How to handle tough negotiations

There is not doubt that as the economy slows negotiations become tougher. Organisations look to reduce cost as they tighten the belt for what they believe are difficult times ahead. They take a more cautious approach on purchases due to the uncertainty. Investment decisions may even be delayed putting pressure on suppliers to cut prices to flush out a deal.

Essentially this situation makes it really difficult for the inexperienced negotiator who is likely to encounter all kinds of comments and tactics. Being able to skillfully handle tough negotiations is never more important than in an economic downturn.

Everyday, business is negotiated and if done well both sides should feel that they have secured an acceptable deal. This is know as a win-win agreement. The secret to getting a win-win agreement is planning, dialogue and a good knowledge of the process and skills of negotiation. Like most things in life negotiation can be learned.

Here are some of the classic one line tactics that buyers use to get you to concede to their demands or at least put you under sufficient pressure to gain some kind of concession.

My budget won't stretch that far.

You will have to do better than that.

I only have £25,000 in the budget.

Can you itemise your costs in your proposal?

If you stick to that price you will not get the order.

I will buy if you can reduce your price by 15%

Your competition is offering 20% less than you.

It's my final offer. Take it or leave it!

A skilled negotiator knows how to prevent or diffuse the above tactics.

Take for example the " I only have £25,000 in my budget". Is this real or simply the client trying to lower your expectations. In essence you have a problem. Should I take this budget figure as read or challenge it? How do I find out if this statement is real or not? The client might actually have £30,000+ in the budget. If I accept this statement without challenge then the client is in pocket to the tune of £5,000+.

The best way to handle this is to give the problem back to the client. Say something along the lines of;

"That might be a problem. We have lots of products and services that I think may help you with your requirements. Some are more expensive than your budget however they may actually reduce your overall costs. Are you saying, that if I have a solution to your problem that exceeds your budget, I should not bring it to your attention"?

This now transfers the problem to the client. If he/she says the budget is the budget then you can move forward in the knowledge that it is real. On the other hand if you get the go ahead to bring solutions to the table, you are now placed to negotiate a better deal for both parties. Not to mention the small matter that you are more likely to agree a deal meaning more profit in your pocket and a satisfied customer at the same time.

If you would like to learn how to handle many of the common issues faced when negotiating why not attend one of our open courses designed to help you be a better negotiator.