A STRATEGY THAT INCREASES IN VALUE


One of the greatest benefits of establishing an organization-wide negotiation strategy is that, once established, it actually becomes increasingly more valuable to your organization. The reason is that it fosters both organization-wide knowledge and organization-wide cooperation on a scale undreamed of in most of today’s companies. As already noted, fewer than 10 percent of all companies have a consistent and measured negotiation strategy and process. Because of that, in the vast majority of organizations every negotiation is seen as zero based and different from every other negotiation. But, as you now know, on a basic level all negotiations ultimately follow the same blueprint: Every negotiation entails perceived and real Consequences of No Agreement for both sides, as well as Wish Lists of items both sides want to obtain on reaching agreement. And when you have a negotiation strategy, and all your salespeople are tracking the negotiation process, few negotiations need be seen as either unprecedented or unusual because everyone in the organization has access to an enormous amount of invaluable data about previous deals, including:

  • The most common customer Wish List items by both customer and product/service type

  • The most common items your company asks for in return for these demands

  • CNA Gap analysis by both customer and product/service type

  • A library of CNA and Wish List questions used by everyone in the field

  • A library of effective Multiple Equal Offers by customer and product/service type

Let’s look, for example, at the first item on the list—the most common customer Wish List items. If you think of every negotiation as zero based, each time you have to negotiate with a new customer you’re going to have to figure out what they’re most likely to want. But imagine how much easier it would be for everyone in your organization if you’ve built up a database of information on your customers and know going in that the three demands you’re most likely to encounter are 24/7 service, a three-year warranty, and free upgrades. Armed with that information, any salesperson in your organization will not only be able to understand the underlying reasons for these demands but, even more important, will be able to think through, in advance, multiple creative ways to address those reasons.

For example, one of our clients, a liquor distributor, tracked this data and found that the most common demand from both retail stores and bars/restaurants was for a reduction in price per case. But they also learned that the underlying reasons for these demands were different. The retail stores wanted lower prices because they wanted to offer cases at a discount as loss leaders to attract people into the stores and thus increase their margins. The bars/restaurants, on the other hand, wanted the discounts because it affected their cash flow and because they wanted to use that money for marketing. In response, instead of lowering its prices, the distributor created value for both sides by developing mutually beneficial programs to drive store traffic and improve margins for the retailer, as well as help bars/restaurants better regulate their cash flow and develop successful marketing programs. Most important, though, is that the distributor was able to do all this only because they had gathered the information about their customers and shared it among all their salespeople, which in turn enabled the salespeople to be ready with creative options when presented with those demands.

This is, of course, equally true for every aspect of the Strategic Negotiation Process. Having a library of information—whether it’s about Wish List items, CNA or Wish List Estimations, or Multiple Equal Offers— enables you to anticipate, and prepare for, whatever demands your customers might make. Moreover, when this library has been established as a result of your developing both general agreement in your organization on where you want to go—your strategy, and how you’re going to get there—and your process, you have a distinct and enormous advantage over your competitors.




Strategic Negotiation. A Breakthrough Four-Step Process for Effective Business Negotiation
Strategic Negotiation: A Breakthrough Four-Step Process for Effective Business Negotiation
ISBN: 0793183049
EAN: 2147483647
Year: 2003
Pages: 74

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