Doing business is a series of negotiations. From the moment you plan to start a business to serving your customer, you find yourself negotiating. For most people negotiations brings to mind price, but there are many other areas you must negotiate.
For the service provider, the details of the service, the delivery time-frame and the definition of “complete” are some of the many items that must be determined. For the product company, delivery time-frame, extended warranty, financing options, product specifics (color, options, etc) all must be negotiated.
Negotiations is a required skill all business people must learn and refine. Many experienced business people will tell you they are still learning how to be a better negotiator. For those getting started, here are a few points to consider;
- Some people like to negotiate. It is like a sport to them. Be prepared to spend the necessary time. It is not just about the end goal, it is the process these people enjoy. Don’t hurry them. It will be harder to close the deal.
- Many times a customer request for a price allowance may indicate you have not overcome product objections. Make sure you have dealt with any objections before negotiating price
- Keep your emotions in check and do not make the process personal. This is not about you winning or losing, it is about taking care of the customer. Making the process a win/lose proposition immediately puts you in competition with the customer.
- If you must negotiate price, give up in very small increments. If the customer offers you 25% less, counter with 3% less or some similar amount. First, this lets the customer know you will not be giving up huge amounts. Second, you will quickly find out if the issue is price or product.
- Finally, unlike some in politics, there is no room for absolutes in business. Bluntly stating there is no room for compromise is stating you are not open for business. Stay open to listening and considering offers. Some may be surprisingly beneficial.
Practice your skills of negotiation every day. Not just with customers but with vendors, partners, employees and others you come in contact with. After each encounter, think through what you did, what worked and what you could have done better. This will pay off in the long run.