Archive for July, 2010

This week has been an interesting lesson in the art of negotiations for me. For the past two and half years I’ve pursuing a business opportunity – an opportunity that opens the doors to a whole family of companies.

I would say during that time I’ve built a strong relationship with this potential customer. I understand their business. I understand the customers.  And I understand the industry.

After years of effort to find the right product for this customer I identified a product that I felt was ideal for the customer. The customer obviously felt the same because after a week’s worth of presentations and negotiations the customer said “If you can get me this pricing I will sign a purchase order.”

WoooHooo! Success! Right?

Unfortunately it wasn’t to be.

When I went back to the product provider, my partner, they absolutely refused to entertain any price concessions. I was amazed at the inflexibility. A deal was closed. All they had to do was say yes or at least make a counter offer to keep negotiations progressing.  My customer was equally amazed.   In the end, because of their inflexibility, my customer decided to pursue another product whose owners were willing to see the bigger business opportunity a small price concession up front would earn them over time.

Now I’m not recommending you have to concede on price in every negotiation. In fact, I think it’s the last concession that should be considered. But there are some rules to negotiation that lead to success.

  1. Recognize the customer has made the emotional decision to buy from you.
    If you are at the negotiating table the customer has made the emotional decision to move forward. He sees negotiations as proving ground to see how effectively you can work together as business partners.
  2. Negotiation is Win – Win!
    The entire purpose of negotiation is to create a win-win. Your goal is to create a relationship that is mutually beneficial. Negotiate with tomorrow in mind.  Every negotiation I enter considers the big picture. I ask myself “how can I direct the negotiation to facilitate today’s sale while laying the foundation for continued business in the future.
  3. Everyone can win!
    Many fall prey to the idea that if I concede a point I lose. That’s rarely the case. The whole point of negotiations is to create an agreement where everyone wins. The important thing for you to know is what areas you can negotiate and what areas need to stand firm. In my experience just about everything is negotiable.
  4. Understand what the other side needs
    Understanding the needs of the other side going into a negotiation enables you to prepare a solution.  Imagine how a customer would feel if during a negotiation a customer brought up a point and you responded “We anticipated your need for ___________________ and this is what we’ve prepared for your consideration and feedback”.  This demonstrates your ability to look out for the customer, anticipate his needs and offer a solution before or at the point of presentation. Trust me there is real power when you do this.
  5. Be creative and open
    Successful negotiators are creative. Find unique ways to do business. Be open to recommendations.  Investigate new ways to do business. Sometimes the best business agreement is one specifically tailored for your customer.
  6. Be willing to walk away
    Unfortunately you will from time to time encounter someone who views negotiation as a winner take all. You have to know when it is time to walk away. More importantly you have to be willing to walk away. This is a hard thing especially if you’ve been working to win a sale. But if a customer is difficult and unyielding in negotiations how is he going to be as a customer? Probably not one that you will enjoy or in the end will be profitable.

There is an art to negotiation. Come to the table prepared. Look for creative solutions. Maintain an attitude of win-win. Most importantly, maintain a willingness to serve your customer. If you follow these simple negotiation rules you will win nine times out of ten.

It’s really that simple.

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Author: Jody Sedrick
Entrepreneur, CEO, Sales, Mobility and Web 2.0 Expert
Twitter: @jodysedrick, @zenwareinc
LinkedIn: Jody Sedrick
Blog: http://adoptingdad.wordpress.com
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Over the past couple of weeks I’ve watched in utter amazement the utterly poor response by Apple to the technical design flaws in the iPhone 4 Antennae. Basically if you hold the iPhone with your left hand you run a high risk of dropped calls. When Steve Job’s was confronted by Rory Sinclair about the issue he responded to Rory “Just don’t hold it that way.”

It reminds me of the old joke. A man says to the doctor, “It hurts when I do this!” The doctor says, “Don’t do that.”

Come on let’s get realistic!

Apple’s latest response is for customers to purchase a bumper for $29.00 to protect you hand interfering from with the device.

Wow! Now I feel like the patient in the old joke only now the the doctor response “Don’t do that and pay the receptionist $150 on the way out”.

Why doesn’t Apple just give the bumpers away while they fix the problem? Don’t they realize the positive press and customer respect they would gain?

Apple could learn a significant lesson from Zappo’s. Earlier in the year Zappo’s lost $1.6 Billion to a pricing mistake on the 6pm.com website (see article http://blogs.zappos.com/blogs/inside-zappos/2010/05/21/6pm-com-pricing-mistake)

Two important lesson’s learned from Zappos

  1. Own your mistakes
  2. Inform the customer as to what happened, why it happened and what you plan to do to resolve the problem

In the end Zappo’s solidified their position in the hearts of existing customers and attracted new customers and boosts their brand image. All crucial factors to business’ success in today’s world of social interaction.

Apple could also learn a lesson from one of my developers who is helping one of our new customers out of a tough situation. In his words “They are feeling the pain and I am providing pain killers.”

Oh and by the way if you’re wondering I’m holding off buying my next iPhone until Apple resolves the problem along with 8 million other people.  Or maybe I’ll wait until Duct Tape and Band-Aid combine to a create the new iPhone technical assistance band-aid. (See CNN report “Got an iPhone you may need duct tape – http://www.cnn.com/2010/TECH/mobile/07/13/iphone.4.duct.tape/index.html?hpt=C2)