How to deal with fast-paced negotiations.

Fast-paced negotiations need agility not speed.

Google

By Stephen Kozicki

There is more to life than simply increasing its speed.

Mahatma Gandhi

I have just returned from projects in Malaysia and Singapore. The region is fast paced, chaotic, and full of opportunities and pitfalls. When dealing with these opportunities and pitfalls I am surprised with how agile successful people and companies are.

Obviously in KL, the news topic was still the missing flight MH 370. There was much discussion around the slow response to the missing plane. Also around the multiple airline officials and government minister’s hasty responses.

Hasty responses often occur in critical negotiations. As the pace of the negotiation increases, there is an increasing danger of a hasty response instead of an agile response.

Successful management teams must become more sophisticated in their negotiations with key accounts. Management teams need to rethink and adapt their approaches for each major customer. Critical negotiations are a great place to learn agility over speed. Agility creates value and hasty responses descend very quickly into price discussions. 

The most powerful method we use to avoid hasty responses in live negotiations is preparing questions. Questions give you control over a fast-paced encounter and they allow you to manage the emotional responses to different approaches. The major benefit of questions is they prevent you making quick statements to defend your position. They also make you prepare better for negotiations with key accounts, you learn to look for real interests and not become blindsided by positions that people take.

Some of the best persuaders – salesmen, negotiators and psychiatrists – persuade with questions rather than statements. The power of questions to generate actions and commitment is well displayed in John Whitmore’s book Coaching for Performance. The only question to avoid is Why? During a negotiation this will produce only a defensive response because the other person sees it as a ‘blame’ question. Few people will answer this question truthfully and it often damages the rapport of a negotiation. Other ways to ask the why question are: what are your reasons for that? or how did you decide to do that? Some well know research in negotiation conducted many years ago showed skilled negotiators used questions twice as often as average negotiators.

To be agile in fast-paced negotiations, prepare good questions and you will avoid hasty responses that will lower your prices.

For unbiased, practical advice when planning for your next negotiation, contact us on +61 (02) 9450 1040 or Stephen@gordianbusiness.com.au. Please share any comments you have and subscribe to our blog at the top right of the page.

Chaotic changes requires agile responses

Google

by Stephen Kozicki 

The competitive market that we all operate within is changing fast; past successes are not predictors of future success. Your competition is changing and changing fast. The question is are you?

When we work on live negotiations we work hard with our clients to develop a strong value proposition; to know who the key decision makers across the table are and to find the best way to frame the value of the deal. A competitive advantage is now temporary; it is almost deal by deal.

Becoming more complex and chaotic is not just unique to business; it applies to cities and countries. Recently after a long period of economic decline, the city of Detroit filed for bankruptcy protection.  My American friends said that we all knew it was coming, but no one was agile enough or courageous enough to take a tough decision.

http://www.huffingtonpost.com/news/detroit-bankruptcy/

When you read some of the comments from the Huffington Post the changes to the car industry did not happen overnight; the changes occurred over a period of time. Too often in business, we hope that the trends we see are not permanent or will not impact our business. Today they often do impact our business with disastrous results.

The purpose of this blog is not to unpack the demise of Detroit, but to ask you these questions:

• Are you seeing chaotic behaviours in your markets by top accounts or erratic competitors?
• Are you making decisions quickly enough?
• Are you agile like a small mountain goat or rigid as a big rock?

In your new operating environment to gain a new competitive approach you need to use your extensive knowledge of: your key decision makers and how you can frame value for them.

Our experience is that great global negotiators spend more time preparing for the negotiation than the average performer. I would assert that there was enough information 15 years ago to allow Detroit to prepare for the chaos ahead and start negotiating for a different outcome. For a long time competition in the car industry had been chaotic. In Detroit their response to tough global competition was to continually drop the price of the cars produced, which meant value suffered.

Your market and competitors will change quickly and often use price as a weapon. Be agile in your response. Don’t drop your prices to match your competitors, leverage value based on your total solution. To find out how to leverage your value in negotiations click here: http://www.gordianbusiness.com.au/negotiating-with-style/.

For unbiased, practical advice when planning for your next negotiation, contact us on +61 (02) 9450 1040 or Stephen@gordianbusiness.com.au. Please share any comments you have and subscribe to our blog at the top right of the page.

Getting Past No

Google

By Gary Peacock

Are you facing some of your toughest negotiations? Are you constantly being asked to drop your prices? Are you finding it ever more difficult to get past “No”?

As business conditions remain tough, some of our negotiations get tougher. Our competitors are hungry for business and will aggressively drop their prices. So, more often we will face customers saying NO.

Some businesses will immediately drop their prices. This reminds me of a story told in Gavin Kennedy’s amusing and excellent introductory book ‘Everything is Negotiable’, originally published in 1982 and still in print. Explorers on a sled in the arctic are being chased by wolves and they decide to throw the wolves an Elk steak to stop them chasing the sled.  When they throw the elk steak, the wolves stop to eat it. The explorers think that has solved their problem. However, 30 minutes later the wolves are back chasing the sled even more enthusiastically.

