Best Practices in Negotiation - Is It A Trick?

Jack wanted to sell his kayak, so he listed it online and got a few inquiries.

One couple came over with a truck, a good sign, but the wife criticized the implement in a voice that could be heard down the block.

Surreptitiously, Jack had Googled her name before she arrived. He expected diva-like behavior, having discovered she is an actress in regional theater productions.

Examining the kayak she bellowed to her husband, "I thought it would be LARGER!" He was standing right next to her.

Was her loud lament a negotiation trick or a heartfelt expression of chagrin? Did she hope, by lambasting the item she would lower the price?

Jack thought so, and purposely he elected not to react.

Imperiously, she departed with her spouse. About three minutes later, she returned, rang the bell, strode up to Jack and made an offer that was a third lower than the asking price.

Another ploy?

"Definitely," says Jack, no stranger to the bargaining dance.

"Walking away was her big move," he explained. "It's taught as a tactic in negotiation books. Mistakenly, she thought I would follow her out the door, as if I were running a bazaar!" he quipped.

Another couple expressed interest but canceled an appointment an hour after the agreed meeting time. Phoning, one of the partners mentioned she wanted to photograph the kayak to show it to her husband.

Jack tentatively set a meeting for that purpose, but then recanted, explaining in a note that it made no sense to show it if no offer could be made at the same time.

Was her belated cancellation and then the photo request, tricks?

"If you're serious about buying you cut to the chase, you don't add needless steps to the process," Jake mused.

Expect tricks, gambits, low-ball offers, and delays. Like battles, few negotiations turn out exactly as planned.

As for Best Practices in Negotiation, you can count on this rule of thumb: "If you think it is a trick or a ploy, you're probably right!"

Jack did sell his kayak to the second couple, after establishing this ground rule to lend seriousness to the process: "When you come to see it, bring cash, and a truck!"

They brought the cash.

"Good enough!" Jack smiled.

By : Dr._Gary_S._Goodman

Negotiation - Why You Will Be Lost Without This Skill

The ability to negotiate anything in life can dramatically increase the value you receive for that price you pay. There are some people that love negotiating, while there are plenty of others that is negotiated. Either way, negotiating is the key skill that you want to work on developing in your life.

I once had a friend who really enjoys playing guitars. There was a certain kind of guitar he wanted, I think it was a Les Paul something addition. He knew exactly what it was and what it was worth.

My friend had been saving money for a long while because he wanted to purchase this particular guitar. He looked online and local music stores trying to find the best deal before you purchased the guitar.

I was fortunate enough to be with him on the day he went to a local music store to purchase the guitar he wanted. The music store had about two or three different of these guitars he was looking at. He noticed on one of the guitars that some of the wood had a few scuffed marks on it. This guitar normally went for around $2000.

He had done enough research to know the music store probably paid around $1000 to $1200 for the guitar. The guitar was already marked down to $1750. He went to the salesman and told him he was interested in purchasing the guitar. The negotiations then began.

My friend immediately pointed out the scuffed marks on the wood of the guitar. He knew that this was going to be his leverage point in getting a better price on the guitar. He immediately offered $1300 cash for his walk out the door price.

The salesman had to go check with his boss, the owner of the store, if they could do this deal. The salesman came back and told my friend that he was sorry, but he could not take such a low offer.

For the next hour, my friend kept negotiating with this gentleman, who had to keep going back and forth to his boss in order to ask about the deal my friend was offering. It really became interesting when my friend got to $1450 cash. He offered $1450 cash, as the walk out the door price. The salesman came back and said he could not take $1450.

By this time, my friend decided to try a different strategy in negotiation. He then started to lower his price. So, his next offer was $1440 and a free box of strings. The salesman didn't think twice and headed to ask his boss. He came back and regretfully said he could not take the offer. So my friend made another offer, $1430 and three boxes of strings.

The salesman when check with his boss once again and came back with a no. The next offer however was different. He offered $1420 and five boxes of strings. Oddly enough, the salesman came back and said okay you have a deal.

My friend and I looked at each other in pure amazement. The boxes of strings cost the music store a little bit of money. If you would average out the cost of the strings and the guitar, music store would have been better accepting the cash offer of 1450, much better actually.

