Negotiating to a win-win in B2B "Business to Business"
The ABC’s of negotiating!
If you search “negotiating” in Google, there are over 52 million possible items to read. Next, enter “The art of negotiating in business to business sales”, and there are still ~5 million items.
What’s the point!? You can spin your head when trying to understand strategy and tactics to negotiating in a business to business situation.
This is the first in a series of articles on negotiating at the beginning, throughout a buying cycle and the end of a buy/sell cycle.
Before reading this article and future articles it is worth reviewing the definition of negotiating and negotiating to a win-win.
Negotiating: Is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy various interests of two person/ parties involved in negotiation process. Negotiation is a process where each party involved in negotiating tries to gain an advantage for themselves by the end of the process. Negotiation is intended to aim at compromise.
Negotiating to a Win-Win – I like the view of “The Negotiating Experts” for the purposes of the articles that we will be authoring over the next few months.
The true meaning of a win-win settlement is a negotiated agreement where the agreement reached cannot be improved further by any discussions. So your outcome cannot be improved for your benefit, and similarly, the agreement for the other party cannot be improved further for their benefit either. By definition, there is no value left on the table and all creative options have been thoroughly explored and exploited.
I'll be discussing the following 9 "key" negotiating points and tactics right from the beginning of a buy/sell cycle through to final negotiations.
(Please note the step numbers mentioned below are noted in the "Shifting Concerns of Individuals Making Buying Decisions" in figure 1 below). As you may recall we provided a narrated article on figure 1 in previous newsletters. If you have a moment to listen again, you can go here.
1) Negotiating the first "substantive" telephone or in person meeting with a curious/interested buyer:
- Negotiating the steps to be followed in the first meeting, whether it is 15 minutes or 60 minutes.
- How to help the buyer feel at ease in agreeing to meet with you. Offering of a "quid pro quo".
2) Gaining agreement on what the next step(s) would be after the meeting held in 1 above:
- Gain commitment to continue exploring you and your company.
- Gain agreement on "what, when, who, and how" the next step(s) will occur.
3) Successfully negotiating price before the end of the buy/sell cycle with any or all buyers:
- How to establish when pricing will be provided through negotiations.
- Who to negotiate with concerning pricing and when it will be revealed.
4) Successfully negotiating the first few steps in the buy/sell cycle with a key buying committee member:
- What to do and what NOT to do.
- How to negotiate those next steps.
5) Negotiating with buyer(s) in a manner that reduces objections to your company, you, your products and services:
- How to do this.
- When to do this.
- What to do if it appears you will not be able to successfully negotiate this situation.
6) Negotiating successful access to other key buying members, if needed, in continuing a buy/sell cycle:
- Logic and "quid pro quo" to gain agreement on getting ALL interested parties involved in evaluating your company.
- Successful negotiating with EACH buying committee member involved in the buy/sell cycle.
7) Successfully negotiating agreement(s) on holding a "Solution Meeting" with one or ALL committee buying members and what the meeting agenda will be:
- What is important in this negotiation step.
- The steps in the negotiation(s) for this meeting.
- The ‘structure’ of this meeting.
8) Gaining agreement from one member or ALL members of a buying committee as to what, when, how, a formal evaluation of your company and products will be executed:
- Who will be involved.What will be involved.
- When will certain parties be involved.
- The art of gaining or closing for the next step during a formal evaluation.
- How approval of a step is done, when it is done, and with whom it is done.
9) Negotiating the end of the buy/sell cycle.
As many of you may know we published an article in November of 2010 on negotiating the end of the buy/sell cycle. Feel free to review our article from November 2010 titled "Negotiating the Close of a Sale with a Win-Win".
We do know this!
Many buyers (buyers are defined as ALL committee members that will be included in making a decision about your company and whether to buy your services and products), are very good negotiators, because, they buy many products and services besides yours, all week and all month long. They either learn how to negotiate, are taught how to negotiate, or observe negotiations for all types of products and services.
What they don’t do every-day is make decisions to buy/evaluate reasonably complicated or complex solutions and services. This is where YOU come in with expertise. So, we maintain that you are the expert in helping buyers make good decisions concerning your products, and, therefore, can be a valuable resource to buyers. Sometimes, though, you have to "negotiate" for the right steps to helping these buying committees make good decisions.
So, it is important that we have PLANS & OBJECTIVE(S) for negotiating, and have well thought out strategies and tactics to work with these buyers throughout the buying process.
I remember attending university classes and working for the dean of the college of business at The University of Utah. "Dr. George S. Odiorne" was the author of the college text "Management Decisions by Objectives", and I remember him telling our class. "It doesn’t matter which road you take, if you don't know where you are going". So let's take the high road to a win-win when working with business to business committee members.
We look forward to providing you with insights in future articles on "how" to successfully negotiate your way through an entire buy/sell cycle to achieve a win-win outcome. To follow along as the additional articles are written, use the RSS feed listed below or visit News You Can Use.