Managing the Sales Negotiation Process

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.

Be Patient

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

Cross Cultural Negotiations

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

30 Tips for Keeping Meeting Expenses to a Minimum

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

Negotiating Technology Contracts

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: The Art, Science, & Sport of Online Deals

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

Determine Your Rate And Negotiate Carefully With Unreasonable Clients

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

The Art of Negotiation in 535 words

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.

L
I
M
I
T
S

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. 

Information overload

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

Lets Make a Deal

Smart buyers will always ask for a better price. Unfortunately, too many sales people and business owners automatically think that reducing their price is the most effective way to respond to this request.

However, negotiating is not always about price. Although price is a factor in virtually every sale it is not usually the primary or motivating factor. Everything you say and do from the first contact with a prospect affects the value of your product or service in their mind. That's why I believe it is important to look at the negotiating process differently in order to achieve better results.

First of all, invest time gathering information about your prospective customer, his needs, situation, and buying motives. The more information you have the more prepared you will be to negotiate later in the sales process. Regardless of what you sell, and to whom, information will help you negotiate more effectively. Many of my clients tell me that their customers care only about price, but upon further exploration, other issues usually arise. Uncovering the key issues your customer is facing is critical to your negotiating success.

The second most important step is to establish the value of your product or service to your customer. Positioning is an important factor and will affect the price your customer is willing to pay. What pain does your product or service eliminate? How does it solve a problem they are experiencing? How do your products and service differ from your competitors? Most of my clients sell premium products at a premium price. In exchange, their customers receive better than average service, faster response times, or higher quality products. What is your leverage and how can you use it to increase the value of what you sell?

You have executed the above steps but price is still an issue for your customer. What do you do now? Instead of conceding to their request and giving them a discount, focus on creating a trade. This means you should ask for something in exchange for making a concession. What can you trade or ask for? Almost anything!

A longer contract, a bigger order, more add-on items, an introduction to another key decision-maker in the company, access to their mailing list or client database, or payment terms. You can negotiate for products and services that the other person or company offers such as consulting, office equipment, computers, furniture, business services, etc. I once worked for an electronics company and my boss offered a big-screen as payment for services to a potential vendor. I was shocked when the vendor eagerly accepted because I always had the impression that business people focused strictly on cash.

Here are a few ways you can effectively position this request.

"If I could do that price for you would you be willing to extend the length of the contract for an additional three months?"

"If I could work that out would you be prepared to give me advertising space?"

"The only way I could give you that is if you add one more line of products."

"Let's put that aside for the time being. Would you be able to give a similar amount of?in exchange for that concession?"

The key here is to think outside the box and explore other options available to you.

I recall speaking to a prospective client about a training workshop and was asked to make a concession that amounted to a fifteen percent discount. I was not comfortable with this so I asked my prospect if he would be willing to give me a comparable amount of his product instead. He did not have the authority to make such a decision but spoke to someone who did. My request was eventually denied so my client conceded to my initial offer.

Another effective approach is to make the concession but take something away from the initial offer. For example, you could say, "I can do that. However, I will have to charge you for?" or "I can do that. Do you want free delivery or after-hours service taken out of the contract?"

Most people will expect you to keep all the conditions "as is" but they will want the lower price. By demonstrating how much the concession is worth you can reduce the effectiveness of their request.

Finally, another strategy is to always ask for something in return for making a concession even if you don't need it. I have been surprised how many times I have gotten something extra simply by asking. Plus, it often prevents the other person from asking for an additional concession because they know you will ask for something in return.

Remember, your ultimate goal is to give away as little as possible in order to close the sale. Every time you discount your product or service you discount yourself and eat away your profits.

By Kelley Robertson

Writing an RFP (Request for Proposal)

A while back, a potential client provided me with some general details of the writing work he wanted me to do for his company. Then he asked me to send him a proposal.

Proposal?! I panicked as I tried to confirm with him what he meant by that since I had never done one before, at least not as a freelancer.

I must've not really wanted to pursue this opportunity since I didn't bother to do research or follow up with the company after submitting a contract instead of a proposal. A little time passed, I came across an article on writing RFPs (Request for Proposal). Ding! The light bulb went on. This guy verbally gave me his RFP and wanted a written response.

When a company needs a project to be completed by a contractor or outside source, they write a RFP. This is a formal document describing the project, how the contract companies should respond, how the proposals will be reviewed, and contact information. Often, the company documents the submission guidelines to make it easier for them to compare responses. There are no specific standards or guidelines for creating the RFP, but government agencies usually strict standards they follow when conducting the proposal process.

Outside companies read the RFP and write a proposal (a bid) explaining how they can best provide and meet those needs. When writing the proposal, the company should closely follow the guidelines established in the RFP to avoid being removed from consideration for the potential project.

