How to Avoid the Most Common Mistakes when Negotiating with Customers

negotiating with customers

What are we talking about in this article?

Negotiation Pitfalls to avoid when sealing a deal with your customers

Negotiating is an art. A craft you must train. Here´s a guide to lead you on the right way.

Any negotiation can be stressful or cause some sort of anxiety, but the goal is usually always the same: to discuss politely and ultimately agree on a deal that benefits both parties according to their interests.

Whether you’re negotiating your salary at a new job, asking for a pay raise, or overseeing any kind of business deal, having good negotiating skills is key for every professional in every business, but is not as easy as it seems. The whole negotiation process can take quite a while no matter what’s on the table, and ultimately it may not come as an effective negotiation. That’s why you need to ensure your bargain is the right way. Even the smallest mistakes can cost you, and the deal is off.

Sometimes our negotiation mistakes are glaring: We accidentally reveal our bottom line, and criticize the other party without meaning to or getting our numbers mixed

Successful negotiation relies solely on the use of strong negotiation strategies and the understanding of what an optimal outcome would look like for your organization. As with any undertaking, success starts with laying a solid foundation and then being aware of potential traps to avoid along the way.

You will struggle in your career if you can’t negotiate effectively. You might end up losing business if you don’t take this seriously, or even worse the respect of your colleagues. Or, you might fail to solve problems that better negotiators can breeze through.

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The importance of negotiating skills

Negotiating is a skill that goes hand in hand with becoming a better salesperson. Your tasks can range from sales and purchase of merchandise to salary discussions, conflict resolutions, and even negotiating real estate transactions. It’s also a good skill to consider for your everyday life, not everything is about the money you know. Negotiating skills are life skills, so there’s a win-win situation right here. If you don’t care about developing these, you’ll face the consequences both in your business and your personal life.

What not do while negotiating

Right now, we’ll start with the don’ts. Here we present common negotiation mistakes and how to avoid them.

1. Don´t take anything too personal

Don´t let your emotions run wild on the bargaining table, business negotiations won’t go right if it affects you on a personal level. Besides if you let it hurt you, it will damage your productivity.

What can we do about it? For making it through unscathed challenge yourself and turn those moments where you feel attacked into moments of genuine curiosity to gain positive feedback. A good negotiator won’t let emotions override.

Be aware of what triggers you and know when to pull back from it when you feel things going in that direction. Know yourself.

2. Don’t over negotiate

While on the negotiation table, if you happen to be taking the lead, don’t push it. Negotiation tactics like this one consider the consequences of over-negotiating, you might get what you want in the long run but at what price?

Don’t put yourself in a position where you can’t go back because of overlaying. Look at the big picture here. You must take into account that this is a conversation with various steps and not just one encounter. Be patient.

3. Don’t accept a bad deal

The biggest mistake here is to think that you get what you want easily and fast. You’re wrong. There are no short-term negotiations in business. It can be a long, tiring, and stressful process. It can be easy to settle, but agreeing to a deal just to get one is not a smart choice, no matter on the side you are.

It’s important to remember that the best alternative to a negotiated agreement doesn’t necessarily imply that a deal is better than a no-deal. It can be discouraging when you’ve invested time and energy into getting a deal done, but it’s important to have that clarity.

Consider what will be your first offer and what you’re willing to sacrifice. Negotiating can be considered a win-lose, where you’ll want to make the most of that win, but you’ll have to consider that there is always something you might end up giving away. what does success look like? At what point am I comfortable with walking away? Take that into consideration.

4. Don’t rush

Be gentle and smooth, that’s being a good negotiator. Take your time to establish a good business relationship with the other party.

Always talk about yourself, share personal information with the other party let the other person know that although you’re in for the business, you’re into being friends. Making a connection is vital. Doing so can shift a negotiation upside down from adversity.

Don’t be afraid of pauses, taking your time gives you perspective and might unveil the right way to go on a conversation, so don’t underestimate it.

A negotiation doesn’t have to happen all at once.

5. Don’t make any assumptions

Be prepared, that is the key to any successful negotiation, with that being said, consider everything not just facts and numbers.

Keep this in mind: failing to prepare is preparing to fail. Not investing time in what you want, is investing time on nothing. Preparations mean gathering and understanding data but it also means developing awareness.

Gather as much data as you can, and in advance, be prepared to ask strong diagnostic questions to gain clarity. There is no way right road in any negotiation.

The more prepared you are, the better you’ll be able to navigate negotiation and improvise if necessary.

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What to do when negotiating

When the don’ts come to an end the do’s come to the surface. Here are some tips that can actually help you when negotiating.

1. Use words wisely when negotiating

You don’t have to talk throughout the entire negotiation. Say what you need to say and combine that with direct contact. This direct approach establishes confidence, making the other party more likely to accept your proposed terms.

2. Offer a win-win scenario

Any negotiation ending with one benefitting from the another in an agreement will lead to a faulty business relationship and possibly future grudges between the parties, so watch out. One-sided negotiations decrease trust and rapport. Both you and the other party should feel assured that you’re getting a fair deal.

3. Providing set terms instead of price ranges

Providing a price range only gives the buyer the upper hand. Buyers will focus on the low end of the price range and get the agreement locked at that rate.

4. Be the first to make an offer

Part of being a good negotiator is taking control of the deal. Making the first offer creates a standard for the contract, especially if you’re the seller.

5. Ask open-ended questions and be a good listener

Yes-or-no questions aren´t as effective and don´t produce details and context. Ask questions that help the other party understand the benefits of the negotiation, and make sure they understand the overall agreement. Listen to their concerns and objections, and counter them with answers that prevent doubt.

