1. Developing a Sales Negotiation Strategy

2. Objectives Identify the fundamentals of an exchange in negotiation
Complete a cost – value matrix for an upcoming negotiation
Create a negotiation strategy
Implement basic principles of negotiation
Identify Negotiation tactics that your counterpart may use

3. Negotiation Model Know your customer
Discovery
Know your customer
Assess/develop “tension for change”
Preparation
Conduct a Cost – Value Assessment
Develop your bargaining strategy
Negotiation
Negotiate!
Watch for tactics

4. What is a Negotiation?
Negotiation is defined as a process where attempts are made to reach a mutually beneficial agreement through discussion using collaboration or compromise.
It is a:
Process: that indicates that negotiation is not a one-time effort at reaching a solution. It requires commitment form both parties (tension for change).
Mutually beneficial: agreement that has benefits for both parties (Win-Win).
Discussion: two way dialogue.
Collaboration: (or compromise) is the most effective method of reaching agreement. A way of eliminating conflict and overcoming doubt of proposal.

5. Determining Approach
In negotiation, there are two questions that you must ask yourself to determine your approach:
How important is the relationship?
How important is the content you are negotiating?
Once you have answered these questions, you can decide on one of five approaches….

6. 5 Possible Outcomes/Approaches
Accommodating: focuses on getting agreement by putting aside your own needs and going along with what your counterpart.
Compromising: also known as bargaining. Each party finds middle ground with each party getting some, but not all of their results.
Forcing/Competing: uses power to overwhelm or dominate the other person. Can produce short term results but damage relationships
Win-Win (collaborating: looks for opportunities for both parties to achieve their desired results. Most acceptable and preferred approach.
Avoiding: used when one party knows that their proposal will not be accepted. Used to buy more time

7. Steps to a Win-Win Strategy
Success in negotiating is often an emotional success.
When discussing Win-Win, you are identifying the feeling of both parties feeling like the will benefit or have “won”.
Who is your customer? What are they trying to achieve?
What is important to them?
Understand the Cost-Value Matrix: what do you have to offer that is of value to them, how much will it cost you?
What is your bargaining strategy? Aim high, what are you looking for ideally, what is your walk away point?

8. Step 1: Know Your Customer
If you do not know enough about your customer, it becomes a hostage taking and not a negotiation....
To achieve a Win-Win situation, you must leverage your selling skills to understand what your customer values, what they are trying to achieve, and what constitutes a win for them.
You can achieve this by asking good questions and listening to uncover your customers:
Goals: what are they trying to achieve personnaly and professionally?
Objectives: what are their short and long term objectives?
Strategies: how do they plan to achieve their objectives?
Plans: what are the action plans or tactics they will use day-to-day?

9. 2. What is important to your customer?
Things to consider: is it valued, how can I deliver?

10. 3. Cost – Value Matrix
Complete a Cost-Value matrix from your Point of View, and your customer’s POV..
High Value/High Cost
High Value/Low Cost
Ensure you receive equal trade for these!
These are your aces!!!
Low Value/High Cost
Low Value/Low Cost
Stay away from these. If your customer does not see the value, then there is no sense in offering!
These items create good will.

11. 4. Bargaining Strategy
Develop your bargaining strategy considering the following points.
Create a your shopping list and customer’s shopping list before formalizing your strategy.
You
Your Customer
AIM HIGH! What do you want?
What would you be very happy with?
What will you settle for?
What is your walk-away point?
What does “aiming high” look like for your customer?
What would your customer be happy with?
What will your customer settle for?
What do think is your customers walk-away point?

12. Essential (must achieve) Desirable (like to achieve)
4. Your Shopping List
Item
Essential (must achieve)
Desirable (like to achieve)
Possible ( a bonus)
Distribution
Budweiser bottle listing
Budweiser draught and Stella Artois draught listing
Alexander
Keith’s draught listing
Visibility
Feature Grow Aggressive brands in 1 hotspot
Feature Grow Aggressive brands in 2 hotspots
Feature Grow Aggressive brands in 3 hotspots
Quality
Branded glassware for Stella Artois
Branded glassware for Budweiser and Stella Artois
Branded glassware for all Labatt brands.

13. 4. Your Customer’s Shopping List
What is on your customer’s shopping list?
Profit
Draught equipment
Training / Incentives
Discount
Promotional merchandise
Promotional activities
Remember to consider which items are Essential, Desirable or Possible

14. 4. Bargaining Strategy Worksheet
Utilize the following template to identify your strategy.
Identify value to customer.
Ie. Promotions that will drive traffic to establishment.
Anticipate the “cost” to the customer by agreeing to the
Ie. Will the customer lose business if they delist a certain product?

15. Basic Principles of Negotiation
Now that you have developed your strategy, you are ready to begin negotiations with the customer.
Basic principles to consider before negotiating:
Be careful of demands or ultimatums: these make others defensive.
Leverage your personal power base.
Know what your trade offs will be: remember the feeling of winning, your customer will feel like they won if you trade low value items.
Reveal only what is necessary to your negotiation partner: sometimes less is better.
Consider the ripple effect of the process: protect your on-going relationship.

