HELP! I need to get better at negotiation!
by Jeff Gitomer
Eh, no Sparky, you need to get better at everything else so that you NEVER have to negotiate – or at least negotiate 90% less.Negotiation is for people who are lousy at selling, don’t understand buying motives, haven’t provided value, are unable to differentiate themselves from the competition, can’t build trust, and have utterly failed at building relationships.Maybe that’s why you have to “negotiate.”
Negotiation is not a problem. It’s a symptom.And negotiate is only one of three words that make up your reality, and the real definition. The other two words are: your price. Negotiations are all about “concessions” and back and forth bickering about what you provide and how much it will cost. Negotiation “experts” call it give-and-take or win-win. That’s a bunch of crap. It’s lower your price, and sacrifice your profit.
I’m in the airplane as many as 20 times a month. In every airline magazine, there’s a two-page pullout ad for “effective negotiation.” It’s been in the magazines for years. It must work. I mean… they must be successful in selling the course. Their latest ad campaign states in bold headlines, “It’s like steroids for your career!” Uh, correct me if I’m wrong, but aren’t steroids illegal? Hey, you too can gain an unfair advantage! All you have to do is break the law. Sounds great – where do I sign up?In the case of negotiation, it’s a violation of the law of fair play, manipulation, ethics, and relationship. Reason you have to “negotiate?” You were calling on the wrong person or people in the first place.
REALITY: People in the C-suite don’t negotiate. They discuss, discern, and decide. And they do it based on perceived value and trust, not price.REALITY: Here’s why you have to negotiate:• You failed to prove value beyond your competition.• You failed to prove you were different from others selling the same product.• You failed to gain enough trust to get a decision.• You didn’t win on the lowest price, and they called you in to “match the price of the lowest vendor” and potentially win the business.• You won the business at a low level, and were sent to procurement.
All upside down propositions (and you are at the bottom).And, once you’re “in negotiations to get the business,” you’re relegated to manipulating and groveling to get the business – at a lower price, and less (or no) profit. Great move. And you call that making the sale. I call it a pyrrhic victory.The whole concept of negotiation seems like a win-lose proposition. They win. You lose.And to make matters worse, at the end of a “successful” negotiation, you halfway hate the people you were negotiating with – especially if they were in purchasing or procurement with some big company. People who want to suck your blood, and then call you a partner, or worse, a valued profit partner.
If you want to know if it’s likely that you will have to negotiate in order to win the deal or the sale, answer these questions:How high up in the organization is the person you’re dealing are you?What is your value proposition?Do you know how the customer profits as a result of buying your product?What is the customer’s urgency to buy?How are you perceived?Do you have their trust?How strong is your relationship?What is your reputation in the marketplace?
MAJOR CLUE: CEOs tell procurement departments what to do. With one phone call, they can eliminate all negotiations and create a purchase order, from a now friendly, or even accommodating, purchasing agent.In my opinion, negotiation is nothing more than someone else trying to get in your wallet and lower your price. In my opinion, if you’re negotiating, it’s because you started too low on the sales food chain (because it was easier entry), and you’re now faced with a price war.
Departments like plant maintenance, IT, HR, office admin, and other low level (yes low level) branches of a business have budgets that they spend. Maybe you should be talking to the people that MAKE the budgets for greater success.And just so we’re clear, I’m not saying, “don’t take the negotiation course.” Any knowledge on how to win, and how to deal with customers could prove to be valuable. I AM saying if you have to use negotiation to win a sale, it’s likely you have given up your profit along the way. Not good.