A typical proposal contains:

Executive summary - summary of the entire proposal

Statement of need - why project is necessary

Project description - How project will be implemented and evaluated

Organization information

Project schedule

Budget

Conclusion



My situation was an informal version of all this. The client gave me a high level overview of what I might do for him. If I knew then what I know now, I would've written up a description of the client's needs and how I would complete the work in meeting those needs.

Small businesses would likely do a proposal in between the one I got and the complex government required ones. Most small businesses will be prompted to write a proposal when approaching a client. The client may ask you to submit a proposal outlining what you can do for them. In this case, write a proposal including the elements of a typical proposal and keep it short and to the point especially if the client is not a large company.

There are examples of RFPs and responses peppered throughout the Web, but which one you can learn from depends on the type of work involved. A proposal can be two pages or as big as a book. Rely on your favorite search engine and do the research to create an unbeatable proposal.

By Meryl K. Evans

Where to FIND the BEST Employees --

Obviously, you might logically say, "that is good!" You would most certainly be on track feeling good about everyone in your area having a job. Getting everyone working and being more self-sufficient is our logical goal.

WHAT IS FULL EMPLOYMENT?

For many years, the marketplace has considered 4% to be reaching a full-employment level. Very few employee choices are available. Many in the 4% (unemployed) group have little or no talent to offer. No basic valuable marketable skills. Most of these unemployed persons have a very poor work history. Not all, but a large majority have a limited education at best.

OUTSOURCING and DOWNSIZING

News continues to flow regarding outsourcing by major employers in almost every industry. Jobs are moved to an "outside" service for economic reasons. Many employers cut their workforce to meet PROFIT expectations for the quarter. Good decision? Not the issue when the level of profit is deteriorating and action is imperative.

Big Banks along with the Utilities and other large employers are challenged to meet stockholder demands for PROFIT. "Cut the staff" seems to be a Boardroom edict.

OUT OF THE COUNTRY

Textile industries are faced with layoffs when jobs leave the country for cheaper labor costs. There is NO choice for those who no longer have the orders to fill.

Companies are faced with NO price increases in many industries, including the service sector. Wages are challenged along with benefits for the employee.

You'll find many x-employees with 20 plus years of service. Loyalty was great. Many have worked for years beyond the call of duty. Dedicated to his/her job. Dependable. Trustworthy. Terminated!

MAJOR PROBLEM

Skills and talent are one-dimensional. No chance of finding a new job in the same industry. Non-transferable skills. It becomes a "start over" challenge for the x-employee.

Another problem is the wage level after 20 years or even fewer years with the same employer or industry. Instead of a 10% raise the "new" employee may end up with a 50% decrease to the beginners' salary scale and often without any benefits.

SOURCES TO CONSIDER

Being objective is challenging after 32 years in the personnel business. However, my suggestions come from a good base of background experiences in hiring thousands of "staffers" for a wide and diverse client base.

Just for the record, I'll include some other sources where good employees can be recruited. You have to GO BEYOND the old methods and expand your horizons in today's' marketplace.

YOUR EMPLOYEES (best source for many firms)

Business Associates [networking]
Civic Organizations ~ Technical Colleges ~
Community Colleges ~ Business Colleges ~
Universities ~ Churches
Temporary Help Services [Staffing]
Personnel Agencies [Recruiters]

Where is YOUR next 'good' employee? None of us know until every base is covered. Your first try may be good enough. Other times it may take 15 searches and interviews before you find the skill and talent required.

A major benefit to YOU in using a Staffing [Temporary Help] Service and/or a reputable Personnel Agency (some do both) is that recruiting, interviewing, and testing is an EVERYDAY activity.

EXPENSE Vs INVESTMENT THEORY

Hiring employees is an INVESTMENT in the future of YOUR business. Not an expense! Pro-rate the FEES for professional services over 12/24 months. Your weekly or monthly cost is nominal for the return benefit of a QUALITY hiring decision.

One final thought. Involve YOUR staff in the hiring decision of your future employees. Share the interview process and get input from those on the "firing" line. A good business practice to follow.

By Don Monteith

Negotiating Tactics: Don't Let 'Good Guy - Bad Guy' Control the Sales Negotiation

Counter one of the classic negotiating gambits by addressing it directly.

You've assembled a brilliant sales proposal for a new client and when you arrive to the meeting to hammer out the final details, you suddenly find yourself sitting across the table negotiating with two people. One is a person with whom you've had contact during the sales process; the other is new - a purchasing agent.

The former is characteristically warm, gracious, and quite friendly to your proposal. The latter is hard-nosed, aloof, and completely opposed to nearly every one of your positions. They are playing the classic negotiating tactic of 'good guy - bad guy.'

