ME’s B2B Summit 2019 brought together several professionals and interesting lectures for the B2B procurement and sales public.
“Negotiation: tactics and tricks that you may never have noticed” was one of the themes addressed at the event. After all, knowing how to negotiate is a strategic distinguishing point, which is very important for businesses.
This lecture was delivered by Alex Leite, Education Director at Live University. The participants had a real lesson on negotiation – and, in this post, you will discover 5 tactics and tricks to achieve the best results in the art of negotiation.
Keep on reading!
The importance of negotiation
Negotiation is the art of resolving conflicts through dialogue, and there is no denying its importance within the companies.
Negotiations take place every day, focusing on price, quality, delivery, speed and so many other important factors that allow an organization to stay competitive in the market.
But even being such an old practice, it isn’t always easy to put it into effect, particularly in times of financial and political instability.
Knowing how to negotiate can be a game changer to sell more and retain customers.
Negotiating professionals have to master all techniques thoroughly. Additionally, they must also know how to deal with people of different profiles.
And here lies the question: do you really know all the tricks?
5 negotiation tactics and tricks to start using right away
Alex’s lecture was delivered in a game format, in which the audience could participate through their cell phones from beginning to end.
Participants had to answer eight questions about negotiation, to see who knew more on the subject. A winner was selected at the end, and received a Xiaomi Amazfit bip a1608 Smartwatch as a prize.
See now the 5 key steps to be a B2B negotiation expert.
1. Planning is the most important step in a negotiation
It’s difficult to achieve good results in a negotiation without previous planning.
If you don’t have a goal, don’t know the other party in the negotiation process, don’t know the limit price to be reached, and what the most important items are, the negotiation will be eventually driven much more by emotion than by reason. This causes the company to lose both money and opportunities to close good deals.
So rule number 1 is: you must always plan before starting a negotiation.
2. Define the negotiable items (price, service, delivery, contract, duration, etc.) to apply the trade-off technique
When negotiable items are defined, the buyer will be able to create a trade-off strategy, in which he replaces a question that isn’t relevant to his business with another, more important one.
For instance: you have a full stock of a given product, but want to buy it cheaper. In this case, you can negotiate with your partner, saying that you must receive it within a day or two. Most likely, the supplier won’t be able to meet such deadline. At this point, the buyer accepts the deadline set by the partner, but asks for a rebate due to delivery time.
In this way, you give up something that isn’t so important (due to full stock), and you get a low cost – which was the initial strategy.
3. Beware the “good guy & bad guy” tactic
This is the oldest negotiation technique, where you negotiate in pairs, with a predefined strategy. One negotiator submits the bad part of the business, while the other shows the positive alternatives of that context. In such process, there is always a balance between “the good guy and the bad guy”.
However, you must be very cautious with this technique: if both parties involved in the negotiation are aware of it, the result will be a huge disaster.
Therefore, rule number 3 is: be careful with the other party’s experience level when applying a technique.
4. Never split the difference in a negotiation
During a negotiation, regardless of being a buyer or seller, never split the difference. Once it’s accepted, the negotiator will automatically reveal that there is a margin.
For instance: you are negotiating a product for 1,000 reais and the other party for 500 reais; if the offer to split by 750 is put on the table, don’t accept it – as it will reveal the existence of a margin in that negotiation process.
In such situations, the most correct attitude is to split the offer value (750) by the amount being negotiated (500 or 1,000).
Therefore, you will eventually minimize the margin and still have some profit.
5. Set the value of the zone of possible agreement (ZOPA)
Also known as ZOPA, the zone of possible agreement is extremely important. With it, you can define acceptable minimum and maximum limits to reach an agreement during every negotiation.
Let’s imagine the following scenario: you want to buy a given product, and 9,000 reais is the maximum amount you are willing to pay. However, 8,000 reais would be great and 7,000 would be the perfect deal. On the other hand, you can’t close such deal with more than 9,500 reais. On his side, the supplier wants to sell the product for 10,000 reais, but manages to readjust the value down to 7,500 reais, as below such limit he will start to lose money.
The logic of ZOPA is to take the gap between the buyer’s and supplier’s margins, which results in the zone of possible agreement to negotiate. It isn’t easy to find these margins, as the first meetings are often scheduled to gather information. However, you can get there with patience and good communication.
These were the main insights of Alex Leite’s lecture at ME’s B2B Summit 2019. Leave your comment if you liked this content.
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