Before you enter a negotiation, do you take the time to write down those requests you are willing to grant your customer? Do you understand that success in B2B sales negotiation requires you match a concession for a concession? Most importantly, do you take the time to grade these requests in terms of their importance, both for those you seek and the ones your customer seeks? In this case, it’s not merely about getting something in return. Nor is it about holding out for something better. Instead, it’s about being prepared with your list of concessions and using it properly.
B2B Negotiation Essentials
When you think about negotiation, what’s the first thought that comes to mind? Well, you’ll likely think of the importance of getting something in return for giving up something. In essence, a successful negotiation is one where both parties are able to grant a concession for a concession.
For you to have a successful outcome means you must match the importance of the customer’s concession with one of equal importance to your side. Focus on matching concession for one of equal importance, and you’ve already simplified the negotiation process. So, how should you go about preparing your list and how should it be used?
1. Define Primary Concessions For Both Parties
You must be able to determine the importance of your concessions versus those sought by your customer. How will you know when a customer’s request is more important than another? When the customer doesn’t use a “veiled” threat, it’s a sure sign that the concession is important to them. Customers use threats when you refuse to grant them something. However, serious threats are different from veiled threats. In this case, veiled threats are ones the customer uses throughout the negotiation and yet continues on with the process. In this case, a veiled threat accompanies a request that isn’t vitally important to the customer.
2. Define Secondary Concessions For Both Parties
Next, define your secondary concessions and that of your customer's. Your list should include those items you’d like to have as part of a successful outcome, but ones that aren’t a “deal breaker”, so to speak. Why is this second list needed? Simply put, these are the concessions you’ll offer up first. They are big enough not to insult your customer, but not so important that you’ll regret offering them. Again, you’ll be able to gauge the importance of the customer’s request by how they respond. Veiled threats (not serious threats) accompany requests that aren’t as important to the customer.
3. Define Your Tertiary Concessions
For your tertiary concessions, concentrate on those things you can grant your customer that represent absolutely no risk to your side whatsoever. Never use these within your initial offer. These are items you'll grant in order to close the negotiation. They are meant as add-ons. They are only to be used when both sides are ready to finalize the agreement. Use them when you feel a little extra must be added to sweeten the deal.
How to Use Your List
I’ve provided a summary of some of the primary, secondary and tertiary concessions you could use. However, this list could easily be larger. As such, it must match your unique position with your customer. In terms of how to use your list, you want to identify those primary customer concessions by how much emphasis the customer places on them. Again, some customers will use threats and scare tactics immediately after your unwillingness to grant their request. If they continue with the negotiation, then that threat is a veiled threat – it has no meaning. When that happens, you must make a mental note of the concession and write it down.
If you want to read about how to use specific statements to defend your pricing and position as the incumbent supplier, then please read: Defend Price with These Proactive B2B Sales Statements
Match the threat to the concession and you should be able to gauge its importance. Remember, a customer’s primary need will exposes itself if you are unwilling to grant it. Their tone changes, they impart more importance on their need and they don’t use veiled threats. Instead, they state their case and act more resolute. They aren’t willing to abandon their position as easily and are providing you with an opportunity to ask for a primary concession of your own.
Preparing your list of concessions is essential in B2B sales negotiation. Now, the purpose isn’t to drive your customer to use threats, or for you to assume that all threats aren’t serious. However, when a customer uses a threat, and still continues with the negotiation, then that is the surest sign that they aren’t serious in following through. When this happens, it’s an indication that their request isn’t as important as they want you to believe. Veiled threats should equate to the customer’s secondary concessions. Some customers use veiled threats repeatedly throughout the same negotiation, never fully aware of what they’re doing. Keep this in mind.
Comments