In our western culture, negotiate have a bad meaning. We are reluctant to do it in our professional life but even more in our private environment. However, after few trip in Asia and especially in Bali, Indonesia, negotiation is fast b
ecoming a game that saves you a lot of money… I’ve bought a small sculpture on the famous Ubud Market for 130 000 IDR (around 9,20€), but the initial price was… 350 000 IDR (around 24,70€) ! I’ve paid 100 000 IDR( around 7€) to a taxi driver, after a first offer at 300 000 IDR (around 21€).
Negotiation is more common in the BtoB than the BtoC, and depending on the activities, it become more in R2 or R3 (commercial meeting N°1, 2 or 3 with the same client)
In my view, negotiation must be brought on the table by the customers. Sometimes they ask you a simple thing like “Can you do something about the price ?”, this, doesn’t open the negotiation because the customer himself don’t believe in his request. It is up to you to agree or not with a price reduction or to open or not the negotiation and submit to your customer, for exemple, bigger quantity for a better price…
Some others clients are seasoned buyers who takes pleasure in making the sellers sweating. The only way to succeed is to prepare your negotiations, and to do so, you must know, before starting the negotiation, which points of your contract can be negotiable, it can be :
- Financial : price, payment conditions
- Commercial : quantity, contract length, exclusivity
- Technical : modification of technical points or special specification
- Logistic : delivery times, storage
Fix your limits… But also your objectives
Determine the minimum (price, quantity, delivery times, payment condition…) that you must not cross in order to not lose profitability.
Like always, determine also your objectives about the negotiable points is mandatory.
A point you should give a thought : is to know which initial price you should propose to your services or products. Because if your initial price is already pretty low on profitability, a negotiation about this point could kill your benefice and therefore there is no interest in this deal anymore.
Prepare your argument or prepare your failure
Before reconsidering your price or any other points of your contract, start with a good argumentation about the points that your customer want to discuss ; Why this price ? Why this delivery time ? With the technical point ?
If you are not able to justify the different points of your offer, how do you want to keep the advantage and to be credible in front of your client ?
And, often, a simple (but honest) justification about a point of your offer will be enough for your client to understand and agreed with the initial term of your offer.
Always obtain a counterparty
If you make an effort on one point of your contract, you must got a counterparty ! Obtaining a counterpart will also prove that your offer is thoughtful and serious, that your initial conditions are justified and not made on the head of the client. You make an effort, the client must do the same. Negotiation is a constructive exchange.
Your client ask for a better price ? Propose him to order a bigger quantity
For a longer payment term you could ask a bigger deposit
For faster delivery times, a more expensive price
And, again ! Prepare your arguments ! When I sold promotional goods with my advertising company, some clients asked me to have the delivery for yesterday ( yes you have the same client isn’t it ? )
With some suppliers, the delivery times could be reduce but it was with a more expensive delivery cost (counterpart), because I used express delivery by air and not trucks delivery (argument).
This was in most case enough for my client to agree with the additional delivery fees or to agree with normal delivery times. But if my client wanted to negotiate the amount of additional fees for express delivery, then, I proposed delivery date with guaranty, if there was even one day of delay, the order would not be charge at all ! (this service costed me nothing because it was a deal between my supplier and the delivery company) but my client was satisfied and safe, so he agreed !
you can help yourself to prepare negotiation with this tool :
|Points négociables||Limite basse (plancher)||Objectifs||Offre initiale||Arguments|
|Délais de paiement|
|Délais de livraison|
Negotiation request preparation and strategy. I’ve already helped a friend to prepare negotiation and also join the negotiation meeting for the acquisition of a company. Like often, an external and neutral view on the project help to find more options and solutions.
For any question, don’t hesitate to contact Monsieur B
And you ? how do you prepare your negotiation ? Share your experiences in the comments !