Tag Archive for: Sales TIps

Navigating Healthcare Sales Negotiations in a Changing Landscape

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Navigating Healthcare Sales Negotiations in a Changing Landscape

Strategies and Tactics for Success in the Evolving Healthcare Market

Are you and your sales/marketing teams trying to address significant challenges and barriers when negotiating with healthcare institutions?  In the rapidly evolving and challenging world of healthcare, it’s essential to adapt sales, marketing, and negotiation strategies to address the changing dynamics successfully.

Whether you’re dealing with hospitals, clinics, dental practices, imaging centres, group purchasing organizations (GPOs), or healthcare networks, this article will illuminate the evolving healthcare landscape and provide some valuable negotiation insights, strategies, and tips to improve results.

The Reality of Healthcare Sales Negotiations:

In today’s healthcare sector, sales negotiations are more complex than ever.  Procurement teams are becoming savvier negotiators – they are becoming skilled at evaluating vendors and leveraging situational power for cost reductions, added value delivery, and better contractual terms and conditions to achieve savings for strained budgets.  Despite their significant market dominance, even the billion-dollar healthcare suppliers will eventually face customer pressure to reduce pricing and add incremental value to win deals.

The following challenges facing healthcare sales and marketing organizations are problematic:

  1. Surgeons and key opinion leaders (KOL) no longer have the influencing or decision-making power they once did.
  2. Increased sophistication in healthcare product/services sourcing and assessment processes.
  3. Companies with proprietary healthcare products and innovations struggle for market share.
  4. Tight hospital budgets with high non-clinical overhead costs.
  5. Difficulty in reaching decision-makers.
  6. Turnover in healthcare procurement personnel.
  7. Healthcare value-assessment committees lengthening the sales cycle.
  8. Challenges in scheduling product evaluations and trials.
  9. Procurement’s obsession with cost savings.
  10. The continued use of request for proposal (RFP), request for quote (RFQ), and request for information (RFI) processes.
  11. Elongated selling cycles, poorly written value propositions, and weak day-to-day communication practices.
  12. Consultants are driving cost-cutting initiatives. …and many more.

In this article, I’ll delve into some of the intricacies of healthcare sales negotiations.  While I can’t cover everything in this article, I’ll provide several helpful insights, strategies, and tips to navigate this ever-changing environment.

The Changing Face of Healthcare Sales Negotiations:

Gone are the days when surgeons and clinicians solely drove product selection in healthcare. Today, procurement departments wield significant influence, and sales teams must adapt. Investing in negotiating skills training and revising your value proposition messaging is critical for success.

The Impact of Rising Healthcare Costs:

With healthcare costs continuously rising, institutions must cut expenditures while maintaining quality, value-based patient care.  Healthcare sales teams must understand the financial pressures faced by all members of the institution’s ‘buying centre’ and align their offerings and value propositions accordingly.

Negotiating with Procurement: A New Ballgame:

Traditionally, healthcare sales negotiations focused on surgeons and clinicians.  Now, suppliers must cater to the demands of procurement teams.  Don’t overwhelm healthcare procurement and supply chain personnel with too much clinical data; put all the regulatory and clinical information and detailed product specifications in the exhibit or appendix sections at the back of your presentations or proposals (where they belong.)  Don’t waste time showing supply chain personal information that will not influence the final decision.

Additional Insights and Tips for Successful Healthcare Sales Negotiation:

  1. Understand the Procurement Process: Learn procurement teams’ decision-making criteria and priorities.
  2. Understand the Buying Centre: Most sales organizations I teach need to learn how to develop a better working knowledge of the people in any institution who make or influence decisions.
  3. The Sales/Marketing Challenge: Improve alignment and cooperation between your company’s sales, marketing, and product management teams.
  4. Do Your Research: Carefully and thoroughly research customer personnel and information about each institution or customer.
  5. Stay Informed: Keep up with non-clinical healthcare industry trends, regulations, and technologies.
  6. Customize Your Approach: Tailor sales and negotiation strategies to each healthcare institution.
  7. Contract Negotiations: Understand how negotiations impact letters of agreement, supply agreements, and contracts.  Most organizations have seriously flawed contracts.
  8. Emphasize Value and Cost Effectiveness: Highlight the value and cost-effectiveness of your products and/or services. Also, determine the ‘switching costs’ if your company is the incumbent vendor for capital equipment, medical devices, equipment or supplies, and there is a risk of losing business to a lower-priced competitor.
  9. Build Strong Relationships: Foster positive relationships with procurement professionals.  Don’t avoid these people.  Don’t wait to be told by surgeons or other clinical personnel that you must “meet with purchasing” – after you’ve let the “value cat out of the bag.”

Conclusion:

In any aspect of healthcare, a one-size-fits-all sales, marketing, and negotiation approach no longer works.  As procurement teams gain prominence and dominance, understanding their needs is critical to successful negotiations.  As healthcare costs rise, providing cost-effective solutions becomes crucial.

Suppliers must spend less time on clinical product education/training and provide sales, marketing, and cross-functional personnel with training in real-world business skills.  Companies need expert troubleshooting advice and negotiation skills training to help build strong relationships with healthcare procurement professionals to secure mutually beneficial deals – without compromising patient care or relationships with clinical personnel.

Remember: A negotiated dollar is a bottom-line dollar.  You can’t make – or save money faster than when you’re negotiating.

