learnt through cross cultural training. Doing or saying the wrong thing at the wrong time, poor communication and cross cultural misunderstandings can all have harmful consequences.
Cross cultural negotiation training builds its foundations upon understanding etiquettes and approaches to business abroad before focusing on cross cultural differences in negotiation styles and techniques.
There are three interconnected aspects that need to be considered before entering into cross cultural negotiation.
The Basis of the Relationship: in much of Europe and North America, business is contractual in nature. Personal relationships are seen as unhealthy as they can cloud objectivity and lead to complications. In South America and much of Asia, business is personal. Partnerships will only be made with those they know, trust and feel comfortable with. It is therefore necessary to invest in relationship building before conducting business.
Information at Negotiations: Western business culture places emphasis on clearly presented and rationally argued business proposals using statistics and facts. Other business cultures rely on similar information but with differences. For example, visual and oral communicators such as the South Americans may prefer information presented through speech or using maps, graphs and charts.
Negotiation Styles: the way in which we approach negotiation differs across cultures. For example, in the Middle East rather than approaching topics sequentially negotiators may discuss issues simultaneously.
South Americans can become quite vocal and animated. The Japanese will negotiate in teams and decisions will be based upon consensual agreement. In Asia, decisions are usually made by the most senior figure or head of a family. In China, negotiators are highly trained in the art of gaining concessions. In Germany, decisions can take a long time due to the need to analyse information and statistics in great depth. In the UK, pressure tactics and imposing deadlines are ways of closing deals whilst in Greece this would backfire.
Clearly there are many factors that need to be considered when approaching cross cultural negotiation. Through cross cultural negotiation training, business personnel are given the appropriate knowledge that can help them prepare their presentations and sales pitches effectively. By tailoring your behaviour and the way you approach the negotiation you will succeed in maximising your potential.
By Neil Payne
Money makes the world go 'round. And when it comes to meeting planning, money can probably get you whatever you want. However, few event planners have the luxury of an unlimited budget. Your boss may like to drink champagne on a beer budget. In other words, caution you to spend less, but expect miracles at the same time.
Preparing and managing a realistic budget is serious business, but to score "big boss" points you also need to be a savvy negotiator and cost-cutting aficionado. To help you on your way, here are 30 tips in a variety of different areas to keep your meeting expenses at a minimum without losing quality you strive for.
1. Keep your budget flexible. Be prepared to build in a contingency of 10 percent into your total budget to take care of any unexpected expenses and emergencies. Unforeseen or overlooked costs such as, overtime, overnight mailings, phone and computer hookups or speaker substitutions could skyrocket your budget.
2. Check all invoices. Question anything on your invoices that doesn't compute against the written quotation. Scrutinize your hotel/facility and food and beverage invoices while on-site. Ironing out discrepancies in person is much easier than over the phone.
3. Limit authorization. Only a select few should have the authority to charge items to your master account at the hotel. Make sure hotel has a list of these people, and refuse to pay for charges signed by unauthorized personnel.
4. Review accounts daily. To avoid any major surprises or heart failures when you see the final bill, review your accounts with the facility on a daily basis. It's easier to spot errors or make necessary changes if costs are escalating in certain areas.
5. Schedule during low-usage times. If you have the flexibility, consider scheduling your meetings during low seasons or days of the week when the facility is less busy. Booking near holidays such as Easter, Memorial Day, and Labor Day might definitely be to your advantageous.
6. Ask for the best rates. Do your research. Check out the rack rates, corporate rates, AAA discounts and so on, and compare them to the group rates you're being offered. Call the toll-free reservation desk for information.
7. Confirm and reconfirm your dates and event details. Overlooking a detail may cost you big bucks.
8. Request a discount for on-site payments. When the facility doesn't have to wait for payment because you arrange to pay immediately after the event or as the meeting is ending, they may well be open to a discount for prompt payment.
9. Be conservative with room blocks. With more and more guests using discounted hotel sites for room bookings, attrition on unused rooms can get very expensive.
10. Negotiate comp rooms. As part of your discussions with hotel management, negotiate comp or discounted rooms for speakers, staffs and or upgrades for VIPs.
11. Understand your cancellation clause. Don't sign anything you're not completely happy with. Be certain that your cancellation clause is reciprocal, so that both parties get the option to back out of the contract before a specified date, in case of any changes to the original agreement.
12. Negotiate set prices. To help with your budgeting, arrange to pay a specified amount on food and beverages during your entire event, rather than a rate per person, per function.