In business, if at the first no from a customer we drop our price then we simply teach them to say no more often. Just like the wolves, they will be chasing our sled again looking for more Elk steaks, more drops in price.

We will talk in another post about the importance in presenting our value in ways to prevent price objections, in this post we will suggest a question that can broaden the range of negotiating variables beyond simply price.

A very powerful question to ask is; under what circumstances could you accept our offer? Typically, the first response of a customer is to say “only if you lower your price”. So, be ready with the amended question; Apart from price, under what circumstances could you accept our offer?

What else could you include in the package that would be of value to them to accept your price?  Expect the customer to go quiet, that’s the sign of a good question; they are thinking.

Be prepared to challenge them; is there nothing else we could do or add into the package? Sometimes they will say, you probably could not do this but if you could include X then we might be able to accept your price.

This question can transform the negotiation: from haggling on price to finding other sources of value for your customer; from fighting to finding joint value. For help in showing your customers the value of your proposition then call us on +61 2 9450 1040. Please share any thoughts you have on this below and subscribe to our blog using the RSS feed at the top right of the page.

How to avoid price discounting: the 2 keys to success.

Google

By Peter Browne.

Is your company facing increasing pressure to compete on price? Are your competitors cutting prices to secure volume, and are you being forced to respond? Are revenues and profits in steady decline? Do you feel helpless to stem the flow?

The long-term implications of price discounting are catastrophic; it creates a discounting mindset, it hurts your brand and credibility and reduces your capacity to reinvest and stay competitive.

There is no silver bullet; however there are two proven strategies you can employ to better manage a competitive pricing environment.

1. Manage your accounts strategically

Managing accounts strategically enables you to create a relationship where your full value is understood and regularly demonstrated. Customers understand where increased cost comes from, and the value it delivers. They see value beyond your products and services, because they value the relationship they have with your company. Relationships between executives, operational and technical teams create a strong connection that rises above product and price. Customers understand the value you have created for them in the past, and trust that you will deliver more value in the future.

If you have not created a strategic relationship with your major accounts you are not in a position to negotiate. Your account will not understand the value you offer. If you have not helped them understand your value prior to the negotiation process they will fall back on price.

2. Have a strong negotiation plan

Before entering into a negotiation, you should know you are the account’s preferred choice. You should be able to articulate the additional value your company has created for them so far, and understand what is important to your customer. Both the explicit things they state also the “below the waterline” considerations that you have uncovered.  Your demonstrated value and deep understanding of their business puts you in a strong negotiating position and a long way ahead of your competitors.

If you aren’t managing your accounts strategically and demonstrating your value, you are not in a position to negotiate. And there is no point having a great negotiating plan, when you have no value to leverage. One out of two won’t do; you need both.

We welcome your comments; or for help building your value with your clients, contact us on +61 2 9450 1040 or at mail@gordianbusiness.com.au

The secret of great Global Negotiators

Google

By Stephen Kozicki

In a consulting project in Beijing, the head of a global IT firm asked “What was the secret of being a successful negotiator?” In fact as they had global customers, “What was the secret of being a successful global negotiator?”

I shared many insights from past blogs, communication, planning, risk taking and cultural differences. She and her team listened intently and took many notes. At the end of the discussion there was plenty of agreement and nodding, but she still pressed for the one key item or the secret to success.

So let me share that with you. It is a secret passed down to me and all of us from Aristotle in his classic book called, Rhetoric.  This is a great book for researchers in the field of communication and negotiation, but a hard read. It’s a source of great knowledge for me in the quest of understanding the secret of negotiation success.

The secret is: balance your negotiation argument with logic and emotion.

I believe that Aristotle’s contribution, in his book Rhetoric, is one of the greatest foundation stones for better negotiation, persuasion, communication and argument that has been written. Sadly somewhere in our now insane politically correct world, the concept of argument as a tool for negotiators and communicators has become a negative word, but it is not.

If this was not a blog, I would spend pages talking about the battle that took place between Sophists, Aristotle and his buddies, (Socrates and Plato). Part of his basic premise was, using both logic and emotion stopped people trying to manipulate others. They could manipulate people with logic by omitting important information or by using guilt or fear to get someone to do something that is not in their best interest.

Aristotle saw the two elements were very persuasive because you the negotiator or communicator had to prepare with both knowledge (logic) and (emotion) to connect and persuade another person to reach an agreement. This took longer because the preparing meant that you had to understand who you were going to negotiate with and what you were trying to achieve.

If you want to read more, I would suggest that you purchase a copy of, “The New History of Classical Rhetoric,” by George A Kennedy, available in any good book store or through Amazon. It is a book that doesn’t just translate, it gives insights and active commentary for you. As noted by Wikipedia, it is generally regarded today as the standard scholarly resource on the classic book, Rhetoric.

To improve your negotiation planning, contact us on +61 2 9450 1040 or at mail@gordianbusiness.com.au .