The ultimate objective is to close the sale on your first visit with a buyer. However, this is unlikely to happen, particularly for a large order. The negotiating process begins when you try to close the sale and the buyer disagrees with, or objects to one or more of your terms or conditions. Start the negotiating process by asking questions. Find out as much as you can about the other side’s concerns (do not refer to them as objections). Why did the buyer not accept your initial proposal? How far apart are your positions? If close, can you split the difference?

Some pundits recommend you negotiate on one issue at a time. When you have reached some agreement on the first concern – i.e., your price — turn your attention to another topic such as delivery, and then to another such as exclusivity. On the other hand, when only one issue remains on the table, both sides behave as if it is the most important issue. When you move to the second concern, it appears to be the most critical. Often it is better to negotiate multiple issues simultaneously. That is, identify all the issues up front and put everything on the table at the same time. Then go back and forth, perhaps trading one off against the other.

Many negotiations go awry because the two parties incorrectly assume that they understand the other’s motivation and therefore do not explore further. Negotiate as if you are a crime-scene detective, learning as much as you can about the other people involved and what is important to them (i.e., what is their ultimate objective and what are their criteria for reaching it). There are five principles that you may find helpful when doing this.

1) Discuss not only what your counterparts want, but find out why they want it, or why they do not. Let’s say you are negotiating a large-quantity sale with a buyer at a company that wants to use your book as a premium to increase its sales. You have agreed upon a price that is satisfactory to both parties, but the buyer is still balking at signing the agreement. Uncover the hidden objection by asking a series of questions. The bottleneck may not be price or quantity, but timing.

Begin by enumerating areas of agreement. “We’ve agreed that using this book as a premium can help your company increase sales significantly above its cost. Correct? And we’ve agreed that the price is fair, right? Is it accurate to say that the shipping charges are acceptable, and the delivery date coincides with the promotional blitz you intend to conduct in November? Then what is it that is keeping us from agreeing to this proposal today?

Here, the prospect might say, “Yes, all that is correct. But my budget is shot for the rest of the year. I can’t spend any more money until January 1 of next year.”

You could reply, “You mean that if we can delay payment of the books and the shipping charges until next year, you will OK the agreement today?”

If the person says “yes,” you have the order. You are now getting the person to agree only to a lesser point. He or she is no longer discussing the price or quantity, but the timing of the check to send you. You can then arrange one of several solutions: 1) delayed billing from your printer, 2) an invoice presented today but dated January 1st, 3) acceptance now of a check dated January 1st of next year or 4) any other mutually agreeable solution that will get the books into the company’s hands.

Add a % for your “trouble” such as 1) a price increase to cover the interest your printer will charge you for extended billing, or 2) an added bonus of X% if sales of the company’s sales exceed the forecast by a specified amount, or something else that increases your revenue by making the concession.

2) Seek to understand and mitigate the other side’s unease. Two key issues in most negotiations are price and delivery date. Buyers want to pay a low price and get quick delivery for a large-quantity order. As the seller, you want a higher price and more time to deliver. Assume you eventually agree on a price and delivery date in three months. But what if you note anxiety on the customer’s face and ask what is wrong? With further probing you may discover that if delivery is delayed and books are received in more than three months the company will miss an important promotion period and would lose significant revenue. More importantly, the buyer will be blamed.

Congratulations. Now that you have the hidden objection on the table you can begin to create a solution. You know that you can print the books and most likely deliver them in three months. But that is not good enough. You could ask the buyer if the company has discounted shipping agreements with trucking firms. If the answer is yes, suggest that they pay for shipping with their trucker with guaranteed delivery in less than three months.

You may be better off in several ways. First, the shipping cost is probably less than the loss exposure, so there is no change in the price. In actuality it increases your revenue since you are no longer paying for shipping. Second, you have made your contact very happy, opening the door for future business. And three, you are no longer responsible for glitches in shipping.

3) Interpret demands as opportunities. What if your prospect does not have the shipping solution? How can you still reach a win/win conclusion? You might offer to pay a penalty if the books are delivered late. That would probably catch them off guard and make them feel as if you really want to work with them. While your contact is still debating your proposal, add that you also want a bonus if the books are delivered early.

4) Create common ground with adversaries. Continuing with the example above, what if they remain adamant that they must have delivery in three months, and the penalty would not compensate for their potential loss? Try another tactic by asking if they must have all the books delivered on that date; You may be able to guarantee a partial shipment before then, perhaps with a bonus for a compete delivery.

5) Continue to probe even after a deal is lost. If you lose the order, follow up by asking why you did not get the order. In a bidding situation, you may have had the low price, but did not mention some needed service or feature. Always ask for constructive feedback by saying something like,  “What would it have taken for us to reach agreement?” It might be something you can accommodate such as providing the content in another form, making the books returnable, or offering a larger quantity discount.

For example, let’s say you have content that a company wanted to use in its training workshops. Since your book is perfect bound, it won’t lay flat on the table during the classes. Make a revised offer with your books produced with a wire or comb binding that would lay flat.

Be patient.
It takes time for these relationships to develop, perhaps six months or more. Also, the purchasing process in large companies can be ponderous. Work with them to set up a time line to introduce your proposal, and then help them abide by it.  As Ralph Waldo Emerson said, “The game requires coolness, right reasoning, promptness and patience in the players.”

Last 5 posts by Brian Jud

• The Path to Successful Special Sales - August 25th, 2008
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• Focus on Non-traditional Marketing - April 17th, 2008
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• Goals are Worthless… - February 11th, 2008