13. Consult a tax attorney. Investigate tax laws for your business location and the event location. You may be eligible for tax breaks that you're not claiming.
14. Keep room setup simple. Wherever possible use theater style (where only chairs are used) as it is less labor-intensive than classroom-style (which includes both table and chairs), thus lowering setup costs. Also, plan to keep setups the same from day to day.
15. Check into other groups. Find out about groups holding their meeting prior to and after yours and discuss staging needs. You may find that you can save on setup and teardown if you all have the same or very similar requirements.
16. Investigate sponsorship opportunities. Find sponsors to cover as many of your program expenses as possible, especially speaker fees, audiovisual equipment, and special meal functions.
17. Investigate grants. Although it might be a time-consuming exercise, you might look into specific federal, state, local or corporate grants that might be available for holding your meeting.
18. Use industry experts. To save on speaker expenses, consider using industry experts whose companies often pay expenses. Alternatively, use local speakers where appropriate to save on travel expenses. However, check how good they are before hiring them. You may end up with a dud!
19. Avoid renting unnecessary equipment. Double check speaker needs for audiovisual equipment to avoid renting unnecessary items.
20. Keep signage simple and reusable. Consider investing in a laminating machine to make your own signs.
21. Discuss economical audiovisual setups. Limit the number of microphones needed. Check if the hotel supplies a complimentary microphone in each meeting room. Skirt a cocktail table instead of renting special carts for A/V equipment.
22. Use outside suppliers. Look outside the hotel for possible audiovisual suppliers whose prices may be more competitive than those in-house. However, the hotel may match the other supplier's prices if asked.
23. Save on transportation. Use airport shuttles instead of taxis. If you have a sizeable group attending your event, negotiate special discounts with the shuttle bus company. Alternatively, check if the local taxicab company can provide discount coupons.
24. Arrange for one room. For smaller committee meetings that may be held during a larger conference arrange for a buffet luncheon to be held in the same room as the meeting to save on having to rent a separate room.
25. Negotiate food. Negotiate paying for food based on consumption. You can then return food without having to pay for it.
26. Minimize portions. Sever mini-Danishes, muffins and doughnuts, or cut larger servings in half. Many people (especially women and dieters) only want half to start with. Alternatively, serve a continental breakfast instead of a full breakfast buffet.
27. Opt for fewer choices. When it comes to hors d'oeuvres, go for fewer choices in larger quantities rather than a large selection in smaller quantities. And, remember to avoid the shrimp. People inhale it. There's never enough!!!
28. Check for dead stock. Check if the hotel has dead stock wine available (such as wine that in no longer on the wine list). You may be able to negotiate a great price for some really good quality wine.
29. Store opened bottles. Find out if the hotel can store opened bottles of liquor from one reception and us them another reception during the same conference.
30. Open bottles as needed. As the banquet captain to open wine bottles only as needed. You pay for every bottle that's been uncorked.
Bonus tip: Avoid salty foods during receptions as it encourages people to drink more.
Written by Susan A. Friedmann,CSP
Have you ever tried to negotiate a deal for software, computer equipment, or consulting services with a technology company? The task can be daunting. Unfortunately, the sales forces of most IT companies are armed to the hilt with techniques to get the best deal for them, and not necessarily the best deal for you. And even worse, most of us computer folk (like myself) have never been trained in the art of negotiation, so it can be difficult to spot a snake in the grass. Before you begin negotiating a technology deal, know what you're getting in to.
Solicit, Don't Be Solicited
I receive at least three calls each day from technology vendors interested in selling something: hardware equipment, software tools, consulting services, etc. Usually, these calls are "cold". My name somehow landed on a telemarketing list in the hands of some vendor who is calling me out of the clear blue sky hoping that what they sell somehow matches what I need. You can waste hours on the phone letting some non-technical, script-reading, telemarketer or sales representative chew your ear off about their latest and greatest gizmo. Very rarely do these types of calls ever translate into a real business opportunity.
The most popular cold call opening is "Good morning. This is Joe from the XYZ software company. We offer break through whatever solutions to help you reduce your total cost of ownership for whatever. Let me ask you, are your responsible for managing your companies whatever investment?" I get so many of these calls that I can answer them in my sleep. Years ago, I used to engage in some level of discussion with these people and it always went nowhere. Unless you really think they've got something you might want to buy, cut them off immediately. And just like any telemarketer, they have a scripted response for anything. If you answer the above question with "No. I am not". The immediate response will be "Could you direct me to someone in the company that is responsible for whatever". If you hand out a name and number, you're just passing the buck to some other poor soul in your organization. My favorite response is "No. We don't respond to phone solicitations." Nine times out of ten, they will give up.