In the audiobook, "Sound Advice on Negotiating Skills," author Roger Dawson says that when buyers use good guy - bad guy, they are counting on the salesperson being drawn to the good guy. Psychologically, the salesperson wants to please him or her by making concessions.

The solution, says Dawson - a renowned speaker and author of the book, "Secrets of Power Negotiating" - is to "counter their tactic by letting them know that you realize what they're doing. It's such as well known negotiating tactic that when you say to them, 'Oh come on, you're not going to play good guy, bad guy with me, are you?' they become embarrassed they were caught and will back off."


By Richard Cunningham

Games are a Reflection of Behavior

You are standing on a small stage yelling, "What's the name of the game?!"

"Win as much as you can!!!" comes roaring back.

"Who's responsible for your score?!"

"I am!!"

The audience is composed of ninety men, all prisoners in a federal maximum security prison.

One more thing - you're a woman.

For three years, Alicia volunteered every Thursday at FCI (Federal Correctional Institute) in Bastrop, Texas-

"I used my skills as a corporate trainer to help these men learn to shift their perspective on themselves and the world."

"Along the way the prisoners taught me as much, perhaps more, than I taught them."

"In my training business, I use games as a way to break down barriers and shift perceptions. What I came to realize is that your behavior in a game is an exaggerated reflection of your behavior in real life."

Games are an opening to behave true to our natures, to react immediately rather than with a careful response. Depending on the other players, we may monitor our behavior less in a game than in the real world, but we aren't acting differently. In a game there are no emotional holds barred.

In a game, we are allowed to be more right brained than logical. After all, "It's only a game."

Saying something is only a game tends to trivialize its importance. Precisely because we view it as trivial, and of no importance, we can give ourselves permission to let our true natures out.

When we floated this idea before a number of colleagues, several of them told us stories of self-discovery. One woman, a very sweet and kind person in "real life", was known as "the enforcer" when she played hockey in school. Another shared that, when she plays a game against total strangers she becomes "brutal" and highly competitive.

So if our true nature comes out in a game, what can we do with that information?

Can we transform situations so that we can be true to our nature? Can we make a game out of real world situations to allow our true nature to flourish? The obvious example is to view business as a game to be won. This implies competition and a winner take all attitude.

Yet Covey and others have told us about creating win-win situations. Is there such a thing as a win-win game - a game where everyone wins, where no one loses? Can you devise a game where you can put your competitive streak toward a larger goal? Can the proverbial pie be made larger? As someone said to me, to transform from "me winning" to "we winning".

What's the name of the game? Win as much as you can!

Who's responsible for your score? I am!

The game Alicia played with the inmates was called "the handshake game". She had them pair up by size, height and weight and explained the rules. "We'll play the game for 45 seconds. You get one point when your hand taps his hip; he gets one point when his hand taps your hip."

The vast majority of the pairs had a combined score of 0 points. A few pairs scored in the 10 - 20 point range.

But one pair scored 260 points.

The high scorers had realized that the name of the game and scoring responsibility did not define a win-lose (or "zero-sum") game. That is, one person did not win at the expense of the other.

Of course, the entire thing was a set-up. Alicia paired them up by size, height and weight to set the expectation that it was an evenly matched contest. She got them chanting to get their excitement up.

And she neglected to tell them that the pair was a team and the team members' scores would be combined.

"Deliberately I didn't tell them they were supposed to cooperate with their partner. I also never told them who the competitors were."

We all know that a "formal" team must cooperate to win. The revelation here was that by cooperating they could maximize their individual scores.

What's the name of the game? Win as much as you can!

Who's responsible for your score? I am!

The rules say nothing about preventing the other person from getting a high score. The pair who "got it" quickly settled into a rhythm of "one for you and one for me". And they could have kept that up for as long as the game ran. Meanwhile, the other teams were struggling and would have exhausted themselves long before the winners did. And, when the few teams who did spot the pair who "got it" there were charges of "cheating" leveled at them. "We saw what they were doing but thought they were cheating or didn't understand the rules."

The cooperation - competition confusion is nicely summed up in the concept called "the prisoners' dilemma". Two people are arrested for a crime and there is enough evidence to put them both in jail for 1 year.

The police keep them isolated from each other and offer each the same deal: "If one of you talks and the other does not, the snitch goes free and the other one gets 3 years. If you both talk, you both get 2 years."

The partners can work together (by staying silent) and both get only a year in jail. By both defecting from the partnership to work with the police they will both get 2 years.

A single defector will go free while the one who cooperated gets 3 years.

The dilemma is formed by pitting trust against greed. The temptation of greed combined with a habit of competition blinds us to a different perspective.

