negotiation ibs 2013

7/30/2019 Negotiation IBS 2013

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Negotiation

Few tips


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Negotiation ?

Negotiation is conferring with another person or

group to arrive at a settlement of some conflict.

Is useful for resolving conflicts when the two sides

*share an important goal

*have some differences*are in a position to trade things/ issues

they value with one another


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Important while negotiating.

Prepare thoroughly for the negotiation Never enter negotiation when tired, hungry or angry

Define your own goals, your opponents goals and theconflict

Anticipate alternative scenarios and prepare for tactics

Find alternatives

Open by stating the goals you share

Define your BATNA(Best Alternative to Negotiated

Agreement)


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Your BATNA "is the standard which can protect you

both from accepting terms that are too unfavorable and fromrejecting terms it would be in your interest to accept.

In the simplest terms, if the proposed agreement is better thanyour BATNA, then you should accept it. If the agreement is

not better than your BATNA, then you should reopen

negotiations.


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Never give something for nothing; Trade what is

cheap to you, but valuable to other side.

If you are going to attack, attack hard and without

warning

State your position clearly and repeatedly

Clarify positions. Repeat what they said and ask

questions

Do not make concessions early

Avoid irritating the other side or making themangry


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Sales

personCustomer

FI NANCIAL GAIN


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Can be in terms like

Winning an order to supply customers

Scheduling the delivery of products

in-time

Agreeing on the quantity and the price


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Core skills required for negotiation

Ability to define range of objectives

Ability to explore wide range of options

Ability to prepare well

Ability to prioritise clearly

Interactive competencebeing able tolisten and question other parties


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Creating the right atmosphere

Deciding on Location

Using Seating arrangement tactically


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Conducting the Negotiation

Judging the Mood

Begin any negotiation

with uncontroversial,

general view-points

SADNESS

SUSPECT


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Reading Non-verbal signals

Facial expressionsbody languageeyemovementsraised eyebrows

Listen to a persons tone of voice as well ashis words


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Responding

to

Ploys


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If you are foiled by a successful ploy, thinkbefore you respond

## When customer bluffs about a reduced

price quotation of competitor, Just dont

respond with emotion

Ignoring a ploy will neutralise hisintention


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OfferingInsults

Questioning the performance of thecompany; sales personnel

Counter:

Stay calm; do not loose temper or offerinsults in return; Restate your position

firmly that you will break off negotiations

unless he is constructive Personal attacks should be deflected with humour,

rather than anger


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Bluffing

Making dubious assertions, such as thatcompetitors are giving the same product atvery less price

Counter: Refuse to agree to the other partys terms,

and wait for the reaction.

Question all statements and ask forevidence to support those of his claims thatappear dubious


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Using indirect pressure

Keeping you waiting;

making you sit in uncomfortable place;

receiving phone calls or visitors Counter:

Recognise that these are ploys to make you

feel less confident. Do not drop youroriginal terms unless your objectives are

met.


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Using Leading questions

Asking you a series of questions, whichlead you to declare a weakness in yournegotiating position

Counter: Avoid answering questions when you do

not understand the intention behind them.

Handle Questions one by one & check theclaims he made, try to show his irrelevancein questions.


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Making Emotional Appeals Stressing their sacrifices; claiming to be

offended by your lack of trust

Counter:

Affirm your commitment to fair settlements

in the past.

Ask questions to test the validity of claims,

but lead the conversation back to discuss the

issues


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Fed Ex case

Differences in

Profitability

Compensation

Sales person characteristics


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Ground - Profitability - 11% ; yield is $5.55

Express - Profitability - less ; yield is $16.16 (Ex#1)(no complete datahigh fixed costs)


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Ground & ExpressFixed/Variable 82/18 70/30

Yield YES No

Activity Tgts YES No

Team Component YES No

Adjustments-ECONOMY No YES

Min Ach for inctv 50% 75%


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Aggressive Professional

Relationship driven Problem solver

High pressure Low pressure

Not aided by Brand Aided by Brand

Ground Express


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Organisation structure; Geographic salesterritory design; Customer segmentation;

Customer retention; call frequencies

Performance Tgts, Compensation, Career

development, Recruitment


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Coordination of marketing / sales

Trainingskill


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The Desired Sales Process

What should newly integrated sales forcedo?

Three levers that drive the sales process


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COMPENSATION

SALES STURCUTRE

SKILLS

SALESPROCESS

SALESOUTCOME


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COMPENSATION

Does Money motivate Sales people ?

On what factors should compensation beplanned ?

- complexity of job

- Industry bench mark

- ..


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Depends on Cos Sales Approach + Sales persons Individual

competency or role.

Role of the salesperson:

Nature of the product or service

price competition (weak or extensive).

Customer loyalty

expertise required.

sales objectives (strategic objectives or pure volume).

Type of selling required (consultative/ complex or transactional).


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Straight Salary

Straight Commission

CombinationSal + Comm-bonuses

- Incentives

- Performance linked pay- Team performance pay

- Fringe Benefits(Holidays, loans, Esops, Els)


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Which compensation structure is good ?

For.

Industrial selling

Banking

Fmcg goods

Pharma selling

Durables

Telecom

Insurance

B2B sales (excluding dealers)


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Incentive % & its message


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Each stakeholder, e.g., top sales executive, field sales managers, marketing

staff, and HR/compensation staff, could profile the sales job in reference to

the factors listed in the above chart.

53 70: High salary/low incentive; complex, long-term selling process;

unique product or service; team focus; high level customer relationships

31 52: Median salary/incentive ratio; evolving jobs and processes; diverseproducts or services; both individual and team contributions

14 30: High incentive/low salary; transactional sales; short selling cycle;

commodity products; sales person controls the sales process

Source: 2002 Colletti-Fiss, LLC (www.collettifiss.com)

negotiation ibs 2013

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