Take Action and Invest in Our Expert Negotiating Training and Negotiation Coaching Packages, Negotiation Tools, and Online Course to Become a Better Negotiator.

» Negotiating Skills Training: Book a tailored in-house presentation, seminar or learning workshop for your organization.

Speaking Engagements – Industry Associations and Companies: Book a tailored, engaging, and impactful 60-minute to two-hour presentation at an upcoming meeting, conference or convention.

» Negotiating Coaching Packages: If your company is facing a challenging high-value negotiation and you need an expert to help you or your team – or you own a small business – or you’re an individual who needs practical negotiation advice, you can benefit from my investing in one of my three proven, results-producing negotiation coaching packages for individuals, small business owners or corporations.

» Digital Negotiation Learning Products: You can purchase my three E-books containing powerful strategies and tips.  E-books: Forensic Blueprinting Questions For Effectively Selling and Negotiating Price or Fee Increases and Managing the Price-driven Sale, Selling and Negotiating Price or Fee Increases in Any Economic Environment, and Strategies and Tips on How to Effectively Manage the RFP/RFQ/RFI or Bid/Tender Process to Optimize Results and Outcomes.

You can also purchase the Negotiating Personality Type and Corresponding Negotiating Style Self-Assessment Questionnaire and Interpretation Results and my NEW Digital MP3 “Greatest Hits” Verbal Negotiating Phrases, Scripts, Questions, and Questioning Techniques.  These helpful tools are in digital format and can be easily downloaded.

I provide a discounted Master Negotiator Bundle with all my Digital Learning Products.

» Online Sales Negotiation Course: If you’re in sales, sales management or a cross-functional role that supports sales, you can benefit from enrolling in my NEW self-paced Negotiating for Sales Success online course.

» Meet Negotiating Coach® Michael E. Sloopka

No part of this copyright material can be used without written permission from Selling Solutions Inc.

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The Illusion of Sales Negotiation Mastery: Unveiling the Truth About Some Sales Professionals

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The Illusion of Sales Negotiation Mastery: Unveiling the Truth About Some Sales Professionals

Overconfidence in Negotiating: A Common Pitfall

Many sales professionals believe they’re top-notch negotiators; however, are they?  This article explores why some people, especially those in the sales profession, tend to overestimate their negotiating skills.  Shockingly, eighty-seven percent of salespeople and sixty-seven percent of procurement and supply chain personnel never receive formal, in-depth negotiating skills training.

Negotiating is a crucial skill for salespeople, and while many salespeople claim they have sufficient skills, overconfidence can be their undoing.  Let’s dive into some common reasons why some salespeople and sales managers think they’re better negotiators than they actually are.  In this article, I’ll also provide some recommendations and strategies to address the pitfalls.

Lack of Self-awareness

A lack of self-awareness is one of the primary reasons some sales professionals overestimate their negotiating abilities.  Some salespeople and sales managers often fail to recognize their weaknesses, which leads to inflated self-assessments of their skill level, competency, and abilities.

Recommendation: Regularly assess your negotiating skills and seek peer and senior management feedback (only if the management has the expertise to provide effective coaching.)  Consider professional negotiating skills training to improve individual and organizational performance and business results.

Limited Understanding of Negotiation Strategies

Some salespeople mistake “bargaining and haggling” for negotiation.  Negotiation is not only about negotiating volume commitments, prices, discounts, volume rebates, and promotional or merchandising programs.  Negotiating is a complex process that involves various interdependent variables, moving parts, and strategies like careful needs assessment, value creation, problem-solving, and relationship-building.

Recommendation: Expand your knowledge of negotiation strategies, tactics, techniques, phrases, questions, and questioning techniques to enhance your skills.  If your company is not investing in professional development and training, take the initiative and enrol in a negotiating skills training seminar or workshop.  While reading a book on the topic might help – live training programs are more effective and beneficial.

Ignoring Emotional Intelligence

Emotional intelligence plays a crucial role in effective negotiation. Sales professionals who focus solely on facts and figures in discussions, presentations, and price—or solution-based proposals may miss their counterparts’ emotional forensic clues, leading to suboptimal outcomes in negotiations.

Recommendation: Develop your emotional intelligence by practicing active listening, empathy, and understanding the emotional aspects of the negotiation.

Underestimating the Importance of Preparation and Planning

Many negotiators, especially in sales, need to pay more attention to the importance of preparation and planning.  Some salespeople believe their ‘charisma, natural charm, and historically based instincts’ will carry them through, neglecting to invest the time and effort into the groundwork for successful negotiation.

Recommendation: Invest the necessary time and effort in thorough research and preparation before each negotiation.  Knowing your client’s needs and potential objections can give you a significant advantage.  Unfortunately, doing live, in-person role-playing involving real-world scenarios scares the daylights out of most salespeople.  However, role-playing is an effective way to practice new skills, learn more, and adapt.

Our Negotiating for Sales Success training seminars, workshops, and coaching sessions focus on having situational application discussions using real-world negotiating scenarios facing sales organizations.  We don’t believe in artificial role-playing or telling silly stories irrelevant to the industry the salespeople work in.

Sometimes entertaining stories are fun and suitable for people to listen to, and they may help to provide context or examples of how a negotiating strategy or tactic might work; however, I’m not sure what a story about a hostage situation has to do with critical commercial negotiation involving a large club or home improvement channel customer!