But don't think that only prisoners are subject to this. When Alicia has had groups of corporate executives play this game, they fall into the same behavior pattern as the prisoners. In fact, in some corporate sessions nobody "gets it".

There seems to be a dichotomy between competing and winning. The idea of cooperating to win seems odd. In fact, we see other players complain that the ones who "get it" are cheating!

What you do depends on your view of the game. If the game is seen as a one-time event, why not be brutal - there will be no consequences. But if this event is one in a series, then cooperation is clearly the better long-term strategy, if only because there will be a chance for the other to get even.

In studies of prisoners' dilemma style games (played for points and not reduced jail time) the players eventually settle into a strategy dubbed "tit for tat". Their actions are saying, "If you cooperate last time, I'll cooperate next time. If you defected last time, I'll defect next time."

Using the word "defect" helps us see the shift - the opposite of cooperating (working on the same side) is defecting to the other side.

The desire to compete and the desire to win are not the same.

Game terminology (strategies, tactics, moves, etc.) is often applied to "serious" parts of life. Because the word game has a connotation of triviality, we sometimes bristle at its use to describe the things that mean the most to us.

What if we kept in mind that 'it's all a game' - would we behave differently?

Philosopher James P. Carse writes in the first chapter of Finite and Infinite Games, "There are at least two kinds of games. One could be called finite, the other infinite. A finite game is played for the purpose of winning, and infinite game for the purpose of continuing the play."

The book's subtitle is "A Vision of Life as Play and Possibility." His premise is that a game is about the relationship between the player.

In the book he characterizes two types of players. Finite players play within the rules, infinite players play with the rules. Finite players play to end the game (with their victory), infinite players play to continue the game (by whatever means they see fit). Finite players play to win, infinite players play to keep playing.

The players who "get it" are playing with the rules looking to transform a finite game into an infinite one.

If this article has intrigued you we encourage you to look at the various "games" that you are "playing" and with whom. Who are your "teammates" and what kind of game are you playing? With increased awareness of our behavior, and the behavior of others, we are able to create a "win as much as WE can" mentality.

By Alicia Smith

So Whats Your Argument?

Arguments aren't always bad things. Sometimes They're used to convince someone of an important point they may not yet realize.

You've probably used arguments in this way most of your life in fact!

Maybe you wanted to go somewhere and had to convince your parents that is was a good idea to let you go. So you argued your position with them.

Maybe you wanted to buy a big ticket item and had to argue the value of buying it with your spouse!

Arguments don't necessarily have to be shouting matches. They can simply be a device used to convince someone of something that you feel is important.

It's funny then, how so few sales people use the art of arguing to sell their products. Wouldn't a person who wants someone to buy something from them want to try and convince that one that it'd be a good idea?

Maybe it's because it's not such a good idea?

Could be why so many sales pitches are designed to connive potential customers into buying rather than giving them a convincing argument instead.

Let's face it . . .

Who'd want to argue a losing point?

After all, if a product is of little value, who in their right mind would want to take the position of trying to convince someone it had value?

Maybe that's why so few try to convince rather than connive!

But what is the difference between convincing and conniving anyway?

A conniver is like the person in a movie or TV show that's holding something they probably shouldn't be. Suddenly, a cop pulls up and he quickly passes the object to the person next to him with the words, "Here, take this quick!"

The poor unsuspecting by-stander is "left holding the bag", and doesn't know what hit him as he's dragged off to the pokey.

So, to put it simply . . .

A conniver is the person who tries to get you to do something without thinking about it. He creates a sense of urgency and force feeds it to you before you can say no.

Now a convincer is quite the opposite. He wants you to know what you're getting into and is willing to spend the time going over it with you. He has a valid argument and has no qualms about letting you hear it.

So, by the time he hands you the "bag", you know exactly what's in it, and you've been able to make a rational decision about whether you want to "hold" it or not.

This leaves us with two important questions . . .

If you're searching the Internet looking for product to buy, who would you rather run into?

If you're trying to sell valuable products on the Internet, which of the above two do you think you should be?

Hopefully, the argument is clear!


By Ken Nadreau

Suppliers as Your Partners in Cost Reduction

This article is one of the many articles still to come in which I will discuss very basic yet proven techniques that you could use immediately in your encounters with your suppliers.

Oh but wait, to find any value in this article, you must be a firm believer that Purchasing strategies have evolved from just 1) focusing on price and 2) focusing on quality, reliability, responsiveness and total cost to a much broader focus of building supplier relationships.

Did you know that for each $1.00 you save in your "total cost of ownership" reduction efforts, you will improve your bottom line profitability by $1.00? And did you also know that most companies do not get this concept and continue focusing their resources in all the wrong places?