Sometimes, the cold caller will make another run at it and re-state their purpose or as they close the call, sneak in another sales pitch. "Yes sir. I understand. We offer something really great for your company and would love to send you a free trial version at absolutely no cost. Its free to try." You could be tempted to say "Free? Tell me more." Again, this type of response will just open up the sales speech flood gates and you will be wasting your time trying to get a word in edge-wise. Stick to your guns: "As I said. We don't respond to phone solicitations." is the proper response. If they make yet one more run at it, the final blow would be "Not sure if you're deaf, but I said we don't respond to phone solicitations. Tell me your name and transfer me to your supervisor." You will either hear apologies or a dial tone. Either way, you've just gotten yourself off of a call list and will never be bothered again.
If you're interested in buying something, you do the calling, not the other way around.
Put The Horse Before The Cart
Never begin looking for technology solutions without knowing what you're looking for. Know the business problem you're trying to solve. If you know you need a software package that automates statistical analysis, flush out a more detailed set of statistics requirements (types of model, sample sizes, etc.) before you begin to shop around. Usually, software products have bells and whistles that, although look cool, are not absolutely needed. Before you begin comparison shopping, define your basic technology and business requirements. Knowing what you really need will give you confidence and leverage in a negotiation.
Always Comparison Shop
No matter what, always evaluate multiple options. If you're looking for software, don't get excited and latch on to the first package that looks good. And certainly don't give a sales rep. the impression that you're overly interested in their solution. They will be less likely to move during a negotiation. The IT market is over abundant with hardware, software and services solutions. Probably, you will have many options to choose from. Be picky!
Create Your Game Plan
Before you begin negotiating a deal with any technology vendor, plan your negotiation carefully. I have included some general planning questions that you should answer in preparation for a negotiation. The questions I have listed below may not make sense for your negotiation, so feel free to modify them for the occasion. The point here is to prepare in advance. You don't want to figure out the answers to these types of questions in the middle of a negotiation as it may give an inch to the sales person. I would even recommend writing the questions and answers on a sheet of paper for reference.
(Price) How much do you think you should pay for this software or service? What is the market rate or street price? What are you prepared to spend? What is the highest price you would be willing to pay?
(Features) What key features and capabilities are you looking for? Force rank the features. What does the prioritized list look like? Of the features you need, categorize them into two categories: "must have" and "nice to have".
(Service Levels) Do you expect some level of performance from the equipment, software, or service? Are there up-time requirements? Do you need 24x7 technical support? Do you expect the vendor to incur a penalty if they don't perform up to your service levels?
(Trades) What is most important to you: price, features, or service level? Force rank these in order of importance. Would you be willing to trade items between categories? For example, would you be willing to give up a certain service level for a lower price?
(Suppliers) Which vendors offer something that you think could meet your needs? How long have these companies been in business? Are you doing business with them already? Do you have a good business relationship with them?
(Gravy) If you had your druthers, what extras would you like the vendor to throw in for free? Would you like training or extra manuals? Would you like special reporting?
You will probably have more questions in addition to the ones listed above. Take the time to write them down and create the answers. Once you have established your position, you will save a great deal of time evaluating your potential vendors and negotiations will be less painful.
Lead The Dance
When you are ready to face off with a vendor, do your best to drive the discussion. Get as much information about the vendor and their product and service before price enters into the discussion. Just like car buying, pick out your car (or choice of cars) before you negotiate a price. If you find that the discussion is prematurely heading toward pricing, bring the conversation back to understanding the product or service itself. If you're not ready to talk price, say something like "Right now, I am just evaluating your product (or service). Unless I think there's a real opportunity, I'm not prepared to negotiate price right now."
Pricing for hardware, software, and services follow very different models. Hardware prices are fairly standard unless the product is new. Usually, the mark-up on hardware is very small (1-15%). On the flip- side, the mark-up for software is huge (100%+). Software is priced based on value, not the cost to the vendor so you can usually negotiate software prices down substantially. Services are usually based on labor rates and are marked up based on the demand for those skills (15-50%).
