Provides details on how sales people can negotiate with their prospects and customers to get better deals
Provides details on how sales people can negotiate with their prospects and customers to get better deals
NEGOTIATION SKILLS TRAINING
Objectives At the end of this training, you will be able to Determine the importance of negotiation in the sales process Identify key steps to take at every point in the negotiation process Determine how to use various negotiation strategies to achieve results Use effective communication to achieve good negotiation outcomes.
Content What is Negotiation? Negotiating with Prospects and Customers Negotiation Strategies Communication Skills
What is negotiation? Simply put... the process of getting what you want from another person. The truth is we negotiate every day, everyone in their every day lives is a negotiator. Children negotiate with their parents for things they want. Spouses negotiate with each other over things they should buy or do this weekend eg. go to the funeral, the wedding or take the children to their friend’s party? Subordinates negotiate with their bosses over deadlines. Workers negotiate with their clients over services they can offer them.
Why negotiateNegotiations occur for several reasons: To convince people to take your side of an issue To agree on how to share or divide a limited resource To resolve a problem or dispute between the parties To sell a product or service Sales negotiation
Sales negotiation Sales negotiation can be a formal event at a specific time and date or it can be ongoing at different points in the sales process. As a sales staff you are seeking a mutually beneficial relationship with your prospects and clients, not something that benefits only you or them. Why do you need to negotiate with customers in the first place?
Because of Customer Attitudes A customer’s attitude toward your product or service generally falls into one of four categories..... Objection Indifference Skepticism Acceptance
Customer Attitudes Skepticism : Indifference: Customer is Acceptance : Customer interested in a CustomerObjection : shows a lack of particular agrees with Customer interest in your benefit, but your benefits displays product doubts and has noopposition to because of no whether your negativeyour product perceived need product can feelings toward for its benefits really provide your product the benefit
S0 why do you need negotiation skills?... To be able to change customer attitudes towards your products and services; Bottom line • ....... To win more Customers and improve profits for your organisation.
Negotiating with prospects and customers Negotiation with prospects and customers must be undertaken within the context of the sales process. Where inadequate prospecting, pre sales preparation and planning is done, negotiation is likely to be unsuccessful. So what does the sales process entail?
Overview of the sales process 1. Prospecting and qualifying 2. Planning the sales call: The pre approach 3. Approaching the prospect 4. Sales presentation and demonstration 5. Negotiating resistance and objections 6. Confirming and closing the sale 7. Following up and providing after sales service
Overview of the sales process Negotiation with the prospect usually begins after you have had the opportunity to present your products and services or after step 4 in the sales process. At this point, you will be able to gauge whether the prospect objects is indifferent is skeptical or accepts your product or service Based on your assessment of the situation, you can then begin to negotiate.
Negotiating with prospects and customers Before negotiation begins... Avoid negotiating unless you have Be prepared to be patient (which had an opportunity to fully present can lead to higher trust between your products and services you and your prospect) Understand the objections raised Be confident in the value your by your prospect and identify what product or service will provide your prospect or customer’s main your prospect points of interest may be based on Be prepared to work toward a these objections solution that works for both you and your prospect Be prepared to illustrate how your offering will benefit them and Know in advance at what point the quantify the value they will get negotiation is no longer beneficial (if possible) to you and your organisation and be prepared to walk away
Negotiating with prospects and customers During negotiation... Use open ended questions to Listen confirm your understanding of their needs. Be prepared to make slight Be prepared for tactical responses adjustments for your prospect if from prospects and customers – possible eg. Adjust the such as exclamations after you product/service offering, loan explain the terms of your service payment terms etc. (eh, aba! etc) or silence – don’t react and instead respond with Try to identify small things you more questions have both agreed on to help Don’t rush to fill pauses with more develop positive momentum – talk – be comfortable with summarize these agreements moments of silence periodically
Negotiating with prospects and customers After the negotiation... If you are able to make a sale… If you did not make a sale… Summarize verbally and/or in Sincerely thank the prospect for writing the details of what you and their time the customer have agreed on as the Avoid appearing annoyed or terms of the service. disappointed Give the prospect an “out” or an Thank the customer/ prospect for opening for them to come back to their time and reinforce the you/your organisation in the future purchase decision (have this statement prepared) For your next negotiation, review For your next negotiation, review the points that seemed to prevent the points that seemed to help move the negotiation process from moving the negotiation process forward – forward – study them, know study them, know them, use them them, and act accordingly
Handling objections and resistance Objections can be defined as statements, questions, or actions by the prospect that indicate resistance or an unwillingness to buy . . . at least yet Without sales resistance, there wouldnt be any need for salespeople The first person who reached the prospect would make the sale Serious negotiations seldom begin until the prospects objections surface
Handling objections and resistance Prospects and customers raise objections for a myriad of reasons • Some people will almost always raise objections, even if they really need the product/service • They may be people who naturally raise objections as a matter of buying technique or negotiation strategy • The prospect may seek reassurance that the product/service will perform or yield the benefits promised • A few prospects will raise objections merely to irritate you the salesperson
Handling objections and resistance• Some prospects raise objections so that they can bargain for a better deal. Irrespective of how good your terms may be compared to the competition, some prospects are obsessed with getting an even better deal so that they can feel “victorious.”• Prospects may raise an objection because they have a bias against the your organization or type of service or, in rare cases, simply dislike you the salesperson.