16. Principles of Negotiation cont’d
Basic principles to consider during negotiations:
Ask for time to think things over so you can thoroughly consider the dangers of accepting, or the opportunities that additional demands might bring.
Defer a decision based on review with your manager, committee or board of directors.
Ask for more time to let legal or technical experts review the proposal.
Ask for more concessions.
Use Good Guy/Bad Guy technique with your manager to add pressure on the other side without confrontation.
Take time to check notes about the negotiation, review frequently.
Concentrate on the Issues Power Negotiators know that they should always focus on the issues and not be distracted by the actions of the other negotiators. Have you ever looked at tennis on television and seen a highly emotional star like John McEnroe jumping up and down at the other end of the court? You wonder to yourself, "How on Earth can anybody play tennis against somebody like that? It's such a game of concentration, it doesn't seem fair."

17. Principles of Negotiation Summary
The negotiators who let their egos rule let several things work against them in a negotiation.
Stay positive to keep the momentum
Consider and identify Negotiation tactics from your counterpart.

18. Negotiation Tactics to Watch Out For…
Consider these key negotiation tactics that your negotiation partner may implement:
Power-play
Straw-men
Cherry picking
Intimidation
Others

19. Power Play
Your counterpart may try to create the illusion that you are in the Power position in the negotiation.
Power Play tactics include:
Getting you to Commit First
Your first offer might be much better than they hoped.
Gives counterpart more information than you may want to give.
Acting Dumb, Not Smart
May act less intelligent; people tend to help people less intelligent than them
May ask for help ie. “I don’t know, what do you think?”
Congratulate you on your progress
In the spirit of making you thought you have won.

20. Straw Man
Your counterpart may try create focus items that are not important to them in the negotiation to gain information or distract from their key issues.
“Straw-Man” tactics include:
A simple “draft” proposal intended to generate discussion of its disadvantages and to provoke the generation of new and better proposals.
Used to gain insights and information on your counterpart
Demand agreement on Issue 1, which you care about most. Counterpart then creates deadlock and then “reluctantly” concede Issue 1 (the “Straw Man”) allowing them gain agreement on Issue 2 (the one they care about most) – and maybe Issues 3 and 4 as well.

21. Cherry Picking
Your counterpart may omit certain information of facts to favour their position in the negotiation:
Cherry Picking Tactics include:
Involves suppressing evidence, or the fallacy of incomplete evidence to confirm a particular position,
Includes ignoring a significant portion of related cases or data that may contradict that position.
It is a tactic of selective attention, the most common example of which is the confirmation bias (favouring the information that supports your own beliefs or objectives).
Cherry picking may be committed unintentionally

22. Intimidation
Your counterpart may use intimidation tactics to gain power in the negotiation:
Intimidation tactics include:
Legal: threat of a lawsuit or other legal action.
Raising the stakes: putting more on the line raises tension.
Using threats: creates hostility and tension to get deal done.
Status: people are apprehensive about negotiating with those who are more powerful, educated or wealthier.
Hostages: collateral that can be traded for something else.
Environmental/Physical: bad conditions such as lack of air conditioning (or heating), uncomfortable seating arrangements.
Emotional: use of embarrassment: yell or create a scene, making others uncomfortable.

23. Other Tactics to Look Out For…
Alternatives to Settlement
Emphasize you have better choices than settlement. The side that cares more about settling is weaker. If you have the better BATNA (Best Alternative to a Negotiated Agreement), you have more “chips.” Make that clear to your adversary.
“Anything But That”
Claim your adversary’s offer is not enough, even when it is.
Bluffing
A standard “bluff” is “take it or leave it.” Meet this bluff (and most others) by calling it. You won’t know your adversary’s limit unless you push for it.
Creating Deadlock
Create deadlock to force your adversary into concessions to move the negotiations along

24. Other Tactics to Look Out For…
Diversion/Distraction
If you feel you are losing an important issue, shift the discussions to a different issue before you concede 
Done Deal
Take some unilateral action and present it to other side as a “done deal
Irrational Behavior
Sometimes act irrationally, not only to distract and unnerve, but also to undermine your adversary’s confidence
Limited Authority
Claim to lack authority to settle at some amount and ask your adversary to reduce the offer to your authority limits.
Limited Time
Constrain the time limits of the negotiation.

25. Other Tactics to Look Out For…
Silence
Silence can impel your adversary to give you more information or concede more than he intended.
Turnabout
After you have conceded an issue or otherwise acted defensively, “gain space” by coming out strong on the next issue.
Use of Power
Threaten to use your power and sometimes actually use it.
The Accommodation Strategy
An Accommodating party will sublimate its concerns to satisfy the other party’s, at least for the present.

26. Summary
Attitudes, positions and skills can create invisible boundaries that constrain “the possible”.
Identify your needs versus wants and practice your skills to break these boundaries.
Win-win deals are more likely when set up correctly through effective use of:
Understanding the Cost-Value Matrix
Planning your bargaining strategy
Building relationships at the right levels.
If a win-win approach is appropriate, it's optimal to pursue a win-win agreement for both parties.
This works when you are able to articulate features to benefits for your customers.

27. Objectives You should now be able to:
Identify the fundamentals of an exchange in negotiation
Complete a cost – value matrix for an upcoming negotiation
Create a negotiation strategy
Implement basic principles of negotiation
Identify Negotiation tactics that your counterpart may use

28. It is your turn to “Shoot The Puck!!!”
Development is owned by Employees,
Supported by Managers,
And enabled by the People Department.
How are you going to apply what you learned today in trade?
Strive for Win-Win outcomes in all of your Negotiations.
Use the Cost-Value Matrix for your next Negotiation.
Ensure that you prepare your strategy and be attentive to counterpart tactics.