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a loaf. Compromise may satisfy both parties, but only to a limited extent. Of course, half a loaf in a
highly competitive arena may be viewed as better than none but if it becomes normal practice the
results may be less than desirable for both sides.
A more effective approach, one that fosters long-term relationships, is creative negotiation. Creative
negotiation is defined as: "Both parties seek to resolve their differences by working synergistically to
create a higher quality, value-added solution. Both parties acknowledge the need to reach agreement,
working amicably and creatively toward a solution that satisfies each." [1]
Achievers International. Creative Negotiations Workshop. 1989.
[1]
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Five Principles of Creative Negotiation
Dealing with conflict and differences is rarely an easy task. Barriers to creative negotiation can be
numerous and are often the saboteurs of a potential sale. Remember: your goal is to reach
win-win-win-win settlements with qualified customers. To that end, I offer these five principles of creative
sales negotiation:
Principle #1: Attitude First
Are you a good negotiator? Your answer reflects your level of confidence in your negotiation skills.
Creating a positive mindset involves basic attitudinal characteristics, which become the building blocks
for successful negotiation. As discussed in Chapter 2, attitudes and skills must work in harmony.
Attitudinal characteristics of negotiation include self-awareness, self-belief, and an openness to other
viewpoints. Salespeople frequently overlook the importance of preparing themselves mentally. Attitude”
how we deal with others when negotiating”drives the relationship. Develop a win-win-win-win attitude
toward negotiation, and don't be satisfied until all parties are pleased with the solution.
Principle #2: Planning and Preparation
You may be thinking, "Dèjá vu”didn't we already discuss this?" Yes, we did, in Chapter 3. We need to
talk about it again. For many of us, planning is boring and tedious, easily put off in favor of leaping into
action quickly. However, devoting insufficient time to planning frequently results in failure to negotiate a
mutually beneficial agreement, and raises feelings of hostility and frustration.

The cornerstone to effective, creative negotiation is a carefully designed blueprint outlining specifically
desired results for both you and your customer. The first step is to clearly articulate your position”know
what your objectives are. Know the issues that are not negotiable and the issues that are negotiable. I
refer to them as your "must-have" and "nice-to-have" issues. Must-have issues are predetermined prior
to negotiation and are essential to a satisfactory agreement. They are simply not negotiable. Your
nice-to-have issues are negotiable. Although they would be nice to have, they are not essential to the
agreement. They are issues you are prepared to concede or use as trade-offs in the interest of
concluding the agreement or maintaining the relationship.

Your window of flexibility is guided by your predetermined min-max points”min being your lowest
acceptable point and max being your best, most ideal position. So, in the interests of creative
negotiation, each of your must-have issues should be accompanied by a window of flexibility”your
min-max points. Let's look at the example below.




As a sales entrepreneur, your must-have issue is making a profit. To do this, you are guided by the
flexibility of your predetermined min-max points. As in Figure 10.1, the ideal situation is a max-point of
$150 whereas your min-point is $100. Any price lower than your min-point is unacceptable”you may
have to entertain other avenues, such as concessions or tradeoffs, to secure the deal. The wider the
spread between your min-max points, the more flexibility you have to negotiate. Otherwise, you may
become too rigid and inflexible, deadlocking the negotiation. In terms of your nice-to-have issues, I
suggest there are no min-max points. These issues are subject to negotiation and may be used as
concessions to advance the deal. The key to creative negotiation is knowing your parameters prior to
negotiation. Whenever possible, plan your strategy beforehand. It's tough to negotiate creatively if you
don't know the parameters of your destination. In creative negotiation, those who ask for more typically
get more ... and those with low targets typically underachieve.

Also, consider whether negotiation is appropriate at all. It may be a C account or a C opportunity. In
some sales situations negotiation can take place spontaneously, so be aware of the status of the
opportunity: A, B, or C. You may have to respond on the fly so be sure to have the complete account
file with you at the call for quick reference to previous discussions.

