A solid understanding of the phases of negotiation is invaluable for a sales professional. Many customers are eager to negotiate to secure the best deal possible. It’s important to note that negotiating and bargaining are not the same; rather, bargaining is just one stage within the broader negotiation process.
Phases of Negotiation
Negotiation consists of several stages, influenced by timing, intuition, and flexibility. Aside from bargaining, the other stages include:
- Preparation: Gathering information and setting goals before entering negotiations.
- Discussion: Engaging in open communication to understand each party’s needs and perspectives.
- Agreement: Reaching a consensus that satisfies both parties.
Understanding these phases can enhance various sales interactions, including the delivery of your sales presentation, exchanging information for services, up-selling, cross-selling, and even negotiating for a raise.
When the negotiation process flows smoothly, both parties are more likely to collaborate with trust and respect, leading to mutually beneficial agreements. In the context of telephone sales, this negotiation can occur rapidly or unfold over multiple calls, emphasizing the need for effective communication at every stage.
- Preparation
- Exchanging information
- Bargaining
- Closing
Preparation
Preparation is extremely important in negotiating. An inexperienced negotiator who is well prepared can successfully make their argument and win their case against a seasoned negotiator. In the preparation phase, negotiators need to review previous examples or other incidents that might have bearing on this situation. In this phase, parties will also decide to negotiate as a way to control their costs. When the cost of not negotiating a resolution is higher than the cost of negotiating one, negotiation can be the most desirable result.
Exchanging Information
This is not a step that many negotiators consider consciously, except perhaps in legal situations (where it is referred to as disclosure). But it plays a role even in negotiations at home and, certainly, in the workplace. Exchanging information is really an extension of preparation and allows both parties the opportunity to consider all of the available information before a bargaining conversation or meeting takes place.
Bargaining
Bargaining is often considered the core of the negotiation process. It’s the stage where interested parties review their agreements and negotiate modifications, often focusing on one term at a time. This phase can sometimes reveal underlying hostility and frustration as both sides work through the intricate details of the agreement.
Key Points of Bargaining
Maintain Composure: It’s crucial for negotiators to remain calm, professional, and relaxed during this phase. Losing your temper or engaging in aggressive arguments can derail the negotiation, making it impossible for parties to communicate effectively and hindering progress.
Agreement in Principle: Sometimes, reaching an agreement in principle can lead to prolonged discussions about finer details. This is where actual sacrifices and concessions come into play, as each party seeks to finalize the terms.
Example of Complexity: Consider divorce proceedings, where a couple may initially agree on shared custody of their children. Although the principle of equal sharing is settled, the specifics—such as how to divide time during special occasions like birthdays and holidays—can become contentious and complicated. This aspect often proves much more challenging than other negotiations, such as dividing debts or personal possessions.
In summary, effective bargaining requires patience, clear communication, and a focus on maintaining a professional demeanour to navigate the complexities of the negotiation process successfully.
Commitment and Closing
Once the parties have completed the bargaining phase, made all necessary adjustments, and reached the least uncomfortable outcome, the negotiation is ready for commitment and closure. This stage signifies that both sides are prepared to finalize the agreement.
Key Aspects of Commitment and Closure
Finalization: This is when tangible actions occur, such as writing a check as a deposit on a new car or a bargaining committee presenting a new deal to their members for a vote.
- Public Commitments: Commitments can be made public, such as through press releases or other media, to share the outcomes of the negotiation process with a broader audience.
- Resolution of Hostility: By this stage, any lingering hostility should ideally be resolved, as parties have moved past the bargaining phase. However, it’s important to be aware that some resentment may still exist beneath the surface, making it crucial to take positive steps that foster relationship-building.
- Follow-Through: One of the most critical elements at this stage is ensuring that there is a strong commitment to carry out the terms of the negotiated agreement. This follow-through is vital for maintaining trust and credibility in future interactions.
In summary, the commitment and closure phase is essential for solidifying the results of the negotiation and ensuring that all parties are aligned in their intentions to uphold the agreement.
