Exhaustive preparation is more important than aggressive argument.12 Robert H. Schuller offers invaluable advice in this crucial step.13 First, a salesperson should prepare from both counterparts’ points of view by identifying the similarities and differences of the goals and objectives of both sides. Then, information sources are tapped. The information might be from business associates, buyers’ websites, or even previous vendors for the same buyers. The salesperson should bear in mind that negotiation is an information game: the more, the better.14

The next logical step in this preparatory process is to decide who will be in the negotiations. For Susana Rosas at CB Richard Ellis working in a business-to-business selling context, it is not unusual to create a cross-functional team consisting of individuals from finance, construction, and zoning to bring to a meeting with the buying center at the buyer’s premises. Other situations might call for her to bring senior managers from her firm. If teams are involved, make sure there is a leader and establish guidelines for information exchange among the team members. Creating a cohesive negotiation team can pay off with higher ending profits after the conclusion of negotiations.15

It is important for Salesforce.com’s Dave Levitt to know what is of real value to the customer and not consider value only in terms of purchase price. The real value of what you are offering may be a value-added intangible such as expert product knowledge, superior configuration programming, seamless integration with other vendors, short set-up times, effective training, product support, or a reputation for honest dealings. An important aspect of the negotiation process is discovering what is of utmost importance to the buyer (see Table 13.1). The focus of personal selling today should be the mutual search for value. Some salespeople make the mistake of offering a lower price the moment buyer concerns surface. In the customer’s mind, price may be of secondary importance compared with the quality of service after the sale. Detailed tactics for creating values in formal negotiations appear at the end of the chapter.

Two important concepts warrant mentioning. First is BATNA (Best Alternative to Negotiated Agreement), defined as “what alternative(s) will be acceptable to you if your negotiation does not succeed.”16 You will likely make concessions in formal negotiations; therefore, you must assess both your and your customer’s BATNA. The second important planning tool is ZOPA (Zone of Possible Agreement), defined as the space between the seller’s walk-away point and the buyer’s highest willingness to pay.17 The walk-away point represents the lowest offer a party would be willing to accept and is also called the “reservation value.” For example, if your walk-away point is $42.65M and the highest price the buyer is willing to pay is $48M, your ZOPA is any offer that falls within this range, or a zone of $5.35M (= $48M − $42.65M).18

Ed Brodow (www.brodow.com), popular speaker, international consultant, and author of Negotiating Bootcamp, contends it is best to aim high when configuring your solution. In his new training video, “Six Principles of Negotiation,” he suggests doing your homework and preparing a range of terms that include the maximum you could expect to receive, what you would hope to receive, and your bottom line or the minimum you could accept before having to walk away from the sale. In many buying situations today, buyers expect there to be alternative solutions with alternative pricing.

An agenda outlines what will and will not be discussed and in what sequence. As the seller, you want to achieve “small wins” to create goodwill before dealing with tough issues. Therefore, you want to prioritize these items on your proposed agenda. Sometimes items should be discussed simultaneously, rather than sequentially.19 Experienced buyers, however, also come to the meeting table with a detailed agenda. Negotiations might start with a discussion about the agenda itself.

The successful negotiation of buyer concerns is based in large part on understanding human behavior. This knowledge, coupled with a good measure of common sense, helps us overcome most buyer concerns. In one-on-one negotiations, adaptive-selling styles are useful (review Chapter 5). The Platinum Rule of negotiating is, “Do unto others as they want to be done unto.”20 When negotiations are conducted in teams, the situation gets more complicated. The role of the negotiation leader is to maintain smooth information exchange and foster strong relationships despite various communication styles.21

Your planning must be systematically organized. It helps to predict and classify possible resistance with the aid of a negotiations worksheet. To illustrate how this form works, let us review an example from the food industry. Mary Turner is a salesperson for Durkee Famous Foods. She represents more than 350 products. Mary calls on supermarkets daily and offers assistance in the areas of ordering and merchandising. Recently, her company decided to offer retail food stores an allowance of $1 per case of olives if the store purchased 15 or more cases. Prior to talking with her customers about this offer, Mary sat down and developed a negotiations worksheet, shown in Figure 13.3. We cannot anticipate every possible problem, but it is possible to identify the most common problems that are likely to arise. The negotiations worksheet can be a useful tool.