I hope you all had a good weekend. This week I will write about Business Carrots. Often our clients use negotiation tactics to get lower prices from us when we try to close business deals. Clients often promise the world to get a lower price by offering hope for future business. It is like using a carrot to trap rabbits in a cage.
One of our potential customers suggests we drop our price by 20% and make them a better offer to get into their division. Once we are there, he says, we will be able to sell our services to all other divisions, and from then on, the volume will be huge. Does that sound familiar? A typical Business Carrot situation. When negotiating, it is important not only to know how much money is on the table but also what else could be at stake if you don’t succeed with your negotiation – such as time or effort invested into a project or relationship. There are three possible outcomes: win-win (both parties get what they want), win-lose (one person gets what he/she wants but the other doesn’t) or draw (neither party gets what he/she wants). When you are dealing with aggressive customers, adopt an assertive pacifism strategy. Resist fighting with customers, also do not let them take advantage of you. I have learned this from my previous experience in business negotiations with diverse people. Some will try and push your buttons until they get what they want. The key is finding out what motivates them and playing on that motivation rather than getting into an argument about it.
Negotiation is all about understanding the other person’s needs, wants, limitations, and sticking points. To uncover what might be more important for your customer than money; it’s key not to make any moves until they have finished talking. If they don’t agree with something or want something different from what was originally agreed upon, this doesn’t mean that it’s time for a fight – just listen and understand their point of view before responding so that both parties feel heard and respected.
Negotiating for a business deal is not always about pricing. Other factors have different values to the buyer and seller. The best way to negotiate is by giving something of high value to the customer but has little cost to your company. Good examples of this would be the timing of delivery, customization, or assurance of quality. If your customer wants a discount on the price, then it might be better to talk about these areas instead (if they’re valued more highly by the customer) than an additional percentage off from your initial offer. Now, these are your Business Carrots to lure them into doing business with you. As there is an old saying, “He who concedes first, loses.” Negotiating is a delicate dance where one side always has the upper hand. It’s about knowing when to push and when to give in for mutual benefits.
Thank you for reading.
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