Failure to Adapt and Learn from Experience

Some sales professionals fall into the trap of using the same negotiation tactics (tricks or gimmicks) repeatedly, even when these tactics consistently yield subpar results.  Some salespeople think they’re skilled enough – but most fail to adapt to different and increasingly complex negotiation situations.

Recommendation: Always do a forensic autopsy (no, not that kind of autopsy) and analyze your negotiation outcomes, learn from your mistakes, and adjust your approach based on each unique scenario.

The Dunning-Kruger Effect

The Dunning-Kruger effect is a cognitive bias where individuals with low ability at a task overestimate their ability.  This is particularly prevalent in negotiations because those with the least competence often need more knowledge to evaluate their performance accurately.

Recommendation: Stay humble and always be open to feedback.  Be aware of the Dunning-Kruger effect, and only assume you’re a good negotiator through continual training, self-assessment, practice, and improvement.

The Role of Sales Managers in Negotiation

Competent and experienced sales managers with the right expertise are essential for developing their team’s negotiating skills; however, familiar challenges arise in this context.

Ineffectiveness of Some Sales Managers as “Coaches”

One common issue I encounter during our negotiating skills training workshops and coaching sessions is that some sales managers, despite their years of experience, may not possess the coaching skills necessary to help implement and reinforce the new learning with the members of their sales teams.  Some sales managers might excel as negotiators themselves; however, teaching and mentoring their salespeople in this complex skill can be an entirely different challenge.

Recommendation: Sales managers must coach their people using a proven negotiating methodology.  Sales managers need to coach using a negotiating ‘playbook.’  The negotiating playbook includes best practices and easy-to-use tools, templates, scripts, phrases, questions, and questioning techniques.  The playbook provides the foundation for effective coaching and mentoring by sales managers.  Nothing is worse than salespeople or sales managers with fifteen years of experience – one year at a time!

The Bad Habit of Taking Over Negotiations

Another problem is that some sales managers, eager to secure a deal, often take over negotiations their salespeople should be capable of handling.  This habit has nothing to do with the use of the ‘Higher Authority Gambit’ in a negotiation.  When a sales manager takes over a negotiation, it not only robs the salesperson of getting valuable experience but also sends a message that the manager may not have confidence in their team’s abilities.

Recommendation: Sales managers should empower their team by allowing salespeople to lead negotiations.  They can provide guidance and support from the sidelines.  The salesperson should have the opportunity to learn and grow through practice.  I realize valuable deals are in play, and some sales managers may be unwilling to risk blowing a deal so that a salesperson can get some much-needed experience.

Conclusion: Empowering Sales Teams for Negotiating Success

To address these challenges and maximize the potential of your sales team, it’s crucial to strike a balance.  Sales managers can become more effective negotiation coaches by improving their understanding of negotiating, mastering their coaching skills, and empowering their salespeople to take the lead in negotiations.

In the competitive world of sales, self-awareness and constant improvement are essential.  By addressing the challenges within the team and providing the proper fundamental training and guidance, sales professionals and their sales managers can collectively work towards becoming exceptional negotiators.  This approach will lead to better results and foster a culture of continuous learning and growth in the sales organization.

Take Action and Invest in Our Expert Negotiating Training and Negotiation Coaching Packages, Negotiation Tools, and Online Course to Become a Better Negotiator.

» Negotiating Skills Training: Book a tailored in-house presentation, seminar or learning workshop for your organization.

Speaking Engagements – Industry Associations and Companies: Book a tailored, engaging, and impactful 60-minute to two-hour presentation at an upcoming meeting, conference or convention.

» Negotiating Coaching Packages: If your company is facing a challenging high-value negotiation and you need an expert to help you or your team – or you own a small business – or you’re an individual who needs practical negotiation advice, you can benefit from my investing in one of my three proven, results-producing negotiation coaching packages for individuals, small business owners or corporations.

» Digital Negotiation Learning Products: You can purchase my three E-books containing powerful strategies and tips.  E-books: Forensic Blueprinting Questions For Effectively Selling and Negotiating Price or Fee Increases and Managing the Price-driven Sale, Selling and Negotiating Price or Fee Increases in Any Economic Environment, and Strategies and Tips on How to Effectively Manage the RFP/RFQ/RFI or Bid/Tender Process to Optimize Results and Outcomes.

You can also purchase the Negotiating Personality Type and Corresponding Negotiating Style Self-Assessment Questionnaire and Interpretation Results and my NEW Digital MP3 “Greatest Hits” Verbal Negotiating Phrases, Scripts, Questions, and Questioning Techniques.  These helpful tools are in digital format and can be easily downloaded.

I provide a discounted Master Negotiator Bundle with all my Digital Learning Products.

» Online Sales Negotiation Course: If you’re in sales, sales management or a cross-functional role that supports sales, you can benefit from enrolling in my NEW self-paced Negotiating for Sales Success online course.

» Meet Negotiating Coach® Michael E. Sloopka

No part of this copyright material can be used without written permission from Selling Solutions Inc.

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Mastering Negotiation: Five Key Insights for Greater Success

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Mastering Negotiation: Five Key Insights for Greater Success

Five Key Insights You Need to Know About Negotiating for Success

Negotiating is an integral part of our daily lives, and understanding negotiating dynamics can be a game-changer for people.  Negotiating is an essential life skill, and it’s a learned skill.  Whether you’re negotiating with customers, suppliers, contractors, employees, employers, cell phone providers, banks – or you’re discussing curfew with your teenager, below are five vital things to keep in mind:

1. Almost everyone is a negotiator – people are negotiating all the time.

You could be involved in a negotiation whenever you communicate with another person.  Negotiation isn’t just for labour disputes and negotiations, government trade talks, dispute resolution, mediations, and athlete negotiations with pro sports teams.