When you are ready to discuss pricing, take the lead in the dance. Here are the steps to follow (in this order):
Make the vendor throw out the first offer. Never be the first one to suggest a price. Although rare, you could hear the question "how much would you be willing to pay for our product?" A good response would be "As little as possible. What's your offer?" This response puts the ball firmly in the vendor's court. Remember, if you've done your planning, you really do have the answer to this question, but your job is get a price far below your maximum, so don't tell the vendor up front!
Express concern. Never get excited about the first offer no matter what. If you're considering other alternatives, you may be able to get a better price. My favorite tactic is to say nothing and simply make a non-verbal expression of concern. Usually, the vendor will come back with either "but I'm sure we could sharpen our pencil", or "we could probably come down lower if that price is too high", or the ever popular "but we're willing to work with you". You may also be prodded with "You don't seem to like that price. I seem to be out of the ball park. What price would you be comfortable with?" Here's where the dance gets interesting.
Make the vendor throw out the second offer. This can be difficult, but by making the vendor throw out more prices, you are lowering the ceiling of the negotiation going forward. If, in step 2, the vendor says "we could probably come down lower if that price is too high.", immediately respond with "How much could you come down?" or "It seems you didn't give me your best price to begin with. What's your best price?". Latch on to what a vendor is saying and keep asking questions. Stay on this step as long as possible and try and keep the vendor to continue to provide better pricing.
Counter offer. Propose a different price than what's on the table. Be reasonable. If you've done your homework and checked the going price for the product or service, you know what the range is. If you throw out a price that you know is ridiculous, it will look like you don't know what you're doing. However, if you counter with a price that demonstrates that you've done your homework, the vendor will know you are serious. Justify for your counter offer. For example, you may want to reveal that you've done some market analysis by saying "I've researched the market a little and think my offer is more in line with market prices." Obviously, the vendor may disagree, but at least you're backing up your counter price.
Trade. Unless you can land on a price outright, there will likely be gives and takes on both sides. Go back to your to plan and begin proposing trades. Always make trades that bring you little to no value but may be perceived as valuable by the vendor. This can be very difficult, but can pay huge dividends. Here is a perfect example. Let's say you want a service contract to outsource your help desk (technical support phone service). Let's say you really want the help desk to answer your calls within 1 minute (you've already figured out this requirement in your plan) but the vendor's first offer is to answer your calls within 30 seconds. Let's also assume that price is more important to you than having your calls answered 30 seconds faster (remember- the vendor doesn't know this). And let's say the offer on the table is $5 per call. A great trade proposal would be "Your price is too high for me. I can recognize that you need enough people to answer those calls within 30 seconds and that has value. I would be willing to sacrifice an extra 30 seconds on each call if you could bring your price down." If the vendor responds with a counter-offer, circle back to steps 4 and 5. Try and keep the counter offer / trade cycle going as long as possible.
Nibble. Just as you and the vendor are about to agree to terms and everyone starts smiling and shaking hands, start asking for the gravy. Let's say you've just negotiated a software deal and you would really like some training. Just when you think the vendor believes the negotiation is at its very end, you could say "I am really glad we could work this out. I'm looking forward to using your software. One more thing- would you mind spending a couple days showing me how to use your product. A little training could be useful. Is that ok with you?" You run the risk of opening up the negotiation, but you stand a better chance of getting a few extras free of charge.
Walk The Talk. If you've set your maximum price and you can't seem to negotiate what you want even with trades, walk away. Be firm and truly be prepared to walk away. Be blunt. "It seems we're not getting anywhere. I think I'll take my business elsewhere. Thanks for your time." Shutting the discussion down can sometimes break the log jam. If a vendor really thinks they're going to loose the business, they may suddenly move.
Patience is a Virtue. Negotiations take time. Before you begin, know what your timeframe to make a decision is. Never act hurried or anxious. Come across to the vendor as relaxed and confident (but not cocky). The message you want to send to the vendor is "I've got all the time in the world."
Never Lie. Although this happens in many negotiations, telling lies will hurt your reputation and could poison vendor relationships. I am not a proponent of outright fibbing. Be honest but don't give away your hand.
Follow these steps, and you will strike better deals and build confidence in your ability to negotiate. What I have left out in the steps above are standard questions that vendors love to ask. Let me leave you with these questions, their underlying motive, and what you should say. The trick is to always put the ball back in the vendor's court to better your position:
Question: "What's your budget for this project?"Motive: Setting the price floor
Answer: "That's confidential. Why do you need to know that?"