The second step in negotiation planning is to define the issues worthy of negotiation. Refer to all your
notes and assemble all the issues, yours and your customer's, into a comprehensive list. Some issues
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may have been resolved prior to the negotiation, which is fine, but be sure to identify any outstanding
issues. It can be frustrating and costly”in terms of time and success”if the customer calls you just
prior to inking the deal with an unresolved issue. After the issues are assembled, the next step is to
prioritize them. By sharing the list with your customer, you continue to build trust and confidence as
you work through it together. Extract relevant information from your notes to enhance your position. A
comment in your notes from six months ago may be a valuable piece of information. Salespeople often
compensate for inadequate planning by conceding more than necessary. This shortcut can be very
costly.

Sales entrepreneurs cannot afford to be quick and clever during the give and take of negotiation.
Planning increases your negotiation success substantially and helps you achieve solutions that you
never thought possible. Invest the time and energy (during janitorial hours) to prepare a strategy in line
with your customer's behavioral style. Your strategy will help you relax, face fewer unknowns, and
reduce stress.
Principle #3: Know the Lingo

The negotiation arena has a language of its own. I have seen many negotiation sessions fail simply due
to not understanding the language of negotiation. My objective here is not to provide you with an
in-depth study of all the nuances of negotiation but to create a mindset, an awareness, and an overview
of the logistics of creative sales negotiation. I suggest you augment your negotiation skills and
confidence by considering other publications on the subject. Consider this chapter as your springboard
to further study.
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Language of Negotiation
The following terms should become part of every sales entrepreneur's vocabulary.
1. Concessions. Giving in to a customer's request without asking for anything in return.
Concessions are central to creative negotiation. They are the backbone to a mutually
accepted outcome as they acknowledge the other party and communicate sensitivity to
his or her issues and demands. Initial concessions can be effective”they communicate
that you are willing and that your intentions are honorable. Many authors suggest that
negotiation involves a "progression of concessions."
Once again, your min-max points must be clearly defined prior to giving concessions. Know
your parameters and don't give away the farm. Begin the negotiation by offering small
concessions. Concede the items or issues to which you attach little importance. The sooner
you demonstrate your willingness to negotiate, the sooner the customer will respond in kind.
Don't give away big concessions too early. Use them to respond to a customer's concession
or to secure the deal: "Can we confirm the deal, if I give you XX?" However, you need to draw
the line when your min-point is being compromised.
2. Trade-Offs. Give customers what they want in return for something of comparable
value. Value is perception. The item may not be equal in monetary terms, but it may be
equal in perceived value. As you've heard before, "One man's garbage is another man's
treasure." Once again, know your must-have issues and your min-max points before
determining what you are willing to trade.
The power of trade-offs is enormous and can have a tremendous impact on your productivity.
By asking for a trade-off you elevate the value of your concession. It also stops the grinding
process. Marry your concession to a trade-off, otherwise your customer will continue to
make demands. You might as well say, "Sure, here you go, it's yours for the asking." A
confident negotiator exercises give (concessions) and take (trade-offs) throughout the
negotiation process, moving the dialogue toward a win-win-win-win solution. However, the
rule of thumb is to stay flexible”there is always a way.
3. Walk-Point. The point where you walk away from the deal because your minimum
must-have issues are not being met. If through trade-offs and concessions you are
unable to reach an agreement that satisfies your predetermined parameters, your only
option may be to walk. However, walking may only be a temporary solution. Both
parties may be receptive to a recess, a cooling-off period. In the interest of an
agreement, you may both agree to revisit your parameters and get together again
tomorrow, next week, or next month. Although both parties may privately wish there
were some way to get back together, they usually don't know how to arrange a
reconciliation. Open and honest communication, coupled with an attitude of
win-win-win-win, is your key to avoiding an impass.
4. Impass/Deadlock. Where communication no longer moves the agreement forward and
conversation seems to go in circles. There is nothing wrong with deadlock”either party
has the right to prefer no deal to one that falls short of their min-point. How do we break
an impass? Change the negotiators, change the parameters, call a third party to
mediate, change the shape of money (larger deposit, different terms, cash versus
credit), or consider changing venues. These tactics can help create a climate in which
new alternatives can be developed. There is always a way.
5. Agree to Disagree. Both parties may agree to disagree rather than reaching an
agreement that compromises both parties, leaving each resentful and disappointed. If
your agreement is undermined you may lack the commitment necessary to carry it out.
Once again, this could be a temporary situation. Negotiation might be better served two
or three months down the road. This tactic can be effective in personal relationships as
well. It can even work with your spouse!
6. Confessions. Not only are confessions good for the soul, but they can be a good tactic
for negotiators. Confessing” telling all you know, revealing your motives and needs”
can be a good way to gain empathy. People tend to be more charitable to someone
who tells all. You also demonstrate honesty and a sincere desire to do business.
However, no need to share your personal net worth or your most recent sexual fantasy.
Principle #4: Negotiate Price, Don't Sell It
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Is price the most important aspect of the sale? No. Never has been, never will be. Customers have never
based their buying decisions solely on price and I doubt they ever will. However, salespeople convince
themselves that price is the number one motivator to purchase. Studies show that salespeople bring up
price before the customer does 60% of the time. Why? I'm not sure but I suppose salespeople feel
obligated to bring it up, or perhaps they have been trained to do so. It could even be lack of confidence
or corporate self-esteem.

