One of my favorite lines of all time comes from the movie Boiler Room. When Jim Young, a young, rich, and cocky senior stock broker, played by Ben Affleck tells a group of upcoming stock brokers : “And there is no such thing as a no sale call. A sale is made on every call you make. Either you sell the client some stock or he sells you a reason he can’t. Either way a sale is made, the only question is who is gonna close? You or him?”
Pretty awesome line, right? Creating a lean and healthy start up can be a daunting task. There are many challenges an entrepreneur will face while trying to break-a-way from cubical nation. I’ve trained hundreds of people on sales and marketing; from start-ups to Fortune 40 Companies, and the topic that produces the greyest hairs by far is negotiating. Let’s face it; the art of negotiating can be very intimidating. For years, I gave sales people the tools they need to levy the power of negotiating against you the consumer. Now I’m turning the tables and giving the power back to the people. These five tips will give you tools you need to dominate at your next negotiations.
- Never Take The First Offer – In many industries, people that accept the first offer are considered “suckers” for obvious reasons. Before you start your negotiations, have a plan of what would be considered a win for you. When they make you their first offer, be prepared to counter offer much lower than what you actually expect. For an example, I just finished a round of negotiations with a leading luxury hotel brand for a group trip. Before I called the group sales director, I called the hotel as a regular guest to see what was the standard rate for the same dates for a individual. The rate was 169.99 per night. So in my mind I believed a good rate for the group would be $99.99 and I would go no higher than $120.00 per night. So after doing my research, I called the group sales director and requested a quote. The price they gave me was $149.99 per night for a 20-room block. I counter offered with a price of $79.99 per night. We ultimately ended up on “compromise” of $99.99 per night. The sales man walked away thinking he made me come up $20 on my price, when actually I made him come down $49.99 from his price.
- Never Be The Decision Maker – When your haggling to get the best deal possible, it pays HUGE dividends to act as if your are the middleman (or woman). It gives you leverage and takes some of the pressure off. As Tim Ferriss, author of The 4 Hour Work Week says: “Having partners or superiors, often imagined, with veto power allows you to negotiate hard and make impossible demands without being viewed as a bastard and damaging the ongoing relationship with the other side.” This is also why I don’t have the title CEO or President on my business cards or email signature. I don’t want them to know that the buck stops with me as far as the decisions.
- Ask For More, Expect Less – When I was negotiating the hotel deal, I asked for an all you can eat breakfast and dinner buffet to be included for free for each day we were at the hotel, two nights in total. The combined total value of the buffet was $4,000. ($40 X 50ppl = $2,000 X 2 nights = $4,000) We met half way and my group got a full breakfast and dinner buffet with all the trimmings for free.
- Negotiate Near Deadlines – Any time your negotiating, you want to do so at the end of the month or when the parties involved on the other end are up against a deadline. This works best with “use or lose” products or services. For example, if a radio station, newspaper or magazine doesn’t not fill up its add space, its dead air and wont generate any revenue if it goes unused. There is pressure on those sales people to make sure all real estate is sold. This method will also work in industries where the sales people are commissioned. You will have sales people that are hustling to make deals to meet a quota or pad their month commission check, take advantage of that.
- Control Your Body Language – Sales people are trained to read body language and look for “buying signs”. When they don’t receive buying signs, they will start to press and make certain concessions to try to get the buyer to commit. They will ask a lot of open ended questions to get the customer to talk and use that info against the customer. Avoid this by keeping you poker face.
- BONUS TIP – Practice, practice, practice! Negotiations are uncomfortable, so you have to become comfortable with being uncomfortable. Go to your local flee market, resale shop, car dealer ship etc., and practice. The first couple of time will be pure torture but it will pay of in the long run.
What are your thoughts?
Akeem Casey is the CEO of Code Seven Marketing Group; a full service online marketing firm that helps businesses and entrepreneurs leverage the Internet and social media to grow their business. Follow him on twitter, @akeemc
Category: Startup Advice