07 Sep 3 things you need for a successful negotiation strategy
We asked The Negotiation Guru to share his strategic negotiation secrets. It all comes down to 3 little things.
In June we staged our first Sales Confidence conference at HereEast, in London’s Olympic Park. We called it SaaSGrowth2018. We had over 200 SaaS professionals in the audience, watching more than 30 of London’s foremost SaaS experts share their knowledge. Even if you couldn’t make it, we want to share the inspiration and education with you through our SaaSGrowth2018 articles.
‘How to successfully navigate, negotiate and sell to FTSE 100 companies and enterprise accounts’ was the title of one of the morning sessions. We were excited to welcome 5 sales experts to the SaaSGrowth stage to talk about how they do business.
Dan Hughes is The Negotiation Guru, a master negotiator and trainer who has trained people at some of the biggest companies in the world. He has also appeared on Channel 4 and BBC Breakfast. It was great to welcome him to the SaaSGrowth stage, as it’s safe to say he offers something a little different from most of our other speakers.
After a spot of arm wrestling (honestly), Dan let us into how to construct a successful negotiation strategy. It all comes down to 3 elements.
1 — Power
Dan’s first component of negotiation is ‘power’. He told us that power is not related to the size of your company. Great news for startup salespeople!
‘There are 2 types of power, real power and perceived power. Real power is out of your control, so don’t worry about that. You can affect the perception of power. That is controlled by the individuals who are part of the negotiation.’
How do you project perceived power? Dan told us how the best way is to focus on the value you create. It makes sense. If you have something that solves a problem, something they want, you have power.
‘What your solution is worth to them, is much more important than its market value.’
2 — Personnel
The next element is ‘personnel’. This means the people who are involved in the negotiation.
‘There are 2 angles here. There’s you and there’s them. Don’t worry about you and your team. There’s not much you can do about them. What you can focus on is them.’
It’s good advice. The more you can see what they are looking to get from the negotiation, the easier it is to make trades for the outcomes that you need.
‘The world looks like a different place from their side of the table. Find out about them. Find out what’s important to them. Think about the structure. Who do you need to be talking to?’
3 — Procedure
Dan’s final component is ‘procedure’. This means the steps you follow in your negotiation. In Dan’s experience, it’s something many companies get wrong.
‘When people hit an objection, they tend to jump to either withdraw or compromise, so they give up. There are other things you can do in-between those stages.’
In your negotiation strategy, you need to have a plan for what you’re going to do when you encounter an obstacle. You know that there will be something you need to overcome, so plan for it instead of running and hiding.
‘Spend time trading. If they ask you for a discount, don’t just give up and knock some money off. If you have to reduce the price, get something in return. It could be volume, a longer contract, an introduction to another part of the business, anything. This could be crucial.’
Negotiation tends to be something salespeople dread, but it doesn’t have to be that way. Go in there with a good strategy, and a desire to achieve a mutually positive outcome, and you’re likely to find success.
Over to you now. What are your tips for a successful negotiation? Let us know in the comments below.