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A consultative negotiation is not just about the give and take of terms. It’s also about the equitable exchange of information builds relationships. Rember these core tenets of negotiations throughout the sales process to improve the outcomes or your deals.
Negotiations Occur Throughout the Selling Process
From the first conversation, sellers are building trust and creating a collaborative environment that helps move negotiations forward. Sellers can spark this collaboration by sharing information thereby inciting the customer to do the same. According to the established social norm of reciprocity, we are inclined to respond to another person’s action with a similar action. “We are obligated to give back to others, the form of behavior that they have first given to us,” remarks Dr. Cialdini, “There’s not a single human culture that fails to train its members in this rule.” In fact, science reveals that holding back on sharing information has a negative impact on desired outcomes and reduces trust. If we want information, then we need to share our information—which builds a customer’s willingness to share and trust.
Look for Early Indicators of How One will Respond to Negotiations
Sellers must identify all demands early in the negotiation process. Doing so avoids the common pitfall of the “fixed-pie bias,” the notion that a scenario is only win/lose because the size of the potential gain is fixed. Research published in the journal of Organizational Behavior » Continue Reading.
Effective Consultative sales negotiations serve 4 key objectives:
Increasing Deal Size Reducing Discounting Improving win/loss ratios Realizing greater value (proposed vs. closed) Tips for Effective Sales Negotiations
So, how do effective negotiators keep their goals in tact through the contract? They:
(1) Use Preparation Time
Sellers must come ready with relevant insights that demonstrate their detailed knowledge of industry specific challenges. This shared knowledge “primes” the customer. Priming is the basic principle of prompting a person to think a certain way. This effect is helpful to sellers who want to encourage a customer to recognize the value of a proposed solution. This influence of the customer’s decisions begins with the first conversation. Effective priming helps customer’s change their mindset from “someone is trying to sell me something” to “this solution can get me to where I need to go.” Priming is trust building. The seller is helping the customer become comfortable with sharing information from their side of the table.
Building trust at this early stage creates an environment that’s conducive to successful consultative sales negotiations. The reason: trust signals fairness. This sense of equitable interests has been shown to bring efficiency to selling. Research published in Psychology & Marketing revealed that by “priming a consideration for fairness, a seller can increase a customer’s satisfaction without sacrificing profit.” Additionally, “Fairness-primed buyers consequently had a more positive attitude toward the seller.”
(2) Lead By Opening
Effective » Continue Reading.
Too often we think of selling and negotiating as two separate ends of a timeline. In truth, they exist together on a spectrum. Every moment of selling involves some amount of negotiating. Therefore, every conversation places another brick in the road toward closing a sale. Effective sellers keep this in mind by shaping the customer’s perception of value. Keeping this approach in the context of the customer’s needs and priorities creates negotiations that are mutually beneficial rather than an exercise of blunt force. The result is a handshake – not an arm wrestle.
How Consultative Negotiations is Different
A consultative approach to sales negotiation training helps sellers learn to understand the deeper needs of the customer as the finish line comes more clearly into view. This collaborative engagement rises above the adversarial dynamic that many associate with the word “negotiation.” However, being consultative doesn’t mean relinquishing ground. In fact, consultative negotiators understand how to control a negotiation and arrive at a mutually-beneficial outcome.
They win by:
Relationships are powerful. In fact, Gallup reports that “B2Bs win by building relationships, not selling on price.” Their research concluded that nearly one-quarter of accounts that had “high engagement scores” with sellers grew by 20% or more in the following year. Strengthening a relationship helps keep the seller at the fore of the customer’s mind. A stronger connection establishes trust and respect, both of » Continue Reading.