If you can master the art of structuring your negotiations so you get what you want and the other side can get what it wants, you’ll increase your success while eliminating anxiety, stress, and discomfort.  People need to stop negotiating based solely on their “instinct” – or a pattern of having some previous lucky outcomes that didn’t involve using proven negotiation skills.

2. Everything you want is owned or controlled by others.

If you want something, you’ll find it’s usually owned or controlled by someone else.  To get what you want, you’ll need to take the time to learn how to get it.  To achieve your goals, learn how to deal with people by helping them get what they want – rather than dominating or taking advantage of them.  Empower others to get what they want and watch the doors of opportunity swing open.

3. Negotiating involves predictable maneuvers.

Negotiation shouldn’t be a disjointed and chaotic process.  There are predictable responses to maneuvers that take place in most negotiations.  In our negotiating training seminars, workshops, and negotiation coaching sessions, we refer to these maneuvers as gambits and countergambits; they refer to strategic exchanges to gain an advantage in any negotiation.  The term gambit is chess parlance that means maneuver for advantage.

You will want to use certain negotiation gambits to your advantage; however, you will also need to know a wide range of gambits and countergambits, even those you might not use, to protect yourself if gambits are used against you.

4. Three essential factors can make or break your negotiations:

Information: Knowledge about the other side is critical.  Understand your counterpart’s needs, desires, and objectives.  Do your research well in advance of negotiating.  The side with the most useful information usually does better in a negotiation.

Time: Negotiations often have deadlines that add pressure. Use time wisely to secure favourable outcomes.  Time limitations add pressure for a settlement.

Personal Power: The ability to influence others is a potent tool.  Learn more about the eight forms of personal power and how to wield it while guarding against its misuse effectively.

5. People have four different personality types and corresponding negotiating styles:

Four major personality types influence a person’s negotiating style.  This is not about using a Myers-Briggs or DISC profiling self-assessment tool.  The four negotiating personality types include – Analytical, Pragmatic, Extroverted, and Amiable.  Learn more about your personality type, corresponding negotiating style, and how to interact more effectively with others.

Contact me to learn more about determining your negotiating personality type and corresponding negotiating style through a self-assessment questionnaire and interpretation information.

Summary:

By understanding these five fundamental principles, you’ll be better equipped to navigate the intricacies of negotiation, achieving your objectives, and fostering positive relationships.

So, whether you’re closing a multimillion-dollar deal or negotiating a household dispute, remember that negotiation is about more than just reaching an agreement – it’s about forging connections and achieving mutual satisfaction.

Remember, negotiation is not just about getting what you want; it’s about creating value and building meaningful relationships.  So, approach each negotiation with strategy, empathy, and a willingness to explore creative solutions, and watch your success soar.

Take Action and Invest in Our Expert Negotiating Training and Negotiation Coaching Packages, Negotiation Tools, and Online Course to Become a Better Negotiator.

» Negotiating Skills Training: Book a tailored in-house presentation, seminar or learning workshop for your organization.

Speaking Engagements – Industry Associations and Companies: Book a tailored, engaging, and impactful 60-minute to two-hour presentation at an upcoming meeting, conference or convention.

» Negotiating Coaching Packages: If your company is facing a challenging high-value negotiation and you need an expert to help you or your team – or you own a small business – or you’re an individual who needs practical negotiation advice, you can benefit from my investing in one of my three proven, results-producing negotiation coaching packages for individuals, small business owners or corporations.

» Digital Negotiation Learning Products: You can purchase my three E-books containing powerful strategies and tips.  E-books: Forensic Blueprinting Questions For Effectively Selling and Negotiating Price or Fee Increases and Managing the Price-driven Sale, Selling and Negotiating Price or Fee Increases in Any Economic Environment, and Strategies and Tips on How to Effectively Manage the RFP/RFQ/RFI or Bid/Tender Process to Optimize Results and Outcomes.

You can also purchase the Negotiating Personality Type and Corresponding Negotiating Style Self-Assessment Questionnaire and Interpretation Results and my NEW Digital MP3 “Greatest Hits” Verbal Negotiating Phrases, Scripts, Questions, and Questioning Techniques.  These helpful tools are in digital format and can be easily downloaded.

I provide a discounted Master Negotiator Bundle with all my Digital Learning Products.

» Online Sales Negotiation Course: If you’re in sales, sales management or a cross-functional role that supports sales, you can benefit from enrolling in my NEW self-paced Negotiating for Sales Success online course.

» Meet Negotiating Coach® Michael E. Sloopka

No part of this copyright material can be used without written permission from Selling Solutions Inc.

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Mastering Lease and Rent Negotiations: Your Path to Success

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Mastering Lease and Rent Negotiations: Your Path to Success

Strategies and Insights for Commercial and Rental Agreement Negotiations

In a recent interview with a senior writer for AmEx OPEN Forum, we discussed the art of negotiating lease and rental agreements.  While the article touched on several valuable insights, I want to provide more in-depth information and practical negotiation tips for mastering this critical skill.

