The Automatic Side of Win-Win
I once got a telephone call from somebody responsible for sales training at a big company. She said to me, “Mike, we need negotiation training for our sales force.” I said, “Great, you’ve pertained to the right location.” Then she said, “But do you teach that win/win working out where you develop excellent relationships but give away the store?” Incorrect option. It is not either you negotiate a good deal, OR you build great relationships with your customers. You can have BOTH.
There are two pieces to the win-win puzzle. The very first is what I call the automated win-win. The win-win is automatic due to the fact that, when a sale closes, both you and your consumer are always better off than you were when you started to work out.
Let’s state that you sell a specific niche software program for engineering consultants. The rate of the software is $15,000 for a site license as much as ten users (the bulk of your clients for this product are small shops with ten or fewer engineers). There are no competitive industrial products, and your real competitors are the work-around services that the engineers patch together themselves from other software that they currently have.
For this reason, your company sometimes needs to be aggressive on rate and, if you need to, you can go as low as $9,000 for a site license. $9,000 is the last stop. At $9,000, it is still a win for you. At any price listed below that you do not make adequate revenue and you are much better off walking away.
Now let’s look at a prospective consumer. They are a little firm with eight engineers, and they like your software. Unfortunately, things are a bit tight today, and they have $12,000 left in their budget for the software application. They understand that there is sometimes lots of versatility in software prices so that they will begin low; however, if they have to, they will pay the complete $12,000 left in their budget. Thus, $12,000 is their last stop. Even at that rate, they are still much better off purchasing the software application, and then they would be walking away.
How numerous places can we have a win-win? Anywhere between $9,000 and $12,000. Throughout that area, both parties are much better off than they would have been had they walked away. The space in between $9,000 and $12,000 is also the ONLY area in which the celebrations can make an offer. Any deal should be between $9,000 and $12,000 since above or below those numbers, and one party will have to walk away.
Therefore, no matter how hard the cost settlement was, when the sale closes, both you and your customer will immediately win since both of you are much better off than when the agreement started.
To have a genuinely robust win-win settlement, there’s a 2nd piece to this puzzle that we have to focus on. That includes the consumer’s feelings. Let’s pretend for a minute that you are the purchaser in this case, and I am the salesperson.
We are on the phone, and you say to me, “Mike, we like your software; however, it is a nice-to-have product, not a necessity, considering that we get the work done simply fine with what we have put together ourselves. If you want to make this sale, you will need to come down to $9,000 for the site license.”
$ 9,000 is my bottom line. I pause a minute. Then I state, “Well, that’s a meager price. It’s the end of the month, so, ok, I believe we can do that. Cut me an order for $9,000, and we’ll do it.
What is your responsibility as the buyer? Do you feel like you won? Or instead, do you start believing things like:
” Boy, was he ever preparing to rip me off at his $15,000 sticker price if he can truly go all the way to $9,000.’.
And even worse, “Oh my goodness, why didn’t I say $7,000 in the first place? I most likely might have gotten him even lower.”
Negotiation has to do with paradoxes. By jumping to my bottom line of $9,000 in one shot, I made it appear that it wasn’t a win-win due to the fact that initially, you will now feel that my preliminary prices weren’t reasonable, and 2nd, you fear that you still left cash on the table. So, in the end, you are not a pleased consumer. You are an unhappy consumer who is going to be an even harder mediator the next time you buy a software application.
Everyone has strong feelings about the outcome. Everyone wishes to feel like they won. It’s not the real numbers on the deal that count as much as the consumer’s sensation that they didn’t leave any money on the table. No matter how low a price they get, they will feel terrible if they think that they left money on the table. No matter just how much they paid, they will still contact well if they believe that they got the very best possible offer.
Now, envision a situation where you’ve reached an agreement, and you’ve shaken hands on that offer. Sadly, you want you never had to see that customer once again as long as you live. Do you know any customers like that? Does that take away from the feeling of a win-win? Of course, it does.
The 2nd crucial element of the feeling side of win-win relates to something you do naturally, which is to develop relationships, make people pleased that they worked with you, and all the other things that involve those individuals’ abilities that you are so skilled at. Clients will feel that it is a win if they like you and take pleasure in working with you.
Trust, Credibility, and Ethics
Have you ever shaken hands-on that offer with someone who you felt was a little sleazy? Does that eliminate the feeling of a win-win? Absolutely. The 3rd component of the feeling side of win/win pertains to the method you operate, your principles, your reliability, and how trustworthy you are. Consumers will feel that it is a win if they are comfortable with how you work.
A Real Win-Win Negotiation.
And so you can negotiate hard over money and other issues since, when the sale closes, you understand that they are much better off than if they had left. For that reason, it is automatically a win for them. What you need to concentrate on is their feelings. Please make sure that your customer seems like they got the best possible deal, that they like you and like doing business with you, which you are an ethical, credible person to do service with.
If you focus on the feeling side of win-win, the automatic side will look after itself, and you can come out with both a good deal and a delighted consumer who feels that they were involved in a genuine win-win settlement.