The moral of the story is you must learn to negotiate. Humans are very interesting creatures and you never know when you'll get a yes. My friend surely did not think he was going to walk out of the store with a guitar that day. He ended up walking out of the store with a great deal all because he was willing to negotiate.

By : Darius_Maslow

Negotiating Successfully to Collect Your Cash - How Business Professionals Can Avoid Financial Chaos

Regardless of your profession, if you're in business, this could happen to you.

· Clients request services for which they cannot pay.

· You provide services, and then struggle to obtain payment.

· Slow payers strangle your cash flow.

· Payment issues poison your relationships with clients.

It doesn't have to be that way! The way in which you engage a client relationship at the outset of the relationship, to a great degree, dictates what will occur in the relationship. In addition, it dictates how resolutions will come about when there are payment challenges.

This article delves into some of the aspects that you can control to insure you and your clients do not end up in a negative situation, as the result of their inability to compensate you for your services.

1. Know with whom you're dealing:

a. You can avoid financial chaos by not dealing with some people and/or organizations. Just because someone wants to conduct business with you, doesn't mean they're a fit for your business. If they admit to having financial challenges during your initial meeting, you should consider the benefits of doing business with them and the potential hardship that such actions may have on your business.

b. Weigh the current financial situation of your business associate and assess the possibility that there may be a future 'payment' issue. If it appears that such a situation may loom, install 'safe guards' (i.e. collecting more funds up front, keeping the client on a shorter time payment leash, keep a watchful eye on the fact that there may be payment issues associated with the account and pounce the moment such issues become prevalent). In essence, ask yourself if you have the will power, staying power, and firepower (resources) to chase a debtor.

2. Establish Rapport:

a. Once you've assessed the potential risk of a financial default, and you decide to engage in a business relationship with the person, create a mutual relationship built on trust, respect, and the fact that you need to have funds to keep your business running. Set the expectation at the outset of the relationship that you expect your business associate to be a good payer.

b. In creating a genuine bond with your client, don't allow the client's financial problems to instill financial chaos into your business. In essence, don't inject empathy into the relationship when the client begins to tell you their financial tales of woe. During such times, you're setting the course for the relationship and how interactions will occur. Set the stage appropriately.

3. Recognize Excuses:

a. When some clients are on the verge of experiencing financial challenges, they may begin to hoard resources in an attempt to sustain their own livelihood. It's at this point that you must become insistent about receiving payment and putting a process in place to monitor future payments. Don't be caught up in giving more services, with the thought that if you don't, it will hasten the demise of your client's operations.

b. Discover body language (nonverbal communication) reading techniques. By possessing the ability to read body language, in person and over the phone, you can gain insight into thoughts that a client may not verbally disclose. Such insight will allow you to have a better glimpse into the real situation with which they may be dealing.

4. Use Negotiation Strategies:

a. You can employ numerous negotiation strategies to counter strategies that a client might present, in addressing his payment situation; the more strategies you're aware of, and how to use them in the appropriate situation(s), the better positioned you'll be to thwart the actions of a client that may have funds, but wish to apply them for other purposes.

b. Identify points upon which you can apply leverage and avoid financial chaos. As you progress in the relationship with your client, be attuned to opportunities where you may be able to apply points of pressure, should a lack of payment situation make such actions necessary (e.g. if the client doesn't want everyone to know they have a payment situation, you may consider informing him that it's your responsibility to report such occurrences).

c. Offer a promotion that gives the client a payback bonus (rebate), at the end of a specified period. The rebate becomes effective if the client submits funds, in the manner specified by the agreement (note: this becomes a cost of doing business, which gets incorporated in your overall pricing).

Client relations can be strained when payments issue arise, which could cause your business to incur financial hardships. In order to avoid such situations, choose your clients the way you'd choose your friends. Plus, always keep in mind that a certain amount of business will go bad.

Thus, the better you manage the potential for bad clients, the more enhanced your bottom line will become... and everything will be right with the world. Remember, you're always negotiating.

The Negotiation Tips Are...

· Learn to strike a balance between disagreeing and being disagreeable. Try never to create a situation that becomes unmanageable, due to slow or nonpayment. Maintain an attitude that conveys the belief that your client will do his best to submit payments on time.

· To the degree you can, engage the client as a friend, while maintaining the integrity of the business relationship. If a point occurs when you must discuss a payment situation, personalize yourself and speak from the financial discomfort (use appropriate 'word(s)' for your situation) that such an occurrence will have on you and your business.