Many salespeople violate the sales process by introducing price too soon. Ideally, price should not be
discussed until after your initial confirmation. During the call you need to focus on selling value and
benefits to the customer. Don't mention price unless the customer asks or you are negotiating. I realize
this concept may seem somewhat manipulative and irresponsible, but it isn't. I have confirmed several
deals without the customer or me mentioning price. I think it's part of the rapport and trust issue I spoke
of earlier. If a customer trusts you and feels comfortable with you, price is not an important issue. There
is an implied understanding that your price will be competitive, otherwise you wouldn't be in business.
By shifting the conversation to price prior to initial confirmation, the salesperson has invited the
customer to openly challenge the price. Some salespeople are convinced the customer's mandate is to
hammer the salesperson into submission, finally succumbing to a rock-bottom price. Classic tactic of a
C account. How to negotiate against price and discount pressure is a common challenge among sales
professionals. You've probably heard it before, "Your price is too high. You'll just have to do better," or
"It's a competitive market. Your competitors can beat that price," or "You'll have to show more flexibility
on your discounting," and so it goes. When salespeople concede too quickly in these situations they
not only reduce profitability, but also devalue their customers' perceptions of the product or service.
Don't respond by asking, "What's the price they're offering you?" or "What price do I have to beat?" This
is a common mistake because it shifts the focus to pure price and discount levels. Experienced
negotiators shift the focus to value comparisons versus price comparisons.

When dealing with the price issue, be guided by knowing your min-max points. If you have price or
discount flexibility, do not give it all away at once. Instead, concede slowly and reluctantly. Also,
consider trading price concessions for major commitments. It could sound like this: "If I give you X
price, will you give me net 10-day terms (or COD terms)?" If the customer is insistent on a discounted
price don't hesitate to ask for something from them that makes the deal a win-win-win-win.
Acknowledge the customer's curiosity about price, but don't get sucked into a price debate prior to
initial confirmation. For example, when you ask for their business using the five magic words in Chapter
9, your customers may inquire about your price. Simply say, "Yes, I'm sure we both recognize that
price is important, but at this point can we agree to do business together based on the benefits
discussed, as long as I can give you a competitive price?" If the customer says yes to your initial
confirmation, you now have a willing party with whom to negotiate. Consider the initial confirmation as a
conditional sale; conditional upon working out terms and conditions supported by a competitive price.
What salespeople need to realize is that if a fair price cannot be worked out then there is no deal. Final
confirmation is conditional upon successful negotiation. However, don't negotiate all aspects of the deal
and then focus separately on price. Make sure price or discount is part of the whole package, not a
separate negotiation.
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During negotiation be cognizant of your customer's behavioral style, and adapt. If you are selling to a
Director and she wants to know the price prior to initial confirmation, I would be inclined to acknowledge
the request and offer a price range. Don't be exact with your answer.
Principle #5: Negotiate the Issues, not the Personalities

