Negotiation: Style of Negotiation
Negotiations can be done in many different ways. We’ve all seen sales persons apply their own personal style of negotiation to the process and have varying degrees of success.
One of the most prevalent styles associated with sales persons is the assertive or aggressive negotiation style. This has also been popularized through media which portray sales people as assertive, outgoing and at times anger filled individuals. They huff and puff during negotiations and do not give the customer time to breathe let alone think.
While this style may work some of the time, for example when the customer is in dire need of a product at that very time and do not have time to look for alternatives, the long-term effect of this style is less than desirable. Pushing your product or service aggressively down the customer’s throat serves to alienate them. No body likes being pushed around. The customer may buy the product from you if they are in a bind, but be sure that they will also start to shop around for alternatives.
The effect of this would be that you would make the sale, however you would fail in converting a long-term customer as you have not managed to create a relationship with the customer beyond the transaction. If the customer needs the product again, they are more than likely to remember the experience they had and balk from dealing with you.
On the other hand, there are sales persons with submissive presentation style. They always deal with the customer as if the customer has the upper hand in the deal making process. The result is that they end up giving up a lot of concessions which are unnecessary for conducting business. They have not established their own value and therefore they are unable to sell the value to the customer. If a customer sees an advantage, they are more than probable to take that advantage.
While the submissive style will also win the sale and probably create a more long-term relationship than the aggressive style, the relationship is unlikely to be long term as eventually the profits for your company will start to slide and someone from your company will pick up on it and ask for a review of the deal. Having this happen at a later stage is not something you necessarily want as it will reflect poorly on your skills and your business acumen.
The better proposition is to use a consultative or collaborative style where you involve the customer. The customer feels that they are involved in the decision-making process. Both parties treat each other with mutual respect and allow that each has some room for negotiation. Keep it open and honest, there are things you will be able to give concessions on and then there are some terms which you will not be able to modify. Work with the customer to discover what is of value to them and work on building those into your offer. Treat the customer with dignity and expect them to do the same. You are equal partners in making sure that the transaction occurs so that business for both grows.
Creating an atmosphere of mutual trust and understanding is important whether it is a small transaction or a large one and equally important for long-term relationship between you and the customer.