Negoitation skill for business marketing

1. T R A I N I N G
NEGOTIATION SKILLS

2. 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.

3. Content
 What is Negotiation?
 Negotiating with Prospects and Customers
 Negotiation Strategies
 Communication Skills

4. What is Negotiation?
Negotiation is a strategic discussion that resolves an issue in a
way that both parties find acceptable.

5. 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.

6. Why negotiate
Negotiations 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

7. 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?

8. Because of Customer Attitudes
 A customer’s attitude toward your product or service
generally falls into one of four categories.....
 Objection
 Indifference
 Skepticism
 Acceptance

9. Customer Attitudes
Acceptance :
Customer
agrees with
your benefits
and has no
negative
feelings toward
your product
Skepticism :
Customer is
interested in a
particular
benefit, but
doubts
whether your
product can
really provide
the benefit
Objection :
Customer
displays
opposition to
your product
Indifference:
Customer
shows a lack of
interest in your
product
because of no
perceived need
for its benefits

10. 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.

11. Negotiating with Prospects and
Customers

12. 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?

13. 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

14. 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.

15.  Avoid negotiating unless you have
had an opportunity to fully present
your products and services
 Understand the objections raised
by your prospect and identify what
your prospect or customer’s main
points of interest may be based on
these objections
 Be prepared to illustrate how your
offering will benefit them and
quantify the value they will get
(if possible)
 Be prepared to be patient (which
can lead to higher trust between
you and your prospect)
 Be confident in the value your
product or service will provide
your prospect
 Be prepared to work toward a
solution that works for both you
and your prospect
 Know in advance at what point the
negotiation is no longer beneficial
to you and your organisation and
be prepared to walk away
Before negotiation begins...
Negotiating with prospects and customers

16.  Use open ended questions to
confirm your understanding of
their needs.
 Be prepared for tactical responses
from prospects and customers –
such as exclamations after you
explain the terms of your service
(eh, aba! etc) or silence – don’t
react and instead respond with
more questions
 Don’t rush to fill pauses with more
talk – be comfortable with
moments of silence
 Listen
 Be prepared to make slight
adjustments for your prospect if
possible eg. Adjust the
product/service offering, loan
payment terms etc.
 Try to identify small things you
have both agreed on to help
develop positive momentum –
summarize these agreements
periodically
During negotiation...
Negotiating with prospects and customers

17.  If you are able to make a sale…
 Summarize verbally and/or in
writing the details of what you and
the customer have agreed on as the
terms of the service.
 Thank the customer/ prospect for
their time and reinforce the
purchase decision
 For your next negotiation, review
the points that seemed to help move
the negotiation process forward –
study them, know them, use them
 If you did not make a sale…
 Sincerely thank the prospect for
their time
 Avoid appearing annoyed or
disappointed
 Give the prospect an “out” or an
opening for them to come back to
you/your organisation in the future
(have this statement prepared)
 For your next negotiation, review
the points that seemed to prevent
the negotiation process from moving
forward – study them, know them,
and act accordingly
After the negotiation...
Negotiating with prospects and customers

18. 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 wouldn't be any need
for salespeople
 The first person who reached the prospect would make the sale
 Serious negotiations seldom begin until the prospect's
objections surface

19. 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

20. 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.

21. Handling objections and resistance
 Identifying and negotiating the prospect's 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?

22. Negotiation outcomes
PROSPECT
SALESPERSON
Win Lose
Win Both the prospect and the sales
person are satisfied with the terms
of the sale and a good business
relationship develops
The salesperson is satisfied with
the sale but the prospect is not.
He may even feel manipulated
or taken advantage of. The
business relationship is in
trouble
Lose The prospect is satisfied with the
sale but the sales person feels
manipulated and may reciprocate in
future negotiations or reduce
customer service. The business
relationship is in trouble.
Both parties are dissatisfied with
the sale thus the bond of trust
between them may be so
damaged that they are unlikely
to enter into any future business
relationship.

23. 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.

24. Negotiation Strategies

25. 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.

26. Negotiation Strategies
Strategy Approach
Vinegar – Honey
Start with the cheapest possible
product or service but one
which still has benefits for the
prospect.
Akosua approaches one of her
prospects and informs him that
he can access a loan with very
little effort – she goes ahead to
explain the procedure for
obtaining a loan from her
organization.
Practice with the
cheapest
product/service on your
listing.

27. Negotiation Strategies
Strategy Approach
Pinpoint the need
Focus on the need ie. Why a loan
will be beneficial to the prospect
and enumerate the benefits s/he
would derive from the loan.
Akosua’s prospect appears
skeptical about the process and
indicates so, stressing that he
knew people who had been made
similar promises but went
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.

28. Negotiation Strategies
Strategy Approach
Challenge
The prospect throws a challenge
at Akosua in an effort to win
some concessions.
The prospect goes quiet for a
while then tells Akosua that he
needs a loan of GHC 5,000 but
wants to be able to negotiate the
terms of payment because he
knows two people from his office
who got a similar deal.

29. Negotiation Strategies
Strategy Approach
Limited Authority
Limited authority is an attempt to
postpone the decision on a
pretext to get approval from a
competent authority. Whereas the
real aim is to gain time for
reconsideration, and/or keeping
the prospect still interested in the
service for a reasonable period of
time until a win-win situation is
achieved.
Akosua says, ‘those two people
you are referring to took huge
loans and so were given the
opportunity to negotiate their
terms of payment’ . But she
indicates that she will speak to
her boss about it.

30. Negotiation Strategies
Strategy Approach
Good Guy/Bad Guy
The good guy / bad guy is an
internationally used strategy. One
member of a team takes a hard line
approach while other member is
friendly and easy to deal with.
When bad guy steps out for a few
minutes, the good guy offers the deal
that under the circumstances seems too
good to refuse. Bad guys usually
comprise spouses, lawyers etc.
Based on your
experience on the
field, how would
you act out the good
guy/bad guy
strategy to your
favour?

31. Negotiation Strategies
Strategy Approach
Defer
Deferring strategy allows the
negotiators time to reevaluate
their positions. Deferring a
decision often proves that
patience pays.
Please excuse us while we discuss
ways in which we might provide
you a better offer. Would you
please reevaluate your position
too?

32. 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.

33. Communication Skills

34. 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

35. 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.

36. 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.

37. 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.

38. 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.

39. 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.

40. 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.

41. Non-verbal
Communication
VibesSymbolic
How something is said
instead of what is said i.e.
volume, rate and rhythm,
silent pauses, sighs etc.
Facial expressions, body
gestures, dress etc.
KinesicsParalanguage
Feelings and
emotions received
from others through
their body actions

42. Non-verbal communication
Body Language What it could mean
Avoiding eye contact Lack of confidence in bargaining
position
Making excessive eye contact Trying to bully or intimidate
Fiddling with objects such as hair,
pencils, or papers
Lack of confidence
Crossing and uncrossing the legs Impatient
Keeping legs and arms crossed Not receptive

43. 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?

44. The Ball is in Your Court…
 Go on and practice these negotiation strategies to
become effective sales people!!!

45. Reciprocity
 An arrangement unique to business
marketing in which two organizations agree
to buy from each other.
 Example B2B