NEGOTIATION SKILLS

Objectives

 Determine the importance of negotiation in the sales process

 Identify key steps to take at every point in the negotiation
process
 Determine how to use various negotiation strategies to achieve
results
 Use effective communication to achieve good negotiation
outcomes.
 Content

What is Negotiation?
Negotiating with Prospects and Customers
Negotiation Strategies
Communication Skills
What is Negotiation?
 What is negotiation?

 Simply put...
 the process of getting what you want from another person.

 The truth is we negotiate every day, everyone in their every

day lives is a negotiator.
 Children negotiate with their parents for things they want.
 Spouses negotiate with each other over things they should buy or do
this weekend eg. go to the funeral, the wedding or take the children
to their friend’s party?
 Subordinates negotiate with their bosses over deadlines.
 Workers negotiate with their clients over services they can offer
them.
 Why negotiate

Negotiations occur for several reasons:

 To convince people to take your side of an issue
 To agree on how to share or divide a limited resource
 To resolve a problem or dispute between the parties
 To sell a product or service
 Sales negotiation
 Sales negotiation

 Sales negotiation can be a formal event at a specific

time and date or it can be ongoing at different points in the
sales process.

 As a sales staff you are seeking a mutually beneficial

relationship with your prospects and clients, not something
that benefits only you or them.

Why do you need

to negotiate with
customers in the
first place?
 Because of Customer Attitudes

A customer’s attitude toward your product or service

generally falls into one of four categories.....
 Objection
 Indifference
 Skepticism
 Acceptance
 Customer Attitudes

Skepticism :
Acceptance : Customer is Indifference:
Customer interested in a Customer
Objection :
agrees with particular shows a lack of
Customer
your benefits benefit, but interest in your
displays
and has no doubts whether product
opposition to
negative your product because of no
your product
feelings toward can really perceived need
your product provide the for its benefits
benefit
 S0 why do you need negotiation skills?...

To be able to change customer attitudes towards

your products and services;

Bottom line
• ....... To win more Customers and improve profits for
your organisation.
Negotiating with Prospects and
Customers
 Negotiating with prospects and customers

Negotiation with prospects and customers must be

undertaken within the context of the sales process.
 Where inadequate prospecting, pre sales preparation and
planning is done, negotiation is likely to be unsuccessful.

So what does the sales process entail?

Overview of the sales process

1. Prospecting and qualifying

2. Planning the sales call: The pre approach

3. Approaching the prospect

4. Sales presentation and demonstration

5. Negotiating resistance and objections

6. Confirming and closing the sale

7. Following up and providing after sales service

 Overview of the sales process

 Negotiation with the prospect usually begins after you have

had the opportunity to present your products and services or
after step 4 in the sales process.

 At this point, you will be able to gauge whether the prospect

 objects
 is indifferent
 is skeptical or
 accepts your product or service

 Based on your assessment of the situation, you can then

begin to negotiate.
 Negotiating with prospects and customers

Before negotiation begins...

 Avoid negotiating unless you have
had an opportunity to fully present
your products and services
 Understand the objections raised
by your prospect and identify what
your prospect or customer’s main
points of interest may be based on
these objections
 Be prepared to illustrate how your
offering will benefit them and
quantify the value they will get
(if possible)
 Be prepared to be patient (which
can lead to higher trust between
you and your prospect)
 Be confident in the value your
product or service will provide your
prospect
 Be prepared to work toward a
solution that works for both you
and your prospect
 Know in advance at what point the
negotiation is no longer beneficial
to you and your organisation and
be prepared to walk away
 Negotiating with prospects and customers

During negotiation...
 Use open ended questions to
confirm your understanding of
their needs.
 Be prepared for tactical responses
from prospects and customers –
such as exclamations after you
explain the terms of your service
(eh, aba! etc) or silence – don’t
react and instead respond with
more questions
 Don’t rush to fill pauses with more
talk – be comfortable with
moments of silence
 Listen
 Be prepared to make slight
adjustments for your prospect if
possible eg. Adjust the
product/service offering, loan
payment terms etc.
 Try to identify small things you
have both agreed on to help
develop positive momentum –
summarize these agreements
periodically
 Negotiating with prospects and customers
After the negotiation...
 If you are able to make a sale…
 Summarize verbally and/or in
writing the details of what you and
the customer have agreed on as the
terms of the service.
 Thank the customer/ prospect for
their time and reinforce the
purchase decision
 For your next negotiation, review the
points that seemed to help move the
negotiation process forward – study
them, know them, use them
 If you did not make a sale…
 Sincerely thank the prospect for
their time
 Avoid appearing annoyed or
disappointed
 Give the prospect an “out” or an
opening for them to come back to
you/your organisation in the future
(have this statement prepared)
 For your next negotiation, review the
points that seemed to prevent the
negotiation process from moving
forward – study them, know them,
and act accordingly
 Handling objections and resistance