· In considering with whom you'll do business, think about the potential future ramifications of engaging in a business relationship with any entity. In some case, there may be stop signs at the outset.

By : Greg_Williams

How to Choose the Best Negotiation Strategy to Close the Deal

When choosing which negotiation strategy would be the best in a particular business negotiation setting, there are two things that need to be taken in to consideration. The first is what you and your prospective client would be discussing during the meeting.

If, for example, you are planning to offer a certain line of services and products to a potential client to their current business needs, the integrative bargaining is the best strategy to use. This particular business strategy takes into consideration what are the current needs of the client.

From here, both parties involved in the business negotiation sit down and discuss the most profitable option that is available for both parties based on the demand required by the client and the expenses that your business will incur in order to provide these.

On the other hand, there are some business negotiations that involved discussing a fixed position or idea, such as the price of a specific product or service that you are offering to your client, the best negotiation strategy to use here is positional bargaining.

Unlike the integrative bargaining where the wants and needs of both parties would need to be taken into consideration, in positional bargaining, these wants and needs are set aside and bear no weight in the negotiation.

As such, this business negotiation strategy tends to be a lot more aggressive than the integrative bargaining strategy. It is also the most common type of negotiation that commonly occurs within most industries, specifically the manufacturing and production industries.

Another thing to be taken into consideration is who you will be negotiating with. With globalization now the current trend in today's corporate world, it is quite common for business entrepreneurs to become involved in cross-cultural business negotiations.

That being the case, it is important to remember that there are certain business practices that may be considered common in your culture that would sound to be outrageous to another.

If you find yourself having to handle a business negotiation with a client that practices a different culture, the best strategy to do here is to utilize the most comfortable manner of business negotiation observed by your potential client. This would not only let them become more comfortable, but also more open to doing business with you.

By : Grant_Shields

The Negotiation Nibble

A year and a half ago I purchased a new stove for our kitchen from Best Buy. I'd seen the one I wanted on sale, so I went back with a friend and his truck to make the purchase. The stove I wanted was no longer on sale. "No problem," I thought.

One of the rules of negotiation is to ask for what you want. I asked the salesperson if he would sell me the stove for the price it had been on sale for the week earlier. He told me he'd have to call his supervisor, which he did.

When the supervisor came out, I asked him if I could have the stove for the earlier sale price. He went in the back and came back with the older sale prices and agreed to sell it to me for that lower amount. Not bad, but I didn't stop there. I'd achieved what I wanted, but I also wanted to try a "nibble."

Now, before I go on, I realize that many people in America frown on nibbling. Some think it is cheap or demeaning. However, it's an accepted business practice in many cultures. It is a negotiation tactic, and one that has been around for a long time.

The answer to the question of whether you should nibble or not, will depend on your specific situation and your business judgment. At Best Buy, I wanted to try the tactic out. It just happened that at the time I was buying the stove, a CD I was interested had just come out.

So after the supervisor reduced the price to that of the earlier sale, I asked him if he would throw in the CD for free, since I was buying such a big item. He agreed, and I got a CD with my nibble technique. (I also got a story that I knew I'd use in my trainings and writings).

Asking a tailor which tie he is going to throw in with your suit purchase is another example of nibbling. Another example might be asking for an accessory when purchasing a new car. Nibbling works because you are so close to a deal, and the other party usually just wants to close.

By giving a bit more, there is a better chance of establishing a long-term relationship and referrals. And come on, how much does the CD cost Best Buy? Easy way to make a customer feel good and come back again.

So what? A ten-dollar CD is no big deal. Right? What about nibbles that are worth thousands? What if you are purchasing something for $100,000 and you ask for a 2% discount for cash? That little nibble puts $2,000 in your pocket. Nibbles can be small, but they can also be very large. I read about a $50,000 nibble on a twenty million dollar deal one time.

Many people don't like to negotiate, and they especially don't like to practice techniques like nibbling. I do, because it is practice for my teaching and writing. But we all should recognize that it is a negotiation technique, and an effective one. Even if you never use it, knowledge of it can help you stop others from nibbling on you.

But I also think it is good practice to try negotiation strategies and tactics now and then when they don't matter that much, so you will be a better negotiator when it really counts. Plus, what's wrong with getting a free CD now and then?