Beware of Situational Power in Negotiation

Suppose you’re a business owner and you need to negotiate – or renegotiate commercial space for your operation – or you’re a new or existing franchisee in the hospitality business needing to negotiate space for your fast-food franchise – or you’re a student trying to negotiate to rent an apartment or condo.  In terms of negotiating lease or rental agreements, the first thing that people need to realize is that they need to – and want to negotiate in the first place.

Negotiating a lease or rental agreement can be overwhelming and stressful for many people.  Negotiating in difficult economic times can be challenging, and making mistakes can be costly.  This is especially true of the developer or landlord who has situational power and decides to use it.  There may be little negotiation flexibility if the landlord or their real estate representative wishes to use situational power!

An example of situational power is when a fast-food franchisee needs “XX” number of square feet in an easily accessible, high-traffic ‘bricks and mortar’ easy-to-access location with a drive-through capability and good parking.  After surveying the city’s most desirable area, the franchisee learns there are only two suitable locations – the same commercial landlord owns both locations.   The commercial landlord has numerous people interested in leasing the available locations.  The landlord could use this situational power to their full advantage.  In this case, the franchisee is at a disadvantage.  The franchisee should be prepared to pay the full asking price on a cost-per-square-footage basis, and negotiating leasehold improvements could be problematic.

The Art, Science, and Sport of Negotiation

Regarding negotiating leases, the first thing that individuals need to realize is that they need to negotiate in the first place.  Most people face the initial obstacle of believing that the other side involved in the negotiation has more power than they do – therefore, whether you are an experienced small business owner – or a student – people tend to believe that the landlord, developer, property management firm, or real estate representative have all of the power in the negotiation.

Negotiating is an art, science, and sport.  Indeed, it is an essential life skill designed to maximize outcomes.  However, too many people negotiate based solely on instinct – not skill.  People must understand whether the negotiation is simple or complex; a process, strategies, tactics, techniques, and proven scripts must be utilized.

Research, Plan, and Prepare

  • Research is critical in all negotiations, but most people don’t invest the time and effort to research effectively.
  • Proper preparation, planning, and information gathering are essential when negotiating leases or rental agreements.
  • Always start negotiating with the landlord or their representative by requesting a detailed proposal outlining the rental rate, fees, costs, terms, and conditions.  Getting the other side’s opening negotiating position first is critical to optimizing the outcome.

The Power of Asking the Right Questions

  • One of the most important questions I teach people in my negotiating skills presentations, training seminars, learning workshops, and coaching sessions is the “Under what circumstances…?” questioning technique.
  • For example, “Under what circumstances could we renew our lease at the current square footage costs?” or “Under what circumstances would you include $34,975.00 worth of leasehold improvements during the three-year lease?”  This effective questioning technique helps you understand the other side’s opening negotiating position.
  • Contact me to learn more about my proven verbal phrases, questions and questioning techniques for your negotiations.

Carefully Scrutinize Lease-Related Documentation

  • I advise everyone to ensure that people read all lease-related documentation carefully because the side that writes the agreement can include content that can work to its advantage – which entrepreneurs and individuals often overlook.
  • For example, many people don’t know that maintaining roofing, windows, doors, HVAC (heating, ventilation, and air conditioning), exterior signage, etc., is often the tenant’s sole responsibility.  Ensure that expensive items such as air conditioning and heating units are carefully inspected before entering into a lease or rental agreement – or negotiate to exclude your responsibility to maintain, repair or replace them.
  • Understand all the details associated with the lease’s gross and net terms and conditions because common costs are often overlooked.

Three things affect the outcome of negotiations:

  1. Information: The side with the most information and options usually negotiates more effectively, so, for example, gather relevant, reliable, and complete information about landlords, space, and locations and interview other tenants.
  2. Time: One version of the “80-20” rule is that 80 percent of concessions are made in the last 20 percent of the time left to negotiate, so be careful to avoid time-pressure tactics used by the other side. For example, a landlord or real estate representative might say – “If you want the space, you must sign the lease by 9:00 a.m. tomorrow.  If you don’t, we have other interested parties willing to sign.”  This time-pressure tactic can impact the outcome, and people sign agreements and contracts falling victim to time pressure.  Be careful you don’t fall for this tactic.  Assess the reality of time pressure by determining its validity. Be prepared with the right countergambits if this negotiation tactic is used on you.
  3. Personal Power: Another example of one of the eight forms of personal power is legitimate power in a negotiation. A person with the title of Vice President of Commercial Leasing has implied legitimate power.

Be Careful of “Funny Money”

  • Regarding monetary issues, never be seduced when someone uses “dollars per square foot.”  In a negotiation, this is referred to as “funny money” – presented with the lowest common denominator (e.g., only $7.50 per square foot) to persuade you to sign the lease.  Instead, always calculate the fully loaded costs for your square footage, which include rent, common costs, and taxes.

Always Use “Odd Numbers” when Negotiating

  • When presenting counterproposals to the landlord or landlord’s representative that deal with negotiating numbers, never use zeros and always use odd numbers.
  • For example, “Based on our research, $7.00 per square foot for this type of space seems high.  Although we are interested in renting from you, after calculating the numbers and reviewing our budget, we propose $6.17 per square foot.”
  • Keep in mind that a negotiated dollar is a bottom-line dollar.  Every dollar you save in the negotiation falls directly to the bottom line, and people can’t make money faster than when they negotiate effectively. A negotiated dollar is a bottom-line dollar.