Now is the time when I want to share with you 4 basic rules that have proven to work and work very well to help you create the partnership relationship with your supplier and allow them to equally benefit from the experience as well.

Rule #1: Getting direct cost savings is really a thing in the past. Getting savings has become increasingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with and build a "preferred" supplier base.

Rule #3: Communicate to your suppliers on "how to" earn a "preferred" supplier status and what is required of them to remain a "preferred" supplier.

Rule #4: Tell your suppliers what's in it for them (WIIFT) as they partner with you and build a "preferred" relationship.

To earn a "preferred" status means that your supplier will have the first shot to quote on new business, parts and project. In fact you can go so far as to create "earn a point" program every time you achieve your cost reduction goals using these techniques as they apply to your business.

Supplier earns a previously agreed upon point(s) when:

1) Shared tooling costs or shared engineering costs on a project

2) Extended terms: 60 or 90 day billing terms for a period of one year

3) Certified as "ship to stock" on all supplied parts or assemblies for a period of one year and remain compliant for every year thereafter

4) Ship zero defects for a period of one year and continue as such for every year thereafter

5) Work with purchasing, manufacturing or engineering to add value

Working with your suppliers to explore these techniques not only presents opportunities for you to reduce your "total cost of ownership" but also helps your suppliers to review, improve and streamline their processes and grow internally to be able to meet your expectations and earn that "preferred" supplier status.

Use this "total supply chain cost" model as your guide to isolate and focus on the actual cost elements impacting your bottom line profitability.

Total supply chain cost=

Buying price=

+Supplier performance cost

+Cost of acquisition

+Out-of-sync planning

-Speculation returns

+Speculation cost

+Mfg. cost

+Selling cost

+Distribution cost

+Profit

=Selling price

By Vera Haitayan

While Youre Waiting

Not long ago, I made a partnership pitch, on behalf of an organization I represent, to another organization with similar interests. If the idea had come to fruition, it would have radically changed our organization.

So, you can imagine my impatience when I didn't hear back from the person to whom I'd made the proposal. She had welcomed the idea, but told me the decision would be made by a council within her organization.

Given the dynamics of an important decision about the future of their organization, I didn't expect a quick response. But, I would have liked at least an update advising me on the status of their considerations.

Then, I had a "Eureka," or maybe I should call it a "Whoops," moment. I realized I hadn't reported back to the people in my organization either. That made me guilty of the same lapse of communication as the lady in the other organization. With that recognition, I made amends by sending out an email to my organization, and followed up with a report at a meeting.

In taking an analytical view of this incident, I realized that nothing can be something when it comes to communication.

The idea that nothing can be something seems counter-intuitive. But remember the famous Sherlock Holmes observation about the dog that didn't bark; the fictitious detective solved a baffling case by noting what did not happen, rather than what did happen.

You can probably come up with several ideas about the importance of communicating even though nothing has changed. That's especially true if you're the one who didn't hear from someone else.

First, you may have made plans that assume either a change in or a continuation of the status quo. Perhaps you're holding off on holiday plans until the issue is resolved one way or the other.

Second, at least you know that an anticipated decision or event hasn't yet occurred, and that you didn't miss something (for example, as I write this I'm waiting for a client to confirm some information and it would be nice to know that I haven't missed a callback or an emailed reply).

Third, if you've received an update telling you nothing has happened, you don't need to contact that person and ask if there have been any developments. Similarly, you can advise the people who look to you for information.

One other note about the 'nothing can be something' idea: It's a variation on what I've called the Everybody Knows syndrome. That refers to a failure to communicate, based on the assumption that others know what I know.

In summary, it's a good idea to report regularly, even if nothing has happened, since others may not know you're still waiting as well.


By Robert F. Abbott

Power Pricing - Getting the Right Price for Your Products and Services

There's an old joke about the New York City blackout. Power was out everywhere, and the electric company couldn't figure out what was wrong or how to fix it. Finally, they decided that the only one who could solve the problem was a long-retired worker who knew the system inside and out. He came out to the power plant, looked around, picked up a hammer and tapped one of the generators.

Suddenly, lights came on all through the area. Overwhelmed with relief that the problem was solved, they asked how much they owed him. "$20,000," he replied. $20,000? For tapping with a hammer? "Well," he said, "tapping with the hammer is $10. Knowing where to tap is worth $19,990."

There are a couple of lessons to be learned from the joke. First of all, the value is higher when the problem still exists than after it has been solved. After all, if told he could restore the power for $20,000, officials would have written him the check immediately, without question. Afterward, the problem wasn't so urgent--it was solved. Quote your price and get agreement while the customer still feels the urgency (and the pain that you will remove). That's when the value is highest to them. Your agreement can include conditions and guarantees, such as the results you will obtain, and deadlines, if they want assurances about results.

