It matters not on which side of the political fence you sit. The COVID Pfizer Vaccine rollout bungle can teach us all some very critical lessons about crucial negotiation mistakes to avoid.
If there’s one thing a Salesperson cannot afford to get wrong, it is an effective Sales Negotiation. We are living and working in an age where competition between businesses is fierce. Additionally, information is now more readily available to customers more than ever before. Therefore, it is vital that Salespeople have the skills and knowledge necessary to Negotiate and close every Sale.
Having said that, equally as important to having the skills to know what to do, is also being aware what not to do.
Here are the Top 8 Negotiation Mistakes that will Blow Your Deal. Take note and learn from mistakes. Ultimately, it could be the difference between winning and losing your next deal.
Mistake 1: Boasting and Bragging
By all means tell your colleagues what a great Negotiator you are. But don’t boast about it so much to the prospect. Critically, what you end up doing here is setting up a Win-Lose dynamic, which will only harden your negotiating position.
Mistake 2: Threatening “No Deal”
Best practice in Negotiation says that you should always have a BATNA. That is, a Best Alternative To a Negotiated Agreement. That said, you should never use your BATNA to bully or threaten the other party in the negotiation. Consequently, this will destroy the trust with your prospect. And crucially, it gives them power to weaponise their BATNA against you!
Mistake 3: Unprepared and Unaware
Remember the 5Ps?! Proper Preparation Prevents Poor Performance. You must properly prepare so that you put yourself in the strongest position for a Sales Negotiation. Proper preparation is a two-step process.
Firstly, it is crucial to know your product or service inside and out. That means, be able to answer any questions or provide as many value propositions as possible. But, the one aspect many Salespeople forget is knowing your customer equally as well. Doing so will ensure that you can react proactively and customise your value proposition to their particular pain points. This then arms you with the ability to also overcome any potential objections. Additionally, proper preparation allows you to have an insight into their buying processes, as well as their budgetary constraints.
Secondly, remember the power of an Efficient SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) and the crucial role it plays prior to any negotiation. Your SWOT Analysis determines whether one side needs the deal more than the other. It identifies potential weaknesses or threats that you may have that you may need to mitigate against in your negotiating strategy. Winning in Negotiations starts by thinking like an insider in your prospect’s business. If you can figure out where your prospect sees the greatest opportunity for growth, or the greatest need for defensive measures, you inevitably embed yourself into their strategic thinking. This leverage in thinking will give you the ultimate flexibility, or wriggle-room, in every negotiation.
Mistake 4: Failure to Establish Proposition
This is a significant one. A classic anecdote in good Negotiation is the TOTO Principal, Tale Of The Orange. The TOTO Principal puts the “Getting to Yes” in a Negotiation in simple terms.
Basically, a husband and wife both want an orange but they only have one between them. If they Negotiate in a Win-Lose way, they will split the orange into two. This turns it in to a Win-Lose Negotiation. Why? Because you often end up in a compromise that suits neither party. However, if the couple Negotiates collaboratively, they will discover that the woman wanted the orange peel to make jam and the man wanted to eat the orange fruit. Thus they reach a Win-Win position.
This is evident in the current Pfizer Vaccine bungle in this country. The Australian PM’s approach to the purchase of the Pfizer Vaccines was a compromise between Leaving and Remaining. This could have worked (see Mistake 6) but because it was perceived as imposed rather than co-invented it lost both groups of stakeholders. Both sides felt it was a hostile situation (see Mistakes 2 and 3), which delivered neither of their key objectives. Pfizer didn’t get the Sale, and Australia, well… the situation our economy, people, and society are in right now answers the question of who lost the most!
Mistake 5: Know your Negotiating Partner
We could have titled this “know your enemy” but, of course, the other player is not your enemy but your negotiating partner (see Mistakes 1 and 2). You need to understand who else your negotiating partner needs to involve on their side, to review proposals and reach an agreement. In the Australian Pfizer Vaccine bungle, there was clearly no appreciation of the processes Pfizer would need to use to keep its key stakeholders on board, and the constraints they were operating within. It was a one-way Negotiation by the Australian PM, which shot down all previous efforts of building trust and rapport.
Mistake 6: Lame Questioning and Lousy Listening
This mistake feeds directly from the previous one, but there’s more to this problem than ignorant assumptions. Many Salespeople love to talk. But when your lips are moving, you are not learning! It’s hard to sell if you don’t know why someone’s buying, so ask them. Ask short, open-ended questions. Like, “Can you say more about that?” or “What’s the concern?” or “Can you help me understand more about…” Then be quiet and listen. Get curious, ask clarifying questions. Focus on understanding and summarise what you think they said. By the time you are done, you will know so much about them you will have enough information for five years’ worth of business.
Mistake 7: Ignorant to Position Versus Interest
This mistake is at the core of almost any Negotiation or Sales mistake. First, definitions. A “position” is what someone says they want. It is their stated request or demand. An “interest” is the underlying motivator or reason behind the stated request or demand.
For example, your prospect may ask for a 15 percent discount. That is their position. As the Salesperson, we naturally assume they’re asking because they think our product or service is too expensive.
But if we asked, we might discover they actually think it is fairly priced. The reason they asked for the discount is because they have a limited budget this quarter, but they’d prefer to buy it all now instead of later. Once you identify the real reason for the request, many solutions emerge.
One option is to sell it all to them now at the full price but spread the billing over two quarters. Had you not gotten below the position, your response might have been to start by offering a five percent discount and hope to meet them halfway at ten percent. This would have cost you and still not have addressed their real need. This mistake can cost businesses millions of dollars and countless hours of wasted time and energy. Or in the Pfizer Vaccine Rollout Bungle, it could cost you the entire deal.
Mistake 8: Lacking A Solid Strategy
Lacking a Solid Strategy for how you are going to exactly drive your Sales Negotiation can be detrimental. You have now invested the time to gather as much knowledge about your prospect. And you are also completely educated in your product or service. It is then now time to plan out exactly how you are going to use that information in your Negotiations.
To Effectively Negotiate, this is not a time to wing it. For a Negotiation to end in your favour, it is crucial to have a clear Sales Strategy in place. A Sales Strategy that takes you from a defined opening point to successful closure. Also, unlike the Pfizer Vaccine Rollout bungle in Australia, you need to ensure your Sales Strategy has parameters that allow for negotiating flexibility but at the same time does not allow boundaries to be crossed. This will avoid situations where you are pressed for unprofitable prices or that may be damaging for future business relations.
- Don’t Boast or Brag
- Be Wary of Threatening “No Deal”
- Be Properly Prepared and Better Aware
- Establish Proposition
- Know your Negotiating Partner
- Ask Quality Questions and Actively Listen
- Find Out Both the Position and Interest
- Set a Solid Strategy
Akin to flying a plane – practice your Negotiation scenarios in a safe environment BEFORE you try to do the real thing! Learn Effective Negotiation Techniques. Having set and pre-practiced Negotiation tools in your kit puts you ahead of your competition even before you walk into the negotiating room. Proper, activity-based training is a vital part of every successful negotiation. This is also a valuable step in your team’s professional growth and development.
To Book Your Team on their ↑ Navigate the Negotiation Your Way ↑ Workshop either F2 Onsite or Virtual Training contact KONA on 1300 611 288 for a confidential conversation, or email email@example.com anytime.