Always Broaden the Scope When Negotiating:

  • Learn how to “broaden the scope” of your negotiations.
  • If you can’t negotiate lower square footage costs, ensure you negotiate items such as leasehold improvements, signage, parking, free rent or upgrades.
  • One of my clients, a local UPS franchise store owner, was prepared to sign a new lease with the landlord.  However, all the storefront windows were constantly foggy and dirty because the vapour seal in between the glass was faulty.  I taught him to effectively negotiate the replacement of all the glass panels as a condition of renewing the lease. The landlord agreed, so my client saved over $3,500.00 with this concession from the landlord.
  • If you already lease a property during any challenging economy, be prepared to renegotiate your existing lease with your landlord or their representative.  Generally, most landlords would prefer to make concessions to a current tenant rather than go through the time-consuming, complex, and expensive process of finding another suitable tenant.

The Value of a Real Estate Agent

Hiring a commission-based real estate agent may – or may not be a good idea. Don’t assume that a real estate agent, lawyer, accountant, or franchisor will properly or effectively manage lease negotiations on your behalf – many of the aforementioned are untrained and ineffective negotiators.

Summary

In any negotiation, understanding the intricacies of the process can make all the difference.  Learn to become a more skilled negotiator; you’ll be better equipped to navigate the complex world of leases and rental agreements.  Many individuals have shared their negotiation challenges and horror stories, emphasizing the importance of mastering this essential life skill.

Take Action and Invest in Our Expert Negotiating Training and Negotiation Coaching Packages, Negotiation Tools, and Online Course to Become a Better Negotiator.

» Negotiating Skills Training: Book a tailored in-house presentation, seminar or learning workshop for your organization.

Speaking Engagements – Industry Associations and Companies: Book a tailored, engaging, and impactful 60-minute to two-hour presentation at an upcoming meeting, conference or convention.

» Negotiating Coaching Packages: If your company is facing a challenging high-value negotiation and you need an expert to help you or your team – or you own a small business – or you’re an individual who needs practical negotiation advice, you can benefit from my investing in one of my three proven, results-producing negotiation coaching packages for individuals, small business owners or corporations.

» Digital Negotiation Learning Products: You can purchase my three E-books containing powerful strategies and tips.  E-books: Forensic Blueprinting Questions For Effectively Selling and Negotiating Price or Fee Increases and Managing the Price-driven Sale, Selling and Negotiating Price or Fee Increases in Any Economic Environment, and Strategies and Tips on How to Effectively Manage the RFP/RFQ/RFI or Bid/Tender Process to Optimize Results and Outcomes.

You can also purchase the Negotiating Personality Type and Corresponding Negotiating Style Self-Assessment Questionnaire and Interpretation Results and my NEW Digital MP3 “Greatest Hits” Verbal Negotiating Phrases, Scripts, Questions, and Questioning Techniques.  These helpful tools are in digital format and can be easily downloaded.

I provide a discounted Master Negotiator Bundle with all my Digital Learning Products.

» Online Sales Negotiation Course: If you’re in sales, sales management or a cross-functional role that supports sales, you can benefit from enrolling in my NEW self-paced Negotiating for Sales Success online course.

» Meet Negotiating Coach® Michael E. Sloopka

No part of this copyright material can be used without written permission from Selling Solutions Inc.

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Five Insights to Unlock the Secrets to Winning Negotiations and Achieving Success

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Five Insights to Unlock the Secrets to Winning Negotiations and Achieving Success

Negotiating is an essential life skill, and it’s a learned skill.

Negotiating is an integral part of our daily lives, and understanding negotiating dynamics can be a game-changer for people.  Whether you’re negotiating with customers, suppliers, contractors, colleagues, employees, employers, cell phone providers, or banks – or you’re discussing curfew with a teenager, here are five vital things to keep in mind:

1. Almost everyone should be negotiating – people are constantly negotiating.

You could be involved in a negotiation whenever you communicate with another person.  Negotiation isn’t just for labour disputes and union negotiations, government trade talks, dispute resolution, mediations, and athlete negotiations with pro sports teams.

If you can master the art of structuring your negotiations so you get what you want and the other side can get what it wants, you’ll increase your success while eliminating anxiety, stress, and discomfort.  People need to stop negotiating based solely on their “instinct.”

2. Everything you want is owned or controlled by others.

If you want something, you’ll find it’s usually owned or controlled by someone else.  To get what you want, you’ll need to invest the time to learn how to get it.  To achieve your goals, learn how to deal with people by helping them get what they want – rather than dominating or taking advantage of them in a negotiation.  Empower others to get what they want and watch the doors of opportunity swing open.

3. Negotiating involves predictable maneuvers.

Negotiation shouldn’t be a disjointed, chaotic, and anxiety-producing process.  There are predictable responses to maneuvers that take place in most negotiations.  In our negotiating training seminars, workshops, and negotiation coaching sessions, we refer to these maneuvers as gambits and countergambits; they refer to strategic exchanges to gain an advantage in any negotiation.  The term gambit is chess parlance that means maneuver for advantage.

You will want to learn to use certain negotiation gambits to your advantage; however, you will also need to know a wide range of gambits and countergambits, even those you might not use, to protect yourself if negotiating gambits are used against you by the other side.

4. Three essential factors can make or break your negotiations:

Information: Knowledge about the other side is critical.  Understand your counterpart’s needs, desires, and objectives.  Do your research well in advance of negotiating.  The side with the most in-depth and relevant information usually does better in a negotiation.