Question: "What's most important to you? Price or service levels?"Motive : Prioritizing your trades
Answer : "They're both important to me. I'm looking for the best package"
Question: "How soon do you need to make a decision?"Motive: Setting the timeframe
Answer : "I will make a decision when I can get the overall best deal"
Question: "Can you make decision quickly. I've got to make my sales quota and our quarter is ending soon. I can't guarantee I give you the same discount"Motive : Apply pressure
Answer : "I'm not going to rush my decision because of your company's business calendar. We may need to re-think things..."
There are others, but always maintain your control, patience and poise and always take the lead in the negotiating dance!
By Andy Quick
Negotiations can seem as complex as physics, and in fact, people go to college to study the science of negotiating just as they would the laws of nature. At the same time, negotiation is like an ancient art form, some sort of Zen mental jujitsu. When neither the Zen nor the science works, though, no one wins.
Just ask any hockey fan out there. The recent lockout and cancellation of the 2004-2005 NHL season is a perfect example of poor negotiating. Both the players' union and the league owners broke all of the rules when it came to brokering an agreement on player contracts. The result are hockey rinks across North America that are so quiet that you can hear a pin drop-unfortunately, not a puck. In dollar terms, professional hockey is missing out on television contracts, advertising fees, and tons of ticket sales.
Of course, you won't lose billions in revenue if you fail at the latest negotiation at your favorite online classified or auction site. But you could let a treasure slip through your fingers. Success in deal making, on the other hand, could land you that rookie Bobby Orr card, signed Stanley Cup puck, or whatever other fantastic item you're bidding on.
Plus, proper negotiations and compromise can ensure that you get the item for its fair value, including a good price on shipping and taxes. This increases the profitability of the trade for both you and the seller. The deal gets closed without nasty disputes, blow-ups, or hip checks. And both of you are left to do business again in the future.
To score all of these benefits, and avoid your own mini lockout, follow these simple tips on negotiating that will net results at online classified sites. As you'll see, victory isn't so much an exact science or a mystic sixth sense. It's more about simple know-how and common sense.
Warm up. Don't jump into a negotiation cold. Before you even face off with your opponent, figure out for yourself what would count as a victory. What do you exactly want out of the trade-and at what price?
Consider a truce. It may not even be worth dropping the puck at all. In other words, negotiations, like hockey games, can end in a loss for the home team, you. So weigh this risk before you start. If the item at hand is a dream buy, you may not want to endanger your purchase with a drawn-out negotiation.
Know when to pass. On the other hand, if the item is far from dreamy-and you're pretty sure something better may come along later-you could pass on negotiations. Or go for the score. Offer a lowball price. If you win, you won't be out too much, and if you lose, it won't leave a mark either. But be certain if you play this game. You could miss this opportunity without a guarantee of future prospects.
Know your enemy. Coaches and players spend hours before games watching films of their impending competition to study their tendencies. You need to take the same approach when it comes to making a deal. Try to read your opponent's mind. What is his or her goals in the negotiation? Does he or she have any strengths that they can use against you? Are there any weaknesses that you can use against them?
Spot all of your passing lanes. During your research, you may find that this particular vendor isn't the only one in the game with what you're looking for. Using these other vendors, and their prices, to your advantage can help you skate circles around your competitor.
Practice before you play. Also, research the item before you make a play on it. This knowledge, such as the going price and quality markers, can work as leverage during the negotiating, too.
Translate thought into action. Your strategy can become more complicated and unpredictable-and effective-once you're in the heat of battle. Just remember to think on your feet and remember all that you learned in your "training." For instance, if you know that the vendor has other items for sale besides your target, agree easily to one of these other purchases. Go for the easy one first. That will lure them into trusting you and giving you an easy pass on future, and more important, deals.
When it comes down to it, negotiation is all about this kind of give and take. It works out best when both parties get what they want out of the deal, without feeling ripped off as if they gave too much for too little.
That brings you to the one "don't" of negotiating. Don't fear a standoff. They are part of the art and science of trading, so don't be tempted to cave in just to break the deadlock. Instead, let your opponent make the first move. They will. They want to close the deal, too, don't forget. You both will be better off for this in the long run. And you won't end up like the NHL, the No Hockey League.
By Donald Lee
Consultants who offer executive assistant or computer services on a virtual basis must know their value and be prepared to gauge their billable rate to meet the circumstances.
At some point everyone encounters potential clients who expect professional work at rates that are less than appropriate. For example, a posting advertises an opportunity that matches your highly polished skill set. After making contact with the client you find they don't want to pay a reasonable fee for the services they expect.