By : Alain_Burrese

No Negotiation Is An Island (So Don't Get Voted Off!)

Raise you hand if you have tunnel vision! Is your hand up sales negotiator? Even if your hand isn't up, I'm willing to bet that it should be. When we are preparing for our next sales negotiation it is all too easy to get caught up in the moment and forget about, hmm - what do they call it, oh yeah: the big picture.

Walking The Time Line
In order to keep the proper perspective while you are preparing for a negotiation, one of the most important things that you can do is to spend some time thinking about your products / projects.

Specifically, what you're going to want to understand is just exactly what your short-term product or project needs are going to be. What are you hoping to get out of this negotiation and if you get it, then what are you going to do with it?

At the same time you need to think about what your longer term products / projects are. How does the negotiation that you are getting ready to enter into fit into your company's long term plans. If they are going to be important to you farther down the road, then you're going to want to make sure that you don't burn your bridges during this negotiation.

Crossing The Bridge
Yes, you probably have goals and objectives for this upcoming negotiation. However, they are probably short-term in nature. Take a moment and think about where the company is trying to get to in the long-term.

Once you've figured this out, the next question to ask yourself is how is this negotiation going to help you get there? If it's not going to help, they you really need to ask yourself why you are going to go through all of the time and effort to engage in the negotiation.

The Fear Of Commitment
When the negotiations start, you will find your negotiating options limited by the agreements and commitments that your firm has already entered into. Before you start to negotiate, you need to make sure that you fully understand all of these restrictions that you have.

Not only do you need to understand how your options are going to be restricted, you also need to make sure that you understand how this upcoming negotiation is going to work with your existing commitments. Most importantly, you need to ensure that you don't find yourself in an awkward position if the negotiation is successful.

Promises Made Are Not Promises Kept
As long as you are going through the effort of working out a plan for your negotiation, you probably should take the time to do a little checking up on the other side of the table. Most negotiating books forget to cover this point, but it's really the most important one out there.

No matter how good of a job that you do during the negotiation, it's really not going to count for anything if the other side doesn't follow through on the things that they agreed to. Things like this are actually pretty easy to check out and doing so just might make the need to negotiate go away...

What All Of This Means For You
As exciting as it is to get ready for your next negotiation, you always need to take the time to do some extra work. This consists of taking a step back and thinking about just exactly how the negotiation is going to fit into your company's overall product / project strategy.

In order to understand where this negotiation fits in the big picture, you're going to have to think about your product's short-term and long-term plans. Existing commitments will have to be understood and the outcome of the negotiation will have to be contrasted to pre-existing agreements. Finally, you've got homework to do in order to make sure that the other side of the table really will follow through on the promises that they make.

Sales negotiations can take a long time to complete. While you are in the middle of one, it can be easy to lose your way and forget why you are doing this. Taking the time to study where this negotiation fits into the big picture before you start can be exactly what you need to turn a negotiation from an island into a mainland.

By : Dr._Jim_Anderson

Custom Plush Toys - Having Payment Terms

One of the issues that you have to face as a plush toy manufacturer is payment terms. This is a reality that you have to face if you are going to offer your custom plush toys to retailers. It's a challenge at first if you don't know how to play the game. But in order to succeed, you may need to offer payment terms for your plush stuffed toys and there are some bumps that you may encounter along the way.

If you want to be in the driver seat, you can offer your custom plush toys to new retailers. They're on the lookout for products to fill shelf space. Now, they haven't proven yet that they can pay so it would be logical to accept cash, check or credit card upfront. You really can't offer them payment terms because they haven't proven yet their ability to pay.

As a starting plush toy manufacturer, you really can't have retailers not paying you on time. Sure, you can perform a credit check with their permission. But it will be a hassle for you. So for the first sale, accept upfront payments for your plush stuffed toys. You can then offer a more flexible payment term as you continue to build on your relationship.

But of course, you can't focus on new retailers only. To be a successful plush toy manufacturer, you also have to offer to the big boys. Now as a "big boy", a big retailer can demand payment terms for the plush stuffed toys. Now, you have to understand them.

They're not being greedy at all. As successful retailers, they have a lot of people like you competing for shelf space. So it would be a matter of "scratch my back, I'll scratch yours". They also became successful retailers because they have great relationships with their suppliers.

