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Difference Between Selling and Negotiating

The fundamental difference between selling and negotiation is that selling is a process to identify the fit between what the seller is offering and what the buyer is seeking.

Negotiation is the process of agreeing the terms of the deal and is part of the selling continuum. Yet the negotiation should only begin when there is a genuine commitment from the buyer and seller towards a conditional sale.

It is a bit like dating; usually a person is unlikely to book a restaurant until a date has been agreed to. Equally, the person being asked for a date would not particularly care about the restaurant choice unless they were sufficiently interested in attending the date. Once the date has been agreed it’s simply a matter of agreeing/negotiating the type of restaurant, location and time. When an individual is or has committed to do something, their level of interest rises dramatically, which is why the negotiation phase can be a hotbed of emotional intensity and tension.

Excellent salespeople use the selling phase to lay the ground rules for a possible future negotiation by ensuring that they fully understand their prospect’s requirements and decision making process, whilst planting seeds and setting the tone for the negotiation phase.

If, for example, you do all the giving through the selling phase, you have established the pre-supposition that you will continue to do all the giving in the negotiation phase. The transition from selling to negotiating can only occur when the desire to do business has been evoked in the prospect.

So, always start with the end in mind:

The benefits of a well-negotiated deal can have a major impact on bottom line profit and naturally, when the buyer and seller enter into a negotiation they both want the best possible deal for their own organisation.

It is little wonder that negotiations are viewed as competitions, where the outcome has to yield winners and losers. The ‘winning’ negotiator may experience short-term gains, yet long-term gains may prove harder than winning the lottery. That is why the process of creating an agreement that each party will willingly fulfil is referred to as Win-Win and provides increased probability of sustaining long-term customer relationships.

Every negotiation has the potential to achieve one of the following outcomes:

Win-Lose: Where your customer wins a better deal at your expense and can lead to an unprofitable long-term relationship, because you have conceded too much to sustain future account servicing and growth.

Lose-Win: Where you win a better deal at your customer’s expense, which can cause bitterness and resentment, resulting in cancellations and a myriad of issues that stem from negative emotions.

Lose-Lose: Which is symptomatic of inflated egos on both sides that are prepared to ‘fight to the bitter end’ just to do a deal. This outcome creates bitterness and relationships are unlikely to continue past the short term.

Walk-Away: Which is actually a better outcome than all the above, because it preserves the possibility of a future relationship that is profitable for both parties.

Win-Win: Where both parties have made concessions, yet both the buyer and the seller are willing to comply with the agreed terms and share a perception that the outcome was fair to both.

Recognizing the importance of Win-Win outcomes is the first step towards planning to create an environment where both people are willing to share information and invest time in the negotiation process.

Some people see themselves as natural, spontaneous negotiators, which may get the adrenaline pumping, yet a lack of planning can result in lost revenues, lost opportunities and lost time. Thorough preparation is more likely to create and instil a high level of self-confidence, as well as create an increased probability for a Win-Win outcome.

Finally, here is a useful checklist of questions that will ensure good preparation practice:

  • Who has the most advantage? (the better bargaining position)
  • How strong is your proposition?
  • How strong is the other party’s proposition?
  • What will you and the other party be asking for?
  • What are your options and alternatives?
  • What is the cost/value of each negotiation point?
  • What are the other party’s worries, frustrations and motivations?
  • What are the fixed and variable points from all sides’ perspectives?
  • What ideally do you want to achieve?
  • What is your fallback position from which you are not prepared to move?
  • What are your fixed points?
  • What can you use as concessions if you decide to trade?
  • What are the real issues for you?
  • Who will be attending the negotiation?
  • What are their roles?
  • What are their positions?
  • Is the decision-maker present?
  • In your team, what roles will you be taking?
  • Who will handle which issues?
  • How would you describe the negotiation style of the other party?
  • How will this affect your own approach in the negotiation?
  • What did you learn from your last negotiation that you can apply to this one?
Categories: General
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