Time: Negotiations often have deadlines that can add pressure.  Use time wisely to secure favourable outcomes.  Line up all the details well in advance of any negotiation.  Time limitations and deadlines add pressure for a settlement.

Personal Power: The ability to influence others is a potent tool.  Learn more about the eight forms of personal power and how to wield it while guarding against its misuse effectively.

People have four different personality types and corresponding negotiating styles:

Four major personality types influence a person’s negotiating style.  This is not about using astrology or a Myers-Briggs or DISC profiling self-assessment tool to determine your negotiating personality type.  The four negotiating personality types include – Analytical, Pragmatic, Extroverted, and Amiable.  Learn more about your personality type, corresponding negotiating style, and how to interact more effectively with others.  Pay attention to “clues” that can provide insights into personality types.

Contact me to learn more about determining your negotiating personality type and corresponding negotiating style through a self-assessment questionnaire and interpretation information.

Summary:

By understanding these five fundamental principles, you’ll be better equipped to navigate the intricacies of negotiation, achieving your objectives, and fostering positive relationships.  So, whether you’re closing a multimillion-dollar deal or negotiating a household dispute, remember that negotiation is about more than just reaching an agreement – it’s about forging connections and achieving mutual satisfaction.

Remember, negotiation is not just about getting what you want; it’s about creating value and building meaningful relationships.  So, approach each negotiation with strategy, empathy, and a willingness to explore creative solutions, and watch your success soar.

Take Action and Invest in Our Expert Negotiating Training and Negotiation Coaching Packages, Negotiation Tools, and Online Course to Become a Better Negotiator.

» Negotiating Skills Training: Book a tailored in-house presentation, seminar or learning workshop for your organization.

Speaking Engagements – Industry Associations and Companies: Book a tailored, engaging, and impactful 60-minute to two-hour presentation at an upcoming meeting, conference or convention.

» Negotiating Coaching Packages: If your company is facing a challenging high-value negotiation and you need an expert to help you or your team – or you own a small business – or you’re an individual who needs practical negotiation advice, you can benefit from my investing in one of my three proven, results-producing negotiation coaching packages for individuals, small business owners or corporations.

» Digital Negotiation Learning Products: You can purchase my three E-books containing powerful strategies and tips.  E-books: Forensic Blueprinting Questions For Effectively Selling and Negotiating Price or Fee Increases and Managing the Price-driven Sale, Selling and Negotiating Price or Fee Increases in Any Economic Environment, and Strategies and Tips on How to Effectively Manage the RFP/RFQ/RFI or Bid/Tender Process to Optimize Results and Outcomes.

You can also purchase the Negotiating Personality Type and Corresponding Negotiating Style Self-Assessment Questionnaire and Interpretation Results and my NEW Digital MP3 “Greatest Hits” Verbal Negotiating Phrases, Scripts, Questions, and Questioning Techniques.  These helpful tools are in digital format and can be easily downloaded.

I provide a discounted Master Negotiator Bundle with all my Digital Learning Products.

» Online Sales Negotiation Course: If you’re in sales, sales management or a cross-functional role that supports sales, you can benefit from enrolling in my NEW self-paced Negotiating for Sales Success online course.

» Meet Negotiating Coach® Michael E. Sloopka

No part of this copyright material can be used without written permission from Selling Solutions Inc.

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Is Splitting the Difference a Winning Negotiation Strategy or a Flawed Approach?

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Is Splitting the Difference a Winning Negotiation Strategy or a Flawed Approach?

Unpacking the Pros and Cons of Splitting the Difference in Negotiations

Negotiation is a dynamic art that requires a deep and thorough understanding of negotiating strategies, tactics, techniques, and tips and the ability to adapt to various situations. One common and often misunderstood and misapplied strategy in negotiation is “splitting the difference.”

This is especially true in commercial negotiations involving monetary and non-monetary concessions that provide value.

While “splitting the difference” may seem straightforward and fair, there are pros and cons to consider when deciding whether to employ this strategy in your negotiations.  In our negotiating skills training programs and negotiation coaching sessions, we encourage “splitting the difference” when the circumstances support using this negotiating gambit (chess parlance meaning manoeuvre for advantage.)

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The Pros of Splitting the Difference:

  1. Quick Resolution: Splitting the difference can expedite the negotiation process, making it an attractive option when time is of the essence.  It’s a simple way to find a middle ground and move forward.
  2. Fairness: This method can create a perception of fairness in the negotiation.  Parties may feel both sides are making equal concessions, promoting goodwill and cooperation.
  3. Maintaining Relationships: When dealing with long-term “partners” or maintaining professional relationships, splitting the difference can prevent hard feelings and keep lines of communication open.
  4. Simplicity: When appropriately taught and understood in the proper context, splitting the difference is easy to understand and execute, making it accessible for experienced and novice negotiators.  When splitting the difference, people must learn and use correct verbal and written phrases and scripts – or using this negotiation gambit could backfire.

The Cons of Splitting the Difference:

  1. Missed Value: Splitting the difference might mean leaving value on the table.  It must consider each party’s specific needs and priorities, potentially resulting in a suboptimal outcome.
  2. Lack of Creativity: This strategy can stifle creative problem-solving.  Instead of exploring innovative solutions, negotiators settle for the middle ground.
  3. Ineffective in Complex Negotiations: In intricate or high-stakes negotiations, splitting the difference often needs to be revised.  It needs to have the sophistication required for complicated deals.
  4. Presumption of Equal Concessions: While it may seem fair, in some cases, one side may be making a more significant concession, creating an imbalance.