Handling objections and resistance Identifying and negotiating the prospects most important or key objection is the first step to negotiating total prospect resistance. One subtle way is by engaging the prospect in informal conversation before the sales presentation and encouraging him or her to reveal personal concerns and perspectives on problems Which other ways can you think of?
Negotiation outcomes PROSPECT Win Lose Win Both the prospect and the sales The salesperson is satisfied with person are satisfied with the terms the sale but the prospect is not.SALES PERSON of the sale and a good business He may even feel manipulated relationship develops or taken advantage of. The business relationship is in trouble Lose The prospect is satisfied with the Both parties are dissatisfied with sale but the sales person feels the sale thus the bond of trust manipulated and may reciprocate in between them may be so future negotiations or reduce damaged that they are unlikely customer service. The business to enter into any future business relationship is in trouble. relationship.
Common mistakes to be avoided in negotiation Inadequate preparation Use of intimidating behavior Impatience Loss of temper Talking too much, listening too little, and remaining indifferent to body language. Arguing instead of influencing.
Negotiation Strategies There are various well tested strategies that can be used to achieve a win-win outcome, such as those used by Akosua and Ebo as outlined in this section. Akosua and Ebo decide to visit a well known business area to win new clients for their institution. Their first stop is an office located in the area with a lot of staff who are ideal potential clients. Akosua and Ebo intend to introduce their services to them, get them to be interested in the services to the point where they will actually sign on for a service such as open an account and/or take a loan.
Negotiation StrategiesStrategy ApproachVinegar – Honey Akosua approaches one of her prospects and informs him thatStart with the cheapest possible he can access a loan with veryproduct or service but one little effort – she goes ahead towhich still has benefits for the explain the procedure forprospect. obtaining a loan from her organization. Practice with the cheapest product/service on your listing.
Negotiation StrategiesStrategy ApproachPinpoint the need Akosua’s prospect appears skeptical about the process andFocus on the need ie. Why a loan indicates so, stressing that hewill be beneficial to the prospect knew people who had been madeand enumerate the benefits s/he similar promises but wentwould derive from the loan. through a lot of stress to obtain loans. She ignores his comment and begins to highlight the benefits to be derived from such a loan.
Negotiation StrategiesStrategy ApproachChallenge The prospect goes quiet for a while then tells Akosua that heThe prospect throws a challenge needs a loan of GHC 5,000 butat Akosua in an effort to win wants to be able to negotiate thesome concessions. terms of payment because he knows two people from his office who got a similar deal.
Negotiation StrategiesStrategy ApproachLimited Authority Akosua says, ‘those two people you are referring to took hugeLimited authority is an attempt to loans and so were given thepostpone the decision on a opportunity to negotiate theirpretext to get approval from a terms of payment’ . But shecompetent authority. Whereas the indicates that she will speak toreal aim is to gain time for her boss about it.reconsideration, and/or keepingthe prospect still interested in theservice for a reasonable period oftime until a win-win situation isachieved.