Maintain a little mystery. If they hadn't known that all he did was tap with a hammer, his services would have seemed more valuable. After all, they got the result they valued--the power was restored. Focus on the results, not exactly what methodology will be used. Don't let customers look behind the curtain. (Remember the Wizard of Oz?)

If you are the only one who provides a particular product or service, or you have skills or training no one else does, the value of what you offer goes up. Highlight your exclusive set of training, education and experience. Use unique language to describe what you do. You can also create an aura of exclusivity by screening clients, and only accepting those who meet your criteria. This can work if you have a reputation already, but it can also help build your reputation, if you've got the guts to try it!

Consider what your clients are used to paying, and charge at least that much. If your clients are used to paying $100 an hour, and you come in at $50, you probably won't get the job. On the other hand, if you can show that you are worth $150, you may be able to charge more than the going rate.

Another way to get an hourly rate higher than others is to charge by the project, rather than the hour. For example, maybe you charge $150 instead of $100 an hour, but you get the job done in fewer hours. Get the client to look at total cost, rather than hourly rates. Once again, get them focused on results.

This issue comes up all the time in my publishing classes, where I remind students that they are not selling paper. They are selling the information printed on the paper--information that will improve the lives of the people who use it. Paper is cheap. Useful information isn't.

Keep in mind that the value of your product or service is related to the benefits your customers receive, and how they value those benefits. Present what you sell as solutions to problems, and you can charge premium prices for your excellent products and services.

By Cathy Stucker

A One Stop Financial Solution

Amy Wright, 34, was extatic when her realtor showed her the three bedroom townhome overlooking the lushious golf course. It was exactly the home she was looking for. The interior was sunny and bright, with a newly remodeled kitchen, spacious bedrooms, and the perfect little study area to set up her new home office. It had a spectacular pool and a lovingly tended flower garden. Best of all-the seller had to move immediately, so the home was a steal and miraculously within her budget! Amy was already making moving preparations when suddenly, a devastating blow paralyzed her plans. Her credit application for a mortgage had been denied. She couldn't understand how this had happened-just a year ago, her credit had been almost perfect! The last year had been a little tight, and sure she had a few late payments here and there?but she had no idea it was so bad that now she couldn't even get the home of her dreams.

Ms. Wright found herself in the predicament that hundreds of thousands of Americans are suddenly finding themselves stuck in: more debt than they can handle, a sinking credit score, and all of their financial dreams slipping away. With no chance of getting approved for a loan, more bills than a paycheck can manage, and collection agencies hounding delinquent borrowers with phone calls, it is no wonder that financial problems are a top cause for anxiety, stress-related insomnia, and even divorce. Many American consumers don't know where to turn when their financial problems get out of hand, and don't know how to battle such corporate giants as major credit card companies or credit bureaus to start making their credit wrongs right. To make matters worse, all kinds of internet scams, fraudulent credit repair companies, and money-hungry "debt relief" programs have made consumers wary of turning anywhere for help.

Amidst all of these truly leery companies, however, there are a select few that can genuinely assist their customers in climbing out of debt, and directing them towards the financial solutions they desperately need. One such company is Credit MD, a company that has earned its reputation by handling its customers with honesty, sincerity, and expertise. You can immediately distinguish Credit MD from the many illegitimate credit repair companies out there because they never make false promises that hey cannot keep. The credit specialists at Credit MD have been trained to be clear and distinct about exactly what options are available to their clients, and what kind of success they can expect.

Credit MD, a credit specialist will assist customers in selecting an appropriate financial option, even if the customer has no idea where to start. After a thorough consultation, the credit specialist works with the customer to come up with a uniquely tailored financial solution that will help restore the customer's credit. As an affiliate company with many other lenders and credit services, Credit MD, offers a full array of credit options for customers that are in desperate need of financial relief. Among these options are sub-prime personal and business loans, credit cards, credit repair services, and debt consolidation and settlement plans.

The loans and credit cards Credit MD offers are specifically designed for customers with less than perfect credit. Getting approved through these lenders presents customers with the opportunity to start rebuilding good credit. Many customers can get approvals through Credit MD's affiliate lenders even if they were denied by other companies on the internet.

A recent study found that more than 3 in 5 consumers have negative information in their credit report, and nearly half of the studied reports contained errors. Many of the errors were serious enough to prevent the individual from qualifying for credit! To further entrap customers suffering from such erroneous credit reporting, dozens of highly dishonest "credit repair" agencies have reared their heads across the country. Dan Walsh was one their victims. "They told me they would make my credit perfect, and take all of the negative items off", he said. Instead, he got charged almost $5,000 with very little change to his report. Many of these credit agencies employ inexperienced associates and charge exorbitant fees to desperate customers. Credit MD has a fully experienced attorney that works on their credit repair cases. All of this is done at an astonishingly low cost, and absolutely free in some cases. There is never an up front cost to the customer, a feature that few, if any other credit repair companies can match. In fact, Credit MD refuses to even take cases unless they genuinely feel that they can significantly help the customer. Now that's credibility.

For customers sinking in debt, bankruptcy often seems like the only resort. But sometimes a last minute debt consolidation or debt settlement can save the deep impact the damages from a bankruptcy can cause. Credit MD assists customer in exploring these options, as well as several others, such as home improvement loans and home equity lines. Although there are many other companies on the web offering similar services, beware of internet scams and companies that ask for upfront payments or credit card information.

Even if you just want to know what your credit report has to say about you, Credit MD is an excellent financial resource for any customer seeking to explore their financial options or seek debt relief. Credit MD outshines its competition with premier customer service. They don't have annoying automated telephone systems, or lengthy hold times. It is easy to get in touch with an enthusiastic credit specialist promptly-a huge relief in today's busy world. With so many online scams, it's important to know a company that has qualifications and a reputation you can trust. For more information, call Credit MD at 1-877-512-7334 or visit their website at www.creditmd.com

By Sakina Walsh

Negotiating Skills Will Get You Ahead

Negotiating skills can help you manage lots of different kinds of life situations, both at work and in your personal relationships. Here are a few examples of where these skills can help you build an even better life for yourself:

1. Many family situations require negotiating with others. Deciding which movie to see, planning how to spend money, choosing a vacation spot, and many other decisions work best when you have these skills.

2. Being a good negotiator enables you to get what you want more often without resorting to becoming aggressive or pushy. Negotiating with others is more effective than simply demanding what you want or just caving in.

3. You will be more successful in the workplace if you know how to negotiate. These skills enable you to stand up for yourself and get what you want more often without harming relationships with bosses and coworkers.

4. Negotiation skills increase your personal effectiveness in any group situation, such as volunteer groups, the PTO, and church or synagogue groups.

5. Knowing how to negotiate lessens the chances that others will take advantage of you.

6. Negotiating a fair solution makes you feel good about yourself and increases others' respect for you.

What Successful Negotiators Do

What exactly is negotiation? It is a set of skills that anyone can learn. When researchers have observed the behavior of negotiators, they learned that the most successful negotiators do the following things:

1. They plan ahead. Successful negotiations are rarely spontaneous. Taking the time to analyze the situation and think through your strategy is perhaps the most important element of negotiating success. This is true whether you are negotiating an important contract for your employer or negotiating your vacation plans with your family. Example: Anthony wants to begin running again to get into better physical shape. He became a new father 18 months ago and has had no time to exercise. He anticipates that Belinda, his wife, will resist any discussion of his wanting to take time for himself, since the responsibilities of parenthood are so time-consuming. For a while, he avoids the subject, fearing that it will turn into an argument. Then he starts to feel angry and resentful. He decides to negotiate with Belinda and begins by making a list of his needs and wants, as well as her needs and wants.

2. They are willing to consider a wide range of outcomes and options rather than rigidly insisting on a specific result. Negotiators who are most successful are open-minded and avoid being locked in to one outcome. They are willing to consider many possibilities and combinations of options.

Example: Lisa is feeling very stressed by the long commute to her job. She was thinking of resigning until she decided to make a list of other options. She came up with several alternatives: working from home two days a week, working part-time rather than full-time, working flexible hours to avoid rush hour traffic, and working from home every fourth week.

3. They look for common ground rather than areas of conflict. Pointing out areas where you and the other person are already in agreement conveys an attitude of cooperation and lessens any feeling of opposition.

Example: Sandy wants her next car to be a Volvo because of their reputation for safety. George wants a sports car. She says, "Let's talk about what we agree on. First, we both agree that the car has to have a strong safety record. Second, we want to buy a new car, not a used one like last time. And third, we've set our price range as $40,000 or less."

4. They discuss the key issues in order of priority. Have a clear idea of what the two or three key issues are and which is the most important. Start with the most important issues and proceed to those that matter less. If you can reach agreement on the most important things, the lesser issues will most likely be easier to resolve. Example: Carol wants her next family vacation to be something really special-either a Caribbean cruise or a trip to San Francisco. She and her family have visited relatives or stayed at home for the past few years. She wants the family to have an experience they will always remember before Todd, their adolescent son, grow ups and moves away. She sees the key issues as follows: (1) There are only three years left before Todd leaves. He is not likely to join us for a vacation after he finishes school; (2) It is important to have an exceptional vacation at least once in your life; (3) If we plan ahead and save the money, we will be able to afford the cost of such a trip.

