When it comes to a successful negotiation, which is more important: strategy or skill?
The definition of the verb, negotiate, is to “deal or bargain with others, as in the preparation of a treaty or contract or in preliminaries to a business deal.” In a sales context, the key definition is to “bargain in order to create, or culminate, a business deal.”
Sales professionals are often negotiating with both prospects and clients. We bargain with prospects for access to key decision makers or in our own organizations for additional resources. We make tradeoffs with ourselves in an effort to improve productivity and improve time management. And we negotiate the final terms and conditions of new contracts in order to close business.
At ValueSelling Associates, we are often asked to help our clients negotiate more effectively. We have observed that there are consistent, common traps that torpedo negotiations.
1. Timing: When companies offer incentives to their customers in order to create urgency and persuade prospects to expedite signed contracts. These incentives may be pre-announced price increases, introductory offers, or embellished deliverables. Whatever the incentive, how and when it is communicated becomes critical.
We advise sales professionals NOT to negotiate before the prospect is a fully qualified opportunity. In our Framework®, the qualification process is multidimensional. There are four questions a sales executives should have the prospect answer to determine if they are a qualified opportunity: