We’re in the middle of a couple negotiations between our customers and their top sales candidate selection. The companies are smaller and these positions are fairly important within the department so they are not “slotted” pay ranges that are more common in larger companies. Both negotiations have similar topics (salary and commission plans are always prevalent in sales negotiations) but different approaches by the candidates.
Call it serendipity, but I came across a timely SalesHQ article titled How To Structure A Negotiation. The author, Jonathan Farrington, provides 3 important steps for any negotiation whether it be for a potential hire or a potential customer:
The recommended structure for negotiations is:
1. Establish the issues being negotiated
2. Gather information
3. Build a solution
Here are a couple of excellent points from the article (my editing):
Stage 1. Establish The Issues
Many negotiators make the mistake of negotiating too quickly whereas skilled negotiators spend 20% more of their time asking questions and looking for alternatives.
Seasoned negotiators will often bring up an issue at the end of the negotiation, when you are vulnerable and likely to agree to a one sided (Lose-Win) concession, in order to conclude the deal. You can legislate for this ploy by asking the other side for their . “shopping list” before beginning the negotiation and refuse to accept any last minute additions to the list.
Stage 2. Gather Information
You need to decide, before the negotiation, how much you are willing to share information and what your own information requirements are. This will set the climate for the negotiation and will determine the amount of trust that exists between both parties. Skilled negotiators are able to ask a range of open, closed and follow up questions and are able to listen effectively. They also wait until they have all their information requirements, before making concessions.
Stage 3. Build A Solution
Typically, there will then be a process of bargaining, concessions will be traded and movement take place, until, hopefully, agreement is reached. Concessions should not be given away for free and you should be wary about conceding on issues for which you are not prepared.
One of our sales candidates added a new issue after receiving the offer. This is a good move on his part, but it comes with some risk. The negotiation will proceed at a measured level while we will see how he responds to the counter. I am not as measured in these instances – I prefer to call the bluff which has left me in a pickle more times than not. That is why I find Mr. Farrington’s suggestions valuable.