After all, they wouldn't have people competing for shelf space if they didn't pay on time. Also, they deal with a lot of suppliers and you can't really expect them to pay everyone in 15 days. So if you want to offer to them, be ready to offer payment terms of 60 days or even more.

Why should you be willing to offer flexible payment terms? These big stores can give your custom plush toys the exposure it needs for you to be a successful plush toy manufacturer. There's a reason why a lot of people are competing for shelf space. It's because you can easily sell your plush stuffed toys with the help of these big retailers.

You also don't need to do a credit check. They're well known and it's public information if they're having financial troubles or not. Being ready deal and compromise with them can save you a lot of hassles and be great for your product. Work hard, and be polite, and you can find a payment term that works for both parties.

As a plush toy manufacturer, choose who you deal with. Be conservative with the payment terms for your custom plush toys if you're dealing with an unproven retailer. If you're going to offer your plush stuffed toys with the big retailers, be ready because they'll try to dictate when they can pay. Be prepared and be flexible, because it will ultimately be beneficial for you.

By : Rob_E_Bishop

Sales Negotiations - How Do You Get From the Middle to the End?

How many times has this happened to you: there you are, you've jumped into a sales negotiation and started off with your initial negotiating position. The other side did exactly the same thing. You are miles apart and it seems like there is no way that you are ever going to bridge the gap. What do you do now?

Movement Is Good
Although it sure can feel mighty lonely when you are in the first half of a sales negotiation, take heart - this is exactly what needs to happen. Both sides always start far apart, have some conflict and stake out their positions. This is when things start to really get interesting.

Expert sales negotiators realize that after all of this posturing is done is when the real work of crafting a deal really beings. Yes, there is a lot of distance between where you and the other side of the table sit right now; however, it's up to you to find ways to narrow that gap.

Your job is to knuckle down and look for which issues you and the other side are closer together on. These are where you can initially spend your time trying to find ways to move closer to an agreement.

Your negotiating strategy and the other side's will be in flux at this time. You'll try different things and some will work, some won't. You will test the other side's commitment to some of their positions and they'll do the same with you.

Much of this stage of the negotiation is based on power. You will be working to find out just exactly what the other side really wants to get out of the negotiation. The goal of this phase is for both sides of the table to come away with the belief that a deal is possible.

Into The Fire
It takes a lot of guts to be a good sales negotiator. You'll have to prove yourself when you move to the next stage of a negotiation - this is when the hard bargaining starts.

Both sides realize that a deal is possible. However, you'll change your tactics. You want to end up with the best deal possible and that means that you need the other side of the table to make as many concessions to you as you can get. Unfortunately the other side of the table is thinking exactly the same thing.

This is where the bare-knuckle brawling really comes out. Different sides threaten to leave, do leave, come back, etc. Pretty much every negotiation tactic in the book gets whipped out and tried during this phase of the negotiation.

This is a very difficult part of the negotiation to make it through. However, professional sales negotiators do make it through by realizing two important things: where they currently are, and where they are close to being. They know that if they can stick with it, they're almost done.

Striking A Deal
You will never be able to negotiate the perfect deal. What will happen is that you'll push and push to get a better deal and eventually you'll hit the brick wall at the end of the tunnel - you're not going to get any more from the other side.

When this happens, you've reached the end of the negotiation. You need to take a moment and asses where you are. Can you live with the deal that is currently on the table?

You need to realize that if you can't, then you are going to have to start negotiations all over with another partner. However, if you can live with the deal, then you are very close to being done.

Assuming that the deal that gets written down accurately reflects what you think that you verbally agreed to (it doesn't always!), then you've successfully negotiated a deal.

What All Of This Means For You
Inexperienced sales negotiators can often get lost in the middle of a sales negotiation. They know how to start the negotiation; however, once it's under way and they realize just how much distance there is between their position and the other side's, they don't know what to do next.

The correct thing to do is to realize that you need to spend time working to close the gaps. Once this has been done, you will be in for some hard negotiating in order to move towards closure. A deal isn't done until both sides can agree on a written version of the agreement.

Professional sales negotiators have a secret weapon. They never give up hope no matter how difficult things get. That's what makes the deals that they reach feel so good for both sides of the table.

By : Dr._Jim_Anderson