How Splitting The Difference Can Be Used to Your Advantage

The Negotiating Gambit: It’s generally a good strategy in a negotiation not to offer to split the difference.  There are some situations during a negotiation where it’s an excellent strategy to get the other side to split the difference.

The use of this negotiation strategy depends on where you are in your negotiating range during the negotiation.  Your negotiating range is between your opening negotiating position (initially, ask for more than you want and expect to get – based on the Maximum Plausible Position – MPP) and your desired outcome (your goal).

Suppose you are on the high side of your desired outcome (goal), between your desired outcome and opening negotiating position.  In that case, you can suggest to the other side to split the difference, which would result in your successfully being able to bracket between your high position on your negotiating range.  It creates the perception that you made a concession, and what you did was simply bracket to achieve a better outcome.

Example: In a sales negotiation, you proposed a price for a new piece of equipment to a customer at $31,997.95, plus taxes and shipping.  The price you proposed is based on your opening negotiating position.  Your desired outcome (goal) for the negotiation is to sell the equipment at $26,995.95, plus taxes and shipping.

The customer doesn’t have the budget for your proposed asking price and suggests a price of $25,000.00.  Based on this, you’re $6,997.95 lower than your opening negotiating position and $1,995.95 lower than your desired outcome.  Now, it’s an intelligent strategy to suggest to the other side to split the difference.

You could say something like this to the customer: “We’re not that far apart, so does it make sense to split the difference?  We’ll each compromise $3,498.55 and agree on the purchase price of $28,499.40, plus taxes and shipping.”

By suggesting to the other side to split the difference and by properly bracketing between your opening negotiating position and your desired outcome, you have effectively indicated that the equipment be sold for $1,503.45 more than your desired outcome (your goal).  You’ve created a Win-Win outcome by conceding some of your negotiating range to the customer.

The Negotiating Countergambit: You can protect yourself from splitting the difference yourself in a negotiation by using the Higher Authority gambit.

You can say the following to a customer: “We’re only a few thousand dollars apart on a piece of equipment that will improve your operations.  It seems a shame to walk away from this after the time we’ve both invested.  If you propose a reasonable compromise between our initial competitive price proposal and your counteroffer, I’ll take it to my finance people and see what I can do.”

Why a Former FBI Hostage Negotiator’s Approach Differs:

A former FBI hostage negotiator advocates for an alternative approach in his co-authored book, “Never Split the Difference.”  In the book, the co-author proposes that splitting the difference only sometimes serves a person’s best interests.  The co-author emphasizes using “tactical empathy, active listening, and calibrated questions” to uncover your counterpart’s true motivations and priorities.

In contrast to splitting the difference, the co-author encourages people to seek out “black swans” –unexpected and valuable concessions that might result in a more favourable deal.

At negotiatingcoach.com, we call this “Broadening the Scope” of the negotiation.  It’s important to understand when and how to properly split the difference in a negotiation.

Conclusion

While splitting the difference can be a quick and straightforward way to resolve negotiations and maintain relationships, it may not always be the most effective strategy.  Understanding the pros and cons of this approach is essential for any negotiator. There are alternative perspectives on this topic that challenge the status quo.

In your next negotiation, consider the specific circumstances and your counterpart’s motivations before deciding to split the difference – or aim for something more.  Remember, successful negotiation requires a versatile toolkit of strategies and tactics, and the right one depends on the situation.

Take Action and Invest in Our Expert Negotiating Training and Negotiation Coaching Packages, Negotiation Tools, and Online Course to Become a Better Negotiator.

» Negotiating Skills Training: Book a tailored in-house presentation, seminar or learning workshop for your organization.

Speaking Engagements – Industry Associations and Companies: Book a tailored, engaging, and impactful 60-minute to two-hour presentation at an upcoming meeting, conference or convention.

» Negotiating Coaching Packages: If your company is facing a challenging high-value negotiation and you need an expert to help you or your team – or you own a small business – or you’re an individual who needs practical negotiation advice, you can benefit from my investing in one of my three proven, results-producing negotiation coaching packages for individuals, small business owners or corporations.

» Digital Negotiation Learning Products: You can purchase my three E-books containing powerful strategies and tips.  E-books: Forensic Blueprinting Questions For Effectively Selling and Negotiating Price or Fee Increases and Managing the Price-driven Sale, Selling and Negotiating Price or Fee Increases in Any Economic Environment, and Strategies and Tips on How to Effectively Manage the RFP/RFQ/RFI or Bid/Tender Process to Optimize Results and Outcomes.

You can also purchase the Negotiating Personality Type and Corresponding Negotiating Style Self-Assessment Questionnaire and Interpretation Results and my NEW Digital MP3 “Greatest Hits” Verbal Negotiating Phrases, Scripts, Questions, and Questioning Techniques.  These helpful tools are in digital format and can be easily downloaded.

I provide a discounted Master Negotiator Bundle with all my Digital Learning Products.

» Online Sales Negotiation Course: If you’re in sales, sales management or a cross-functional role that supports sales, you can benefit from enrolling in my NEW self-paced Negotiating for Sales Success online course.

» Meet Negotiating Coach® Michael E. Sloopka

No part of this copyright material can be used without written permission from Selling Solutions Inc.