Negotiation StrategiesStrategy ApproachGood Guy/Bad GuyThe good guy / bad guy is aninternationally used strategy. One Based on yourmember of a team takes a hard line experience on theapproach while other member is field, how wouldfriendly and easy to deal with. you act out the goodWhen bad guy steps out for a few guy/bad guy strategy to yourminutes, the good guy offers the deal favour?that under the circumstances seems toogood to refuse. Bad guys usuallycomprise spouses, lawyers etc.
Negotiation StrategiesStrategy ApproachDefer Please excuse us while we discussDeferring strategy allows the ways in which we might providenegotiators time to reevaluate you a better offer. Would youtheir positions. Deferring a please reevaluate your positiondecision often proves that too?patience pays.
Negotiation Strategies Keep It Light You never want to let negotiations become too tense. Always feel free to smile and inject some humour in the conversation. Lightening up the mood can ingratiate you with your prospect while also conveying your negotiating strength. If you do not appear to be taking the negotiation as a do or die affair, your prospect may conclude that you are ready to move on if s/he does not cooperate and based on that s/he may decide to be cooperative.
Communication Skills Communication skills are crucial in the kind of negotiations you engage in as field staff. Good communication is the cornerstone of any productive negotiation. Particularly important are Oral communication and Non-verbal communication It is also important that as field staff you are aware of critical cultural norms that exist within your area of operations. Fortunately, the Ghanaian culture does not vary too much from one place to another
Oral Communication Oral communication implies communication through the mouth. It not only refers to speaking but includes the ability to listen as well. Specific examples of oral communication include: Face to face communication in conversation, be it direct or telephone conversation, meetings, interviews, speeches, presentations, discussions etc. Oral communication is significant in building rapport and trust with customers.
Oral Communication When communicating with your prospects and customers Slow down your speech and pronounce your words clearly and correctly. Vary your pitch, tone and volume to emphasize key words or sentences. Adjust the volume of your voice to your audience speak softly but audibly when you are talking one-on-one speak louder when you are talking to a larger group or across a room Be conscious of your speech to avoid filler words such as um, uh, ah, like, well etc.
Oral Communication Organize your thoughts and ideas before speaking (e.g. write notes on what you want to say). Do not interrupt when someone else is speaking. Respond non-verbally to show understanding and interest when communicating nodding your head, smiling etc. Make eye contact when listening or talking to people. Be specific when asking questions and giving answers. Take notes if necessary to help you remember what is being communicated.
Oral Communication Phrase your words properly; it makes a difference. Two priests were so addicted to smoking that they desperately needed to puff on cigarettes even when they prayed. Both decided to ask their superior for permission to smoke. The first asked if it was okay to smoke while praying? Permission was denied. The second priest asked if he was allowed to pray while he was smoking. His superior found his dedication admirable and immediately granted his request.
Listening: a strong negotiation tool! Perhaps the best strategy to adopt while the other side lets off steam is to listen quietly without responding to their attacks. You often get more through listening by finding out what the other person wants than you do by clever arguments supporting what you need. Generally, good techniques of good listening include paying close attention to what is said, asking the other party to spell out carefully and clearly exactly what they mean, requesting that ideas be repeated if there is any ambiguity or uncertainty.
Non-verbal communication When we do not know others, their body language remains the first source of building image about them. What people say may be reinforced or contradicted by the non-verbal cues. When there is no consistency between the verbal and non- verbal communication, people rely on the non-verbal aspect of communication to determine the true meaning of what is being said.
Non-verbal Communication Feelings and emotions received from others through their body actions Symbolic Vibes Paralanguage Kinesics How something is said instead of what is said i.e. Facial expressions, body volume, rate and gestures, dress etc.rhythm, silent pauses, sighs etc.
Non-verbal communicationBody Language What it could meanAvoiding eye contact Lack of confidence in bargaining positionMaking excessive eye contact Trying to bully or intimidateFiddling with objects such as hair, Lack of confidencepencils, or papersCrossing and uncrossing the legs ImpatientKeeping legs and arms crossed Not receptive
Cultural norms Some general Ghanaian norms include: Not using the left hand in communicating with others either to give something to someone or point in a direction etc. Greeting the people we meet wherever we go What are some of the cultural norms in your area of operation?
The Ball is in Your Court… Go on and practice these negotiation strategies to become effective sales people!!!