How To Negotiate Successfully
There are a few certainties in life: buttered bread always falls face down, the years go by faster the older you get, and in order to build a successful business you will need negotiation skills. While it is true that most people do not possess these skills naturally, they can be learned. In fact, anyone can become an expert negotiator. It simply takes planning and practice.
Planning:
The negotiation begins long before you face the client. One of the biggest errors you can make is to come to the meeting unprepared.
- Begin by understanding what the client needs. Knowledge is key; review your Pricing/Estimate/Assessment Reports and prepare your services in advance.
- Next, determine what you need. Know your bottom line and how low you are willing to go on your price. “Once you know where you stand with this, you have extreme power in the negotiation.”
- Research your competition; have a clear idea of what they charge. If you price your services higher, be prepared with the reasons why your company is worth the extra money.
- Decide ahead of time what you are willing to compromise on. Every relationship requires give and take; the one between you and your client will be no different. Pre-emptively planning to compromise puts you in a stronger position.
Tip: Come to the negotiation with a list of creative ways to provide value without compromising your price.
- Rather than reducing your fee, provide additional staging accessories or offer to professionally organize an additional closet for no extra cost.
- Your list will comprise items or services that you can give away for “free”, that will not impact your bottom line. Your client will perceive the added value you are providing, and you will be able to earn their business by including an “extra” that costs less than a reduction in your fee.
- Having this list on hand during the negotiation ensures you will react in a positive manner to any pushback.
The Negotiation:
When meeting with your client, begin the negotiation with a “higher than expected” fee. There are a couple of reasons why this is a good idea.
- Beginning the negotiation with your bottom line does not leave you any “wiggle” room; your price point should always have some flexibility. In business, as in life, it is better to be viewed as flexible and resilient, rather than rigid.
- It provides an anchor for all further negotiation. If your first number is slightly higher than expected, it influences the client’s view on what your services are worth and puts you in a powerful position. If you low-ball your fee, it instantly under-values your worth. Keep in mind that “all further negotiation is anchored around the initial offer”.
The next step in the negotiation is to listen. “The secret to being a powerful negotiator isn’t in the bravado. It is in the silence.”
- Listen to the clients to understand what is important to them. Is it cost? Is it the need for compromise? Is it the need for a “deal”? Are there services they do not want?
- While you are listening, pay attention to the clients’ body language. Why? Because body language comprises 55% of all communication. Women are particularly adept at this skill; females are much more likely to “tune into the subtle messages the other side is conveying during bargaining encounters”. This skill can once again put you in a powerful position.
Tip: Once you are aware of what is important to the clients, you can customize your compromise.
- Is there a “special” price you can offer the clients to address their need for a “deal”? This can be done when initially presenting the price by mentioning a regular price and then a discount or promotional price negating their need to negotiate or ask for a deal.
Is there an item or service you can remove from the project that is not a priority for the clients? This will provide a compromise and reduce your fee.
Closing the Sale:
There are specific strategies you can use to your advantage when closing the sale.
- Create a sense of urgency. Make the clients feel that they will be missing out if they do not go ahead with your services today.
- Provide a reason for the urgency, such as: your sale ends soon, or you may have a nearly full schedule or large project beginning next month which will prevent you from taking on any new clients.
- Make a connection with the clients. People deal with people they like, people they trust, and people who are just like them. Be friendly and authentic.
- Display your knowledge. Remember, you are an expert in your field!
- Do not be afraid of the word “no”; it simply “signals an opportunity to problem-solve”. Consult your list of compromises to see which one offers the best solution.
- Keep in mind that the negotiation is expected. Should you immediately agree to your client’s counteroffer, he/she will assume a better deal was possible.
- As opposed to agreeing to the client’s counteroffer, counter again with a compromise between what the client is asking for and what your initial offer was. Just because your client asks for a number doesn’t mean you have to settle on that number or that the client is even expecting you to agree to that.
Tip: Confidence sells.
- Practice your negotiation skills with your friends and family, as well as in front of the mirror.
- Presenting a confident demeanor will help you to appear authoritative and knowledgeable about your services and the industry that you represent.
Negotiation is a certainty of life. In fact, the success of your business is dependent on your ability to confidently present your price and sometimes negotiate with your clients. Regardless of whether you possess these skills naturally or not, with planning and practice you too can become a master-negotiator.
