Most business professionals have taken a class or read a book to sharpen their negotiating skills. Unfortunately, what's often taught is how to bargain versus how to negotiate -- and the two are vastly different. Bargaining is about determining who's right, whereas negotiating is about determining what's right.
If you're fighting for who's right, by definition, someone loses. Why would a new customer of yours, who just felt beaten down through negotiation, want to work with your firm long-term? You may win this time, but what are the odds that they will buy again, renew their agreement with you, or refer you?
A nationally recognized expert on the art of negotiation, Jack Kaine, is a motivational speaker and hired gun recruited by corporations across the globe for his counsel through tough business negotiations. His negotiating philosophy is this: in order for both parties to win, you must enlarge versus divide the pie. That can mean simply adding value to what you're bringing to the table, versus cutting your price.
Let's say you sell luxury automobiles and a regular customer of yours says he is going to buy from the dealership in a nearby city because their cost is five percent lower. Especially given that you're selling an upscale product, the last strategy you want to employ is discounting. If you do, you're training your customers to bargain with you.
Instead, ask if the competing dealership offers free oil changes for life as well as loaner cars should you ever have a repair. If that doesn't close the deal, you might also offer free tires for life -- knowing that most high-end car buyers sell their vehicles long before they ever need new tires. The perceived value in what you've added to the negotiation is high, but your actual cost is much lower than the five percent discount requested. Besides this, you've maintained your price integrity.
It's important that you look at yourself as a problem solver versus a negotiator. You're there to ask the right questions that uncover what the other party needs to feel satisfied with to complete the negotiation and then to ultimately find a way to deliver that -- perhaps in a entirely unexpected way. Remember: the objective is not to win. It's to walk away with a deal that works for both parties.
Check back next week for the top ten must-have negotiating skills that will ensure you close more deals while strengthening relationships with customers along the way.
Lori Turner-Wilson is an award-winning columnist and CEO/Founder of RedRover Sales & Marketing in Memphis, TN, www.redrovercompany.com. You can follow RedRover on Twitter (@redrovercompany and @loriturner) and Facebook (facebook.com/redrovercompany).