While these types of engagements might help to build a newcomer's portfolio or pay some bills when money is tight, a successful virtual service provider knows their value and refuses to be exploited. Make sure clients understands your training, background and areas of expertise. Then, set expectations for services by pricing in accordance with your qualifications and skills.
Be prepared to be flexible, yet firm in your compensation requirements.
? Determine your base rate in advance of client discussions. Scratch it out on paper or create a spreadsheet. Take into account the fixed overhead and variable costs to legally operate your business
? Determine your flex-rates for times you might be willing to work for slightly less or feel the need to demand more pay.
? Calculate the value added for meeting tight time constraints, the demanding nature of the client or the complexity of the project
? Take the time to project costs not otherwise considered in your base rate (long distance, printing, etc.)
A pre-determined rate scale helps you respond calmly and logically to stressful situations, so you can advert potential disasters.
Last year I turned down what seemed on paper to be an ideal "personal assistant" opportunity. The ad described duties such as checking email and preparing responses on the client's behalf. Work assignments would be completed by phone and fax for a client who did not want to use a computer.
The job matched my skill set, but I chose to pass because:
1. The offered rate was 50% less than the low end of my base rate range.
2. The client expected me to own and pay for the operation of a fax machine, but was unwilling to pay for its purchase or operation.
3. The client expected a commitment to work for him part-time, even though hours were going to be determined by him each week
4. The client's refusal to even consider using a computer was destined to create confusion and conflict over what I prepared on his behalf
Regrettably, I realized this potential client was a fussy, technology laggard who wanted a very experienced, highly reliable personal assistant who was agreeable to an entry level rate.
Know when to "pass" on a client so you can continue to market to more viable prospects. Try to negotiate a better rate with clients by matching their expectations with your level of service. Keep an eye out for performance bonuses or other types of perks to balance out discounted rates for good clients.
By Elisa Shostak
I want to get better at negotiation, but where to start? UK Amazon currently has 2332 books on negotiation. Google indexed nearly 4 million relevant (yeah right) pages. All I need is a simple, straightforward model that I can put to use now.
Phased by the glut of information, I went within and remembered the wise teachings from a senior manager in my early working life. So, come closer, listen up, because he was very wise indeed?
He said "Do you know your LIMits?"
"My what? said I cautiously, wondering if he was asking about my drinking capacity, driving speed or something equally off the wall.
Being worldlier than I, he noticed my confusion and helped me out.
"Lyndsay, if you want to be successful in life, you need to know your LIMits. Let me explain. What would you Like to have? What do you Intend to have? What Must you have? What are your LIMit's?"
Slowly it dawned on me that he was talking the strange management language of mnemonics.
He wrote down the word for me like this.
And next to the letters he wrote
L - like to have: your number 1, top of the pile, best outcome
I - intend to have: your realistic, shoot for the stars but reach the moon outcome
M - must have: your bottom line. Deal is off if this is not met.
(The I,T and S are irrelevant, just convenient additions to prevent asking what your LIM are!)
Testing the Theory
And so ended his lesson. Off I scampered like the eager young graduate I was, itching to put this into practice. Thinking about a possible secondment opportunity I wrote the following:
Like - 10% bonus, new laptop, mentoring with new senior manager
Intend - 5% bonus, attendance at special course, return to new job after secondment
Must - same pay, relocation expenses paid, credit in my appraisal
The final deal I struck landed somewhere between Like and Intend, with a few perks I had not even considered, so I felt it was a success.
Why Negotiation Works
There are a couple of reasons why simple models are useful but often forgotten.
The LIMits negotiation model encourages flexible thinking in that there are 3 potential good outcomes. Compare this with the most common alternative - success or failure - and you can see there is only 1 measly good outcome. You don't have to be a gambling pro to work out which approach is best! The secret of the LIMits model is if you don't meet all the criteria for success, then the opposite is not failure, just a different outcome.
The other benefit of using the LIMits negotiation model is it forces you to prepare, gaining you vital spare capacity when you are in the thick of the negotiation. You will be clear about your position and better able to get that across.
As I demonstrated, simple models are forgotten because we seek out newer, shinier ideas in books, the internet or from other sources. Reduce information overload by re-using what you already know or recycling an old idea into one that works today. Old knowledge is not always redundant.
So, negotiate that new job, better deal or contract. All you need is to know your LIMits.
By Lyndsay Swinton