Objections can be defined as statements, questions,

or actions by the prospect that indicate resistance or
an unwillingness to buy . . . at least yet

Without sales resistance, there wouldn't be any need

for salespeople
 The first person who reached the prospect would make the sale
 Serious negotiations seldom begin until the prospect's
objections surface
 Handling objections and resistance

 Prospects and customers raise objections for a

myriad of reasons
 Some people will almost always raise objections, even if they really
need the product/service
 They may be people who naturally raise objections as a matter of buying
technique or negotiation strategy
 The prospect may seek reassurance that the product/service will
perform or yield the benefits promised
 A few prospects will raise objections merely to irritate you the
salesperson
Handling objections and resistance

 Some prospects raise objections so that they can bargain for a better
deal. Irrespective of how good your terms may be compared to the
competition, some prospects are obsessed with getting an even better
deal so that they can feel “victorious.”

 Prospects may raise an objection because they have a bias against the
your organization or type of service or, in rare cases, simply dislike
you the salesperson.
 Handling objections and resistance

 Identifying and negotiating the prospect's most important

or key objection is the first step to negotiating total prospect
resistance.

 One subtle way is by engaging the prospect in informal

conversation before the sales presentation and encouraging
him or her to reveal personal concerns and perspectives on
problems

Which other ways

can you think of?
 Negotiation outcomes
PROSPECT
Win
Win Both the prospect and the sales
SALES PERSON
person are satisfied with the terms of
the sale and a good business
relationship develops
Lose The prospect is satisfied with the
sale but the sales person feels
manipulated and may reciprocate in
future negotiations or reduce
customer service. The business
relationship is in trouble.
Lose
The salesperson is satisfied with
the sale but the prospect is not.
He may even feel manipulated or
taken advantage of. The business
relationship is in trouble
Both parties are dissatisfied with
the sale thus the bond of trust
between them may be so
damaged that they are unlikely
to enter into any future business
relationship.
Common mistakes to be avoided in negotiation

 Inadequate preparation
 Use of intimidating behavior
 Impatience
 Loss of temper
 Talking too much, listening too little, and
remaining indifferent to body language.
 Arguing instead of influencing.
Negotiation Strategies
 Negotiation Strategies

 There are various well tested strategies that can be used to

achieve a win-win outcome, such as those used by Akosua
and Ebo as outlined in this section.

 Akosua and Ebo decide to visit a well known business area to win new
clients for their institution.

 Their first stop is an office located in the area with a lot of staff who are
ideal potential clients. Akosua and Ebo intend to introduce their services
to them, get them to be interested in the services to the point where they
will actually sign on for a service such as open an account and/or take a
loan.
 Negotiation Strategies

Strategy Approach
Vinegar – Honey Akosua approaches one of her
prospects and informs him that
Start with the cheapest possible he can access a loan with very
product or service but one little effort – she goes ahead to
which still has benefits for the explain the procedure for
prospect. obtaining a loan from her
organization.

Practice with the

cheapest
product/service on your
listing.
 Negotiation Strategies

Strategy Approach
Pinpoint the need Akosua’s prospect appears
skeptical about the process and
Focus on the need ie. Why a indicates so, stressing that he
loan will be beneficial to the knew people who had been
prospect and enumerate the made similar promises but went
benefits s/he would derive from through a lot of stress to obtain
the loan. loans.

She ignores his comment and

begins to highlight the benefits
to be derived from such a loan.
 Negotiation Strategies

Strategy Approach
Challenge The prospect goes quiet for a
while then tells Akosua that he
The prospect throws a challenge needs a loan of GHC 5,000 but
at Akosua in an effort to win wants to be able to negotiate the
some concessions. terms of payment because he
knows two people from his
office who got a similar deal.
 Negotiation Strategies

Strategy
Limited Authority
Limited authority is an attempt
to postpone the decision on a
pretext to get approval from a
competent authority. Whereas
the real aim is to gain time for
reconsideration, and/or keeping
the prospect still interested in
the service for a reasonable
period of time until a win-win
situation is achieved.
Approach
Akosua says, ‘those two people
you are referring to took huge
loans and so were given the
opportunity to negotiate their
terms of payment’ . But she
indicates that she will speak to
her boss about it.
 Negotiation Strategies
Strategy Approach
Good Guy/Bad Guy