5. Skillful negotiators avoid behavior that the other person is likely to consider annoying. This includes any of the following kinds of behavior: having an aggressive or intimidating manner, using sarcasm, using negative body language, or talking loudly. Not only do skilled negotiators avoid such behavior, they work hard at conveying an attitude of cooperation, reasonableness, openness, and friendliness. Example: Jed is negotiating the details of his new job with his new employer in the Chicago area. When Jed moves from Memphis to Chicago to begin work, he wants Sarah, his new boss, to give him three paid days off to get settled in his new apartment. Sarah is resisting the idea. Jed says, "I thought you would be more understanding about what it takes to get settled. A reasonable person would see that this is a small request." This sarcastic remark is likely to create some doubts in Sarah's mind rather than convince her to give Jed what he wants.

6. Good negotiators avoid participating in a defend/attack spiral. You know what this sounds like:

A attacks B

B defends herself and attacks A

A defends herself and attacks B

B defends herself and attacks A

We've all experienced being caught in one of these spirals and know how nonproductive they are. Rather than perpetuating such a process, the successful negotiator puts a stop to it by choosing not to say anything that would be perceived as aggressive or defensive.

Example A

Jim: "I can't believe you are being so rigid."

Anne: "Rigid! You should talk! You are completely bull-headed."

Jim: "Right! You should try listening to yourself. You are impossible."

Example B

Jim: "I can't believe you are being so rigid." Anne: "You're not happy with what I've asked for." Jim: "You're damn right! You have to consider what I want." Anne: "Tell me more about it, then. I'll be happy to listen."

In example A, Jim and Anne dig themselves in deeper with each statement. In example B, Anne blocks the defend/attack spiral and makes it possible for communication to resume.

With practice, you can learn to use these simple skills to get more of what you want in life-without coming across like a bully. In fact, these skills help you reach agreements that are more likely to satisfy both parties while maintaining a positive relationship. Try them in your work life or at home-they work equally well in either setting.

By Garrett Coan

Dont Be Afraid Of Silence

In any conversation with two or more people, there is a tendency to want to talk all the time to fill any awkward silences or gaps that appear in a conversation.

However, if you think of the conversations that you have with your closest friends or family, you will notice that there isn't the same need to fill these gaps, as silences between you are comfortable. This is generally because you know the other person and the type of character that they are.

Now, if we change this scenario to the sales process you will see that it is a completely different feeling to the one above. Suddenly silence is your worst enemy, the one thing to be avoided during negotiations, the realisation that you are losing the sale.

Well actually, that last statement is completely wrong!

Because a person does not say too much during negotiations does not mean that you are losing the sale. Yes, silence can be awkward to some but to those of you who want to win, silence can be your best friend.

During the negotiations, you will ask your customer a number of open questions and that is absolutely the right thing to do. However once you have asked the question, DO NOT fill the space! Resist the temptation to put words into their mouth.

In other words:

"Ask your open question and then say absolutely nothing until they have replied"

No matter how awkward it becomes or how uncomfortable it may seem, leave your customer to reply. If it takes 5 minutes then so be it. They MUST be allowed to reply in their own time without any help from you.

The reason I am pushing this point is that customers (and people in general) do not like silence. They particularly do not like long silences and they feel that they have to fill the space up with words. Before you know it they have committed to all sorts of things.

So, don't be afraid of the silence and let your customers talk their way into your sale.

By Mark Anthony Harrison

Negotiating Skills: Ask For More Than You Expect To Get

It creates some negotiating room, and you might just get what you're asking for.

Whether playing the role of buyer or seller in a sales transaction, asking for more than you expect to get is a classic opening position in negotiations.

In the audio book, "Sound Advice on Negotiating Skills," author Roger Dawson says, "Henry Kissinger called this the key to success at the bargaining table." It's simple, notes Dawson, but there are many profound reasons for doing it.

"It creates some negotiating room that makes it easier to get what you really want," says Dawson. "It creates a climate where the other person can have a win with you." This climate can prevent negotiating deadlocks, especially when dealing with an egotistical negotiator, according to Dawson.

"When you're selling, it raises the perceived value of your product or service," says Dawson. However, some salespeople are so eager to reach agreement that they soften their opening negotiating position. "They hope that by doing this the client will appreciate how generous they've been," says Dawson. "The danger in this is that the client may instead think, 'If they've given us this much, we can get a lot more; let's be tough negotiators.'"

The solution, says Dawson - a renowned speaker and author of the book, "Secrets of Power Negotiating for Salespeople" - is to "ask for more than you expect to get, but imply some flexibility so that you can encourage them to negotiate with you."


By Richard Cunningham