Common mistakes when negotiating with your client and how to avoid them

1. Failing to prepare

Even if you have a clear idea about what you want from a negotiation, you still need to prepare and rehearse your arguments carefully.

When you prepare, you feel more confident, which is important in life and any negotiation. If you can demonstrate your knowledge of the subject in question, the other party will take you seriously. And you’ll be less likely to forget something if you’re fully prepared – it’s important to include everything in your negotiation as it’s extremely difficult to get new demands after the negotiation has taken place,

If you’re entering into group relationships, sit down with your team beforehand and decide who is going to say what. Practice your pitch and clarify your arguments, perhaps using roleplay. Discuss what the other side is likely to say and what you´re prepared to compromise on. Make notes, and bring those to the meeting.

2. Not building relationships

There may be occasions when you have to go into a negotiation “ cold”, so you’re unaware of the other side’s wishes. But try to establish a relationship with the other party if you can. Just making small talk can build trust and give you a better insight into his goals, ambitions, or even fears about the negotiation process.

There might be some tough talking ahead, but you’re more likely to reach a satisfactory agreement if you establish a good relationship early on.

3. Being afraid to Offend

Trying to secure the best deal for yourself, your team or your organization can be daunting. You may be scared of saying the wrong thing, settling too early, or haggling. Perhaps you find rejecting other’s people proposals embarrassing or stressful, especially if your leadership skills are more consensual than directive.

You can address these feelings by remembering that there is a difference between negotiating and arguing. Unlike an argument, where each party makes the case for or against something, the aim of the negotiation is for both sides to reach an agreement. As both parties want different things, you can only arrive at this point through discussion of what you are and are not prepared to do – it’s just part of the process.

4. Not listening

You need to listen to the other person to be a successful negotiator. If you talk over him or ignore what he’s saying, it’ll be harder to find areas of agreement. You’ll also likely “put his back up”.

When you have good listening skills, you can learn about what the other person wants, identify whether you have any shared interests, and work out how far apart your positions are. Use active and empathetic listening techniques to understand her motivations and interests.

5. Not knowing your BATNA

The term “BATNA” stands for “best alternative to a negotiated agreement” originated in researchers Roger Fisher and William Ury’s 1987 book “ Getting to yes: Negotiating agreement without giving in.”

Essentially, even though your aim in negotiating is to get what you want, you need to decide what your next best alternative is. This means that you know when it’s best to cut your losses and walk away.

Decide on your BATNA before you enter your negotiations, and also make sure you know what a “good” outcome is, even if you don’t get exactly what you want.

Having a clear BATNA means you can push harder during negotiations, and potentially get a better deal than you expected, because you’ve kept your options open.

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6. Caring too much

You need to care about the outcome of the negotiation, but not so much that you make bad decisions because you feel unable to walk away. In other words, keep your emotions in check, treat the process as a game, and decide when to call it a day.

If you can turn your back on the negotiation, you’ll also be in a stronger bargaining position should the other party decide to try again. This is because the onus will be on him to improve his offer.

7. Assuming something is Non-negotiable

Imagine the following scenario: a star football ball player has signed a multi-million dollar, four-year contract with a top team. It’s a watertight agreement that will keep him and his revenue and sponsorship potential at the club for the term of the contract, complete with expensive penalty break clauses.

But he loses form in his first season and a rival team shows interest in him. Suddenly, the “cast iron” document with his club is negotiable, and the penalty break clause is up for discussion. It’s not an easy deal to complete but, the next season, he’s with a new club and all parties are happy.

This example shows nothing is off the table in negotiation, and it pays to take your context into account. If you think of everything as negotiable, you’ll have a lot more options!

8. Focusing on Price

Business Negotiations are often about money. But if you go into a negotiation process fixated on price – because you want to reduce it or protect it – you risk backing yourself or the other party into a corner.

Price is, of course, important, but it’s often just one aspect of a deal. Consider what else you could negotiate. For example, perhaps you can agree to an exclusivity clause, add additional services or improve the terms of your contract.

9. Trying to “Win”

Reaching an agreement might be more difficult if you expect to win outright, even if you’re entering the negotiation from a position of strength.

The most effective negotiation is where both sides leave the table feeling that they’ve gained something. They may not have everything they wanted, but they have enough for the deal to be worthwhile.

It’s important not to be greedy. If the other party compromises and the deal is acceptable for both of you, you could jeopardize it if you play “hardball” and put future negotiations at risk. In other words, know when to stop negotiating!

10. Giving an Ultimatum

If you use the words “This is the best and last offer” in your initial negotiation, there’s nowhere else for the discussion to go.

The chances of finding a compromise are much slimmer when you issue an ultimatum like this because you back the other party into a corner. This approach can also come across as aggressive and domineering, although it’s sometimes necessary to do this when the other party continues to try to “chip away” at your position.

Be aware, however, of the difference between giving an ultimatum and setting a deadline. Experienced negotiators often use artificial deadlines to encourage the other party to reach a decision, or to break a deadlock.

The downside is that it puts you under time pressure. The upside is that both parties are focused on reaching an agreement within the time frame, which can speed up the process of finding a compromise.

Concluding thoughts on negotiating mistakes

Awareness of all mistakes mentioned is half of the solution. The first step in successfully negotiating with a party that is making mistakes is to use the situation directly to your advantage.

The first step in avoiding these mistakes is accepting the fact that negotiating is a way of life in business, not an occasional special event. By recognizing that you do it every day, you can get better and improve your confidence simply from practice and learning from your mistakes.

When negotiating, always be pleasant and persistent without being demanding. Be professional at all times – do not get angry if a negotiation does not proceed in your favor, and don’t hesitate to enlist the help of internal and external subject experts as required.

Negotiate your way to success, rather than wait for random luck to favor you.

 

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