Negotiation strategy planning material. Negotiations include preparing a strategic plan before the start of negotiations and taking good tactical decisions during the negotiation session. The Negotiation Strategy is a commitment to a comprehensive negotiation approach that has a high chance of achieving the goals of the negotiators.
For example, some negotiators use a “hard” strategy against their opponent, while others use a “soft” strategy and get a better result.
1. Bargaining tactics in negotiations
Negotiators use a variety of tactics during negotiations. Negotiation tactics can be defined as various maneuvers made at certain points in the negotiation process. Threats, snapping, last-chance bidding, hard early bidding, and other tactics occur in negotiations.
Fisher and Ury have offered tactical advice consistent with a principled negotiating strategy. The first part of his tactical advice stated what to do if the other side was stronger.
The best tactic is to find out the other party’s BATNA (Best Alternative to a Negotiated Agreement). By identifying one’s alternatives, if a settlement is not reached, the company establishes a standard by which each offering can be measured.
This tactic protects the company from being pressured by stronger opponents into accepting unfavorable terms.
Other negotiation tactics are responses to opponents’ tactics aimed at deceiving, undermining, or influencing negotiations for their benefit.
What tactics should be used if the other side is using threats, take-or-leave tactics, or driving the other side into a corner? A negotiator has to recognize the tactic, state the issue clearly, and question the legitimacy of the tactic and the intention to negotiate it.
If negotiations fail, the company must use a BATNA and stop negotiations until the other side stops using the tactic. Overcoming tactics like this with the principle of defending is more productive than countering with trick tactics.
2. The principle of personal selling and negotiation
As explained above is transaction oriented because it aims to help the salesperson close a sale with a customer. But in many cases, companies are not just looking for sales but also acquiring and servicing large customer accounts.
The company wants to demonstrate to the account that it can very well serve the account’s needs, especially if both parties can form a committed relationship.
The type of sale to create a long-term cooperative relationship is more complicated than previously described. Neil Rackham has developed a method he calls SPIN (Situation/Problem/Implication/Result or Situation/Problem/Implication/Need-Payoff) selling.
Companies can use SPIN sales when they are looking not just for instant sales but for long-term, mutually beneficial relationships. A long-term commitment to work together requires developing agreement rules as well.
According to Rackham, the sales process begins with an initial introduction to investigate the prospect’s problems and needs, demonstrates supplier capabilities, and finally obtains long-term commitment.
3. Relationship marketing
More and more companies are now shifting their emphasis from transaction marketing to relationship marketing. The days when lone salespeople worked their turf and were guided only by sales quotas and reward plans are almost gone.
Today’s customers are large and often global. They select suppliers who can sell and deliver coordinated sets of products and services to multiple locations, who can quickly solve problems that arise in the various locations, and who can work closely with customer teams to improve products and production processes.
Unfortunately, most companies cannot fulfill these requirements. Their products are sold by separate salespeople, who are difficult to work with. The company’s technical employees may not be willing to take the time to educate customers.
The company sees that sales group cooperation will increasingly be the key to winning and retaining accounts. But they saw that asking their employees to cooperate was not working.
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They need to design a reward system that rewards work for joint accounts. They have to come up with better measures and goals for their sales force. And they should emphasize the importance of teamwork in training programs, while also respecting individual initiative.