The good guy / bad guy is an

internationally used strategy. One Based on your
member of a team takes a hard line experience on the
approach while other member is field, how would you
friendly and easy to deal with. act out the good
When bad guy steps out for a few guy/bad guy
minutes, the good guy offers the deal strategy to your
that under the circumstances seems too favour?
good to refuse. Bad guys usually
comprise spouses, lawyers etc.
 Negotiation Strategies

Strategy Approach

Defer
Deferring strategy allows the
negotiators time to reevaluate
their positions. Deferring a
decision often proves that
patience pays.
Please excuse us while we
discuss ways in which we might
provide you a better offer.
Would you please reevaluate
your position too?
 Negotiation Strategies

 Keep It Light
 You never want to let negotiations become too tense. Always feel free to
smile and inject some humour in the conversation.

 Lightening up the mood can ingratiate you with your prospect while
also conveying your negotiating strength.

 If you do not appear to be taking the negotiation as a do or die affair,

your prospect may conclude that you are ready to move on if s/he does
not cooperate and based on that s/he may decide to be cooperative.
Communication Skills
 Communication Skills

 Communication skills are crucial in the kind of

negotiations you engage in as field staff. Good
communication is the cornerstone of any productive
negotiation. Particularly important are
 Oral communication and
 Non-verbal communication

 It is also important that as field staff you are aware of

critical cultural norms that exist within your area of
operations.
 Fortunately, the Ghanaian culture does not vary too much from one place
to another
 Oral Communication

 Oral communication implies communication through the

mouth. It not only refers to speaking but includes the
ability to listen as well.

 Specific examples of oral communication include:

 Face to face communication in conversation, be it direct or telephone
conversation, meetings, interviews, speeches, presentations,
discussions etc.

 Oral communication is significant in building rapport and

trust with customers.
 Oral Communication

 When communicating with your prospects and customers

 Slow down your speech and pronounce your words clearly and
correctly.
 Vary your pitch, tone and volume to emphasize key words or
sentences.
 Adjust the volume of your voice to your audience
 speak softly but audibly when you are talking one-on-one
 speak louder when you are talking to a larger group or across a
room
 Be conscious of your speech to avoid filler words such as um, uh, ah,
like, well etc.
 Oral Communication

 Organize your thoughts and ideas before speaking (e.g. write notes
on what you want to say).
 Do not interrupt when someone else is speaking.
 Respond non-verbally to show understanding and interest when
communicating
 nodding your head, smiling etc.
 Make eye contact when listening or talking to people.
 Be specific when asking questions and giving answers.
 Take notes if necessary to help you remember what is being
communicated.
 Oral Communication

Phrase your words properly; it makes a difference.

Two priests were so addicted to smoking that they desperately needed to

puff on cigarettes even when they prayed. Both decided to ask their
superior for permission to smoke.

The first asked if it was okay to smoke while praying?

Permission was denied.

The second priest asked if he was allowed to pray while he was smoking.
His superior found his dedication admirable and immediately granted
his request.
 Listening: a strong negotiation tool!

Perhaps the best strategy to adopt while the other side lets off
steam is to listen quietly without responding to their attacks.

You often get more through listening by finding out what the
other person wants than you do by clever arguments
supporting what you need.

 Generally, good techniques of good listening include

 paying close attention to what is said,
 asking the other party to spell out carefully and clearly exactly what they
mean,
 requesting that ideas be repeated if there is any ambiguity or uncertainty.
 Non-verbal communication

 When we do not know others, their body language remains

the first source of building image about them.

 What people say may be reinforced or contradicted by the

non-verbal cues.

 When there is no consistency between the verbal and non-

verbal communication, people rely on the non-verbal aspect
of communication to determine the true meaning of what is
being said.
 Non-verbal
Communication

Feelings and
emotions received
from others through
their body actions
Symbolic Vibes

Paralanguage Kinesics

How something is said

instead of what is said i.e. Facial expressions, body
volume, rate and rhythm, gestures, dress etc.
silent pauses, sighs etc.
 Non-verbal communication

Body Language What it could mean

Avoiding eye contact Lack of confidence in bargaining
position

Making excessive eye contact Trying to bully or intimidate

Fiddling with objects such as hair, Lack of confidence

pencils, or papers

Crossing and uncrossing the legs Impatient

Keeping legs and arms crossed Not receptive

 Cultural norms

Some general Ghanaian norms include:

 Not using the left hand in communicating with others either to
give something to someone or point in a direction etc.
 Greeting the people we meet wherever we go

What are some of

the cultural norms in
your area of
operation?
 The Ball is in Your Court…

Go on and practice these negotiation strategies to

become effective sales people!!!