Paul Watts joined me in an episode of Negotiations Ninja to talk about negotiation strategy and planning. His unique perspective as a seasoned sales professional is a welcome change of pace. He shared some techniques that he uses in his career that can help you become a better negotiator. What are they?
The old adage: practices makes perfect
Simple advice—but one of THE best ways Paul has found to improve your skills. Paul says the next time you’re in Walmart, negotiate to get a better deal on an item. You’ll be under time-pressure and dealing with peer pressure. Or negotiate for a lower price on a meal or a free dessert next time you’re at a restaurant.
Negotiation can be uncomfortable. Somehow humans have been conditioned to think that asking for something is unreasonable. Or, they have an emotional attachment to rejection and it guides their lives. No one wants to hear the word “no”. We’ve attached psychological baggage to negotiation that must be overcome.
Extensive planning is your key to success
Paul notes that planning is the single most important element of negotiation. Are you solving your customer’s problem? Do you understand their challenges? Does your solution meet their challenges and objectives? You need to calculate costs and know your bottom-line. You have to know how each percentage of a discount offered affects that bottom-line. Once you’ve done the research and preparation—then you negotiate.
Present the reward AND the risk
Customers are used to being told how they’ll be rewarded if they work with you—but what about what they’re risking if they walk away from your deal? They need to understand the return on their investment (ROI) but also the cost of inaction (COI). It could be as simple as “If you pass on this deal, you’ll lose $200,000. If you move forward with our solution, it will save you $200,000”. Paint the whole picture for your client and frame it properly.
Incorporate a tripwire into your negotiation
We’ve already discussed the importance of knowing your bottom-line. But Paul has devised a process where he uses a “tripwire” during the negotiation process. It’s a point just above the bottom-line—the point where you have to walk away—that signals Paul to “pause” the negotiation. He suggests a reset during which each side goes back to their prospective organizations and revisits their positions. Paul has found that this technique has saved sales he otherwise would’ve lost.
Strive for a lifetime of learning
Another piece of simple—but sage—advice is to embrace a mindset of constant learning. You’ll never have it all figured out. Paul was always successful and always hitting his targets. It wasn’t until he started teaching that he realized how much he still had to learn. When he launched his podcast and started interviewing experts he knew there was so much he could still learn. Paul is determined to master the art of sales and consistently invests in his own education—and encourages you to do the same.
To hear more of Paul’s expert advice on negotiation strategy and planning, listen to the episode of Negotiations Ninja that he was recently featured in.