Often, what causes you to become frustrated or angry in a negotiation is not the topic or issue, but your
customer's personality traits. By putting emotional distance between yourself and the negotiation you
gain a tremendous advantage. Negotiations often unleash emotions that short-circuit rational processes.
We sometimes abandon our carefully designed strategy and resort to a flight or fight response. The key
to effective, win-win negotiation is to react unemotionally.
From time to time you may find yourself dealing with an individual you do not particularly care for.
Chances are you wouldn't invite him to go camping with you, but he may represent an A account and a
sizeable business opportunity. Experienced negotiators understand that professionalism requires the
ability to distance oneself from any emotional distractions. These may include biases, perceptions,
values, fear of being exploited, egos, feelings, moods, stress, and so on. Parties can get too caught up
in the emotions of negotiation. They become too close to the deal and overlook important facts that may
help move the deal forward. In spite of all your efforts to build a personal relationship you may find
yourself dealing with just a corporate relationship. You can both still benefit by simply doing business
together and nothing else. Don't entangle relationship challenges within the negotiating process.
For most salespeople, the major barrier is simply the fear of negotiation. The very thought sends
paralyzing shivers up their spines. The toughest hurdle is learning to be confident enough to stand up to
the challenge. This means developing the ability to comfortably express a position without hurting
anyone or being hurt. Many people find the straightforward, aggressive, business dialogue of negotiation
intimidating. It's the same challenge with confirming: the fear of rejection or perhaps sounding too
aggressive. Our natural human tendencies prevail”in our adolescent years we were taught that it was
polite not to ask for things and never to be confrontational.
The best approach to dealing with the emotional aspect of negotiation is the pause button. Pushing the
pause button means putting the negotiation on hold while you take a break to reevaluate the situation.
This may be for a few minutes or an hour or after you have slept on it. Michael and Mini Donaldson offer
this explanation in their book, Negotiation for Dummies:

Knowing when and how to push the pause button not only endows you with an aura of composure and
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confidence, but also gives you control over all the critical points of the negotiation.

They go on to say:

No single skill can be as helpful to you as the pause button in any situation laden with heavy emotional
overtones. Almost by definition, you cannot fully prepare ahead of time for these situations. Your
judicious use of the pause button can compensate. Pushing the pause button produces better results...
or at least results that you feel better about.

The message is clear: don't be afraid to utilize your pause button. Use it to re-evaluate your position.
Perhaps in the interest of flexibility it can become an opportunity to reconsider your must-have issues
and your min-max points. Remember, with two willing parties, there is always a way.
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Low of 10 Options
A few years ago I had the pleasure of hearing Jim Rohn, an international motivational speaker, speak at
a sales conference in Calgary. One of his many suggestions was to be guided in life, and in sales, by
the Law of Ten Options. His point is this: with a cancellation or postponement of an event, there are
always ten other options”ten alternatives to consider. For example: if you and your spouse had
planned an evening out with the Jones but at the last minute they gracefully declined due to sickness,
you now have ten options to consider”go see a movie, see a play, visit other friends, clean the garage,
read a book and so on. All is not lost because of a sudden change in plans. The first five or six options
may present themselves quite readily, whereas the final three or four may require some creative thinking
”perhaps even some alternatives outside your comfort zone. It works well. My wife and I often discuss
our ten options and frequently come up with options that are as enjoyable or more enjoyable than the
original cancelled event.

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