Haggling is not Negotiating

In the commercial activity the word of Negotiating is commonly used mostly by Sales People when they meet the clients. When I meet my sales friends, the most interesting topic we are talking about is “I just negotiating with the client X so they will buy our solution”. But when I explore further about the negotiating he just made, I conclude that “He just haggling over the price”. Haggling is not negotiating. Haggling is about offering your products for a reduced margin. – you’re simply making price concession until buyer say yes.

Negotiation, though, is about making getting something equal or higher value, in return of any concessions you make. Negotiation involve more than one variables and it’s about trading. A simple example, getting a buyer to place an extra order in return for giving them a slightly lower price. But to enter into a negotiation, all parties need to believe it is in their interest to do so. How often we found that a sales people believe they have a product or service which will help their customer, but they (customer) don’t see in the same direction?

Most of the time to attract customer interest, Sales person start to dropping the price in the mistaken belief that in doing so the customer will suddenly realize the benefit of their product/services and decide to buy it. The sales person thinks they’re negotiating but in reality they’re haggle with some one who don’t have interest to buy the product from them. What should you do to help the prospect from say “No” to say “Maybe” and by then you can start to negotiate?   

• 1.       Do a background research upon your customer to find out difficulties and the pain they might be facing
• 2.       Ask question to the customer about their difficulties and what cost to them, and then
• 3.       Ask question to help discover what might it take to move from their Status Quo position using “Under what circumstances”

a.       Under what circumstances would you consider to spend $ 40,000 unbudgeted spend this year?

b.      Under what circumstances would be able to give commitment within this week?

c.       Under what circumstances would your director able to agree on this?

If your prospects tell you some circumstances he would agree or to consider, then they have move from their Status Quo position and you’re now able to negotiate. But if there aren’t, don’t waste your or their valuable time to explore further or don’t push for a lower price  . You can revisit them later.

In many occasion, Negotiation should not begin until the sales process has been tried and failed because by definition negotiation has a cost. If we can avoid paying the cost by persuading the other person it would be great. But recognize when you need to move on.

The most important question for every seller should be asking themselves is NOT “How I can sell my products/services to this customer” but “HOW I CAN GIVE THIS CUSTOMER WHAT THEY WANT ON TERMS THAT ARE ACCEPTABLE FOR ME”. But for every seller to find the answer of the most important question, required combination skills of Listening, Negotiating Dialogue, Propose, and some other skills.

In SCOTWORK this skills is practiced through 3 days intensive course. With tutor ratio of 1:6 participants, help them to learn the skills better and faster. 3 month upon completion of the course, the participants progress will be follow up to see if the course has delivered impact to the working environment. In average after 10 years of doing this study with more than 200,000 submitted data, we able to convince that SCOTWORK course has delivered 10 X ROI for each participants in just within 90 days.

About the author

Handito is highly talented and well experienced Top Level Management person who has background career in operation for some Forbes 500 companies, big 4 consulting, and also being part of Executive Management Level with a lot of exposure on strategy development & execution, business development, commercial negotiation and operational improvement . He is certified of Business Management, Black Belt Six Sigma and Lean Manufacturing Expert with experience more than 10 years in hands on and manage Business and Improvement Project in various function from HR, Manufacture, Sales, Finance, Supply Chain, and Safety and deliver business impact more than $ 50 Mio

Area of expertise : Business Development,  Negotiation, Strategic Planning and Execution, Operational Improvement