The ME B2B Summit 2019 brought together numerous professionals and interesting lectures for the B2B purchasing and sales audience.
One of the topics covered at the event was “Negotiation: Tactics and Tricks You May Never Have Realized”. After all, knowing how to negotiate is a strategic and very important differentiator for companies.
This lecture was presented by Live University's educational director, Alex Leite. The participants received a true lesson on negotiation and, in this post, you will be able to discover 5 tactics and tricks to get the best results in the art of negotiation.
Check it out!
The importance of negotiation
Negotiating is the art of resolving conflicts through dialogue and there is no denying its importance within companies.
Every day, negotiations take place, focusing on price, quality, delivery, speed and many other important points for an organization to remain competitive in the market.
But although it is such an ancient practice, it is not always easy to put it into practice, especially in times of financial and political instability.
Knowing how to negotiate can be a game changer for selling more and building customer loyalty.
Professionals who work in negotiation need to master all the techniques in depth. In addition, they also need to know how to deal with people with different profiles.
And then the question remains: do you know all the tricks?
5 Trading Tactics and Tricks to Start Applying Now
Alex's talk was presented in game format and the audience could participate, from start to finish, via cell phone.
Participants had to answer eight questions about negotiation to see who understood the most about the subject. In the end, a winner was chosen, who received a Xiaomi Amazfit bip a1608 Smartwatch.
Check out the 5 main steps to becoming an expert in B2B negotiation.
1. Planning is the most important part of a negotiation
It is difficult to obtain good results from a negotiation without having done some pre-planning.
When you don't have a goal, you don't know the other party you're negotiating with, you don't know the price limit you can reach and what the most important items are, the negotiation ends up being driven much more by emotion than by reason. This causes the company to lose money and opportunities to close good deals.
So rule number 1 is: always plan before you start a negotiation.
2. Define the negotiable items (price, service, delivery, contract, duration, etc.) to apply the trade-off technique
When the negotiable items are defined, the buyer can create a trade-off strategy, in which he replaces an issue that is not very relevant to his business with a more important one.
For example, when you have a full stock of a certain product, but you want to buy it cheaper. In this case, you negotiate with the partner, saying that you need to receive it in one or two days. Most likely, the supplier will not be able to meet the deadline. At this point, the buyer accepts the date established by the partner, but agrees to a discount due to the delivery time.
This way, you give up something that is not so important, since the stock is full, and you achieve low cost, which was the initial strategy.
3. Beware of the “good guy and bad guy” tactic
This is the oldest negotiation technique. Here, you negotiate in pairs, with a pre-defined strategy, where one professional presents the bad side of the deal and the other presents the positive alternatives in the context. In this discussion, there is always a balance between “the good guy and the bad guy”.
However, it is necessary to be very careful with this technique, because if both professionals involved in the discussion are aware of it, the result will be a huge disaster.
So rule 3 is: be careful with the other party's level of experience when applying it.
4. Never split the difference in a negotiation
During a negotiation, regardless of whether you are a buyer or a seller, never owe the difference. Once it is accepted, the trader automatically reveals that there is a margin.
For example, if you are negotiating a product for 1000 reais and the other party for 500 reais and the offer to divide it by 750 appears, do not accept it, as this will reveal that there is a margin in the negotiation.
In situations like this, the most correct attitude is to divide the offer value (750) by the amount being negotiated (500 or 1000).
This way, you end up minimizing the margin and making a profit.
5. Set the Zone of Possible Agreement (ZOPA) value
Also known as ZOPA, the zone of possible agreement is extremely important. Through it, you define minimum and maximum acceptable limits to achieve an agreement during the negotiation.
Let's imagine the following scenario: you want to buy a certain product and the maximum amount you are willing to pay is 9 thousand reais. If you can afford it, 8 thousand is great and 7 thousand is the perfect scenario. However, if you can't close the deal for more than 9,5 thousand, you won't be able to close the deal. The supplier wants to sell the product for 10 thousand, but can adjust the price up to 7,5 thousand, because below that, they will start to lose money.
The logic of ZOPA is to capture the gap between the buyer's and supplier's margins, and the result of this is the zone of possible agreement to negotiate. It is not easy to discover these margins, since, often, the first meetings are scheduled to gather information. However, with patience and good communication, it is possible to get there.
These were the main insights from Alex Leite's talk at the ME B2B Summit 2019. If you liked the content presented, leave your comment.
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