Negotiation Skills - Honey Shelton

Negotiation Skills
by Honey Shelton, BOL Guru
Guru BIOS

The essence of professional selling today is the building and maintaining of high-quality relationships, based on establishing a high level of trust and credibility with the customer. The job of the sales person is to create and keep a customer indefinitely. You create a customer by convincing him overwhelmingly that you are the lowest-risk, highest value, easiest person and company to do business with. You keep customers by delivering on your promises, fulfilling your commitments and continually investing in maintaining the quality of your relationships.

Seven Steps to Relationship Building

1. Never criticize, complain, or condemn
2. Acceptance
3. Approval
4. Appreciation
5. Admiration
6. Agreeability
7. Focused attention

Selling today is based on the Golden Rule and the friendship factor. Treat every customer like a special and important person, exactly the way you would like to be treated by someone selling you a product or service. Be thoroughly prepared and knowledgeable. Be completely honest and straightforward. Be totally focused on helping the customer to make a good buying decision, just as you would like to be treated if you were the customer.

Key pieces
Know yourself. Knowing yourself, understanding your own >
Major characteristics or attributes that make for a better negotiator

• Authority
• Power
• Principle
• Intellectual ability
• Knowing your limitations
• Sensitivity

Contemplation prior to negotiation

What is your true bottom line?
Are your goals short or long term?
Are they realistic?
Are they productive in the long run?

Language of Negotiation

Leverage
An appreciation of the leverage factors at work in each situation, plus the ability to apply leverage (when it's with you) and cope with it (when it's against you).

Information
The knack of ferreting out and evaluating useful information regarding the other side, while protecting information about your side you would rather not reveal.

Credibility
The ability to make those on the other side believe you mean what you say, as well as to assess whether or not they're bluffing.

Judgment
The ability to strike the right balance between gaining advantages and reaching compromises, in the substance as well as in the >
Four Basic Skills of Negotiation

1. The first basic skill of smart negotiating is an awareness of the leverage factors at work, plus the ability to apply leverage when it's in your favor and make do when it's not. Where leverage is concerned, appearances are often crucial - and appearances can be manipulated. As a negotiator, you should always be responsive to leverage; but you must learn to distinguish between the real thing and the imposter variety - as well as how to cover up your own weaknesses.
   
   
2. The second basic skill of the smart negotiator is the ability to uncover and evaluate any information about the other side that may increase his leverage and at the same time guard any information about his position that may decrease it. Information is so central to negotiating that you have to develop plans regarding it in advance. What do you need to know? What's the best way of finding it out? What is your counterpart likely to be looking for from you? What's the best way to protect information you would prefer not to disclose?
   
   
3. The third basic skill of the smart negotiator centers on credibility - the ability to make his counterpart believe that he means what he says. At the same time, you have to make an accurate assessment of your counterpart's credibility. If you suspect that the other side is bluffing on an important point, you must send a signal of your own resolve in order to test the bluff, even if your actual level of resolve isn't quite so absolute. If your counterpart is bold enough to bluff, anything less on your part will only encourage his pretense.
   
   
4. Good judgment is the fourth basic skill in smart negotiating, and it should permeate such other aspects as applying leverage and establishing credibility. The key to good negotiation judgment is the ability to keep yourself in balance, acting in moderation and avoiding far out positions. Try to measure any proposed course of action by such a yardstick. If you decide to deviate from this standard and climb out on a limb, make sure you have a compelling reason for doing so - not to mention a safe way back if it's sawed out from under you.

Blunders- common errors

Negotiators with leverage in their favor often misuse it, adopting arrogant and confrontational postures, which cause their counterparts to toughen up in retaliation. Don't squander your riches. Let your strength speak for itself. Never furnish your counterpart with an excuse to respond irrationally.

If you're unprepared when a tough question comes your way, you may respond in a manner that inadvertently gives away what you're trying to protect. Be sensitive to the inferences your counterpart may draw. Work out your sidestepping strategy in an unpressured atmosphere to avoid finding yourself forced to reply in the heat of the moment.

A bluff can be so effective it causes the other side (which isn't negotiating under the pressure of necessity) to call off the deal, even though the bluffer would have been willing to agree to the other sides' final terms. Only take a chance bluffing about an issue when, if the bluff doesn't work, you'll have the opportunity to pull it off the table.

The most common mistake is giving in to a sense of impatience, satisfying the need many of us feel for instant gratification. "Let's wrap it up" becomes the byword, and we find ourselves settling on terms that could have been improved with a little more patience. Admittedly there are times when you're better off grabbing what's on the table than holding out for small additional gains that put the deal in jeopardy. But where the reward outweighs the risk, slow down.

Lapses - notable omission

There's a tendency to be overwhelmed by negative leverage factors that hamper your freedom of action. Your counterpart may be talking a good game, but what's really going on underneath? There can be elements you're unaware of that hamper his freedom of action in which case you many not be in such bad shape after all.

For some reason - politeness may be the chief culprit here -we too often fail to pose the key question directly. When we do inquire, it's handled in a roundabout fashion, which is easier for the other side to duck or counter. As a result, we don't obtain significant information or even building blocks from which to derive a valuable inference. Don't be afraid to pose tough questions to your counterpart. The worst that can happen is you'll be told it's none of your business, a response that itself often transmits some valuable information your way.

Too often we take our own credibility for granted and don't take any buttressing effort. It's almost as if we assume that everyone will consider us as honest and straightforward as we know we are. But a safer assumption for you to make is that your counterpart will be just as concerned with whether you're bluffing as you are with whether he is.

Don't forget, under these conditions, a certain amount of suspicion and doubt come with the territory.

When judgment fogs up negotiation it is about the failure to put things in perspective. You can't prevail on all issues, so save your fire for what's significant. Don't fuss with the small stuff. Let your counterpart take home some trinkets, even where both the leverage that logic are on your side.

Hot tips for negotiation

When a customer you count on turns combative, your choices are limited. You can 't afford to lose the business, but you can't afford to lose the profit either. Confrontation will poison the water, but compromise will rob you of your margin.

The solution is to dodge the bullets and lure your customer into a search for inventive answers to tough problems.

• Prepare by knowing your walkaway and by building the number of variables you can work with during the negotiation.
• When under attack, listen
• To reduce frustration and assure customers you're hearing what they're saying, pause often to summarize what's been said.
• Keep track of the issues requiring discussion
• Assert your company's needs
• Commit to a solution only after it's certain to work for both parties
• Save the hardest issues for last
• Start high and concede slowly
• Don't be trapped by emotional blackmail

Information - The name of the game

Good information is an essential commodity for you as negotiator. It gets behind the other side's positions and provides you with insight into your counterpart's motivation and intentions. The more you know, the better you can judge what price will swing the deal, how an issue is likely to play out, what arguments should be stressed or scrapped. And as we've just seen, the appearance of leverage depends largely on who knows what.

There are many ways to gather useful information. From consulting public records for example, or by hiring an investigator or speaking to knowledgeable third parties to using intermediaries. Focus on the most significant means: the information you can elicit form your counterpart before and during the negotiation, together with it's unavoidable corollary -- what your counterpart can pry out of you.

A former banker, Honey Shelton, president of InterAction Training Systems, is a nationally recognized speaker in the banking industry and repeat presenter for the Kentucky Bankers Association. She and her team will be presenting a highly dynamic, information packed seminar, Sales on the Frontline in the spring. Contact Judy Floyd for more information and to register all your frontline staff.

First published on BankersOnline.com 8/9/04