In negotiating with a customer, you will be using more traditional negotiation skills, although here, too, it’s important for you to be aware of your customer’s needs. Your own parameters for flexibility may have to be extended, but keep in mind that the final settlement must benefit both of you.
Traditional negotiations may be done between two organizations, usually for financial gain. The intent might be to win a contract to supply a customer, to purchase product at a specific quality and price, or to agree on delivery of goods or services. Negotiations are also done to reach formal, legally binding agreements with a regulatory or other government agency. Finally, managerial negotiations may involve discussions with union members about pay, terms of working conditions, and work output.
As with less traditional negotiations, the first step is to identify all your objectives. Once you have determined your goals, prioritize them into three groups.
- Those that are your ideal
- Those that represent realistic targets
- Those that are the minimum you must fulfill to feel that the negotiation has not been a failure
Abandon any totally unrealistic objectives before you even sit down. Likewise, identify issues that are open to compromise. If you have to give in at any point, it is helpful if you know which objectives you are willing to yield on first. Express all your goals as statements prior to the session. This will make it easier during the actual negotiations to be clear about your desires.
Let’s assume that you are meeting with a potential customer. In negotiating the sale of a product or a service, you have the advantage of being informed about what your company has to offer. Further, you should have studied the customer’s firm to be familiar with its wants and needs. Just as you have identified your own objectives in the negotiations, you should try to identify the opposition’s goals. Prioritize these, as you did your own. Also, consider the opposition’s weaknesses. For instance, if your customer has few vendors from which to purchase product and needs immediate delivery, and if your firm can meet the customer’s delivery needs, you may be able to raise the purchase price.
If a customer has an idea about how his or her needs should be met that does not follow your existing procedure, explain why your method can get the same results faster, better, or cheaper. If not, find out whether your company can concede to some degree to the customer’s wishes.
Depending upon the product being purchased, you might try the “puppy approach.” Those who sell computer software and hardware, for instance, use this ploy, offering customers a trial period during which they can test the product or service. If you have ever acquired a new pet, you will appreciate this tactic’s name. Once you have a new kitten or puppy, would you ever seriously consider giving it back? No. Likewise with most major products. Even if you never thought you needed that new printer that does hundreds of copies in only a few minutes, within a few weeks you will find yourself unwilling to live without it. Vendors know this. So, even if a trial period will cost them, they agree to it because usually such a deal results in a sale.