Sales Negotiation Skills: Prioritize Your Interests vs Position
What are you fighting for?
As you prepare for a sales negotiation, this is the most important question you can ask yourself. One of the sales negotiation skills you should have in your toolkit is entering the conversation with absolute clarity about what matters most.
In order to reach a satisfactory agreement with a prospect, you must also know what you are fighting for. If you don’t, you may end up winning a battle but losing the war.
Sales negotiations break down when the two parties come to a stalemate. They find that they are at an impasse because they have taken positions that are mutually exclusive. There can be no compromise.
They miss out on stepping back away from these positions to consider the broader range of choices available to them. They don’t explore options that may not give them a “win” on the position but could still achieve the underlying needs or interests they brought into the negotiation.
Sales Negotiation Skills: Prioritize Your Interests vs. Position
A position is usually determined or influenced by underlying interests (the reason why we want what we said we wanted). Position is what we declare; interest is what caused us to say that.
To understand the difference, let’s break it down this way:
Position: The stand that is taken by a party to a negotiation
This is the official defined stance stated by one of the parties. It’s what we say we want.
An example of a position is, “I want a 2-year contract from this customer.” Most of us stop here and proceed with this singular purpose in mind. But it’s important to ask WHY? Whether it’s you or your boss that sets forth this position, you need to know WHY getting a 2-year contract would be helpful.
Let’s say you want a 2-year agreement because this particular customer is very hard to deal with and contract negotiations are routinely prolonged and very time-consuming. It makes sense, you feel, to minimize the time spent.
That reason would be very different from another scenario where a company that will be up for sale is looking to secure longer term agreements so that the company is more appealing to buyers.
Knowing the underlying reason WHY you take a position gives you the appropriate level of flexibility in the negotiation. In our first scenario, you’d respond favorably if the customer offered a quick resolution on a one-year contract with a renewal option in six months. The underlying reason would be satisfied – no protracted negotiation and little time required.
That same alternative would not be as appealing in the second scenario. If you do not know the underlying reasons, you would respond with the same hard line approach in both situations. That would cause you to miss out on a perfectly reasonable solution to the first scenario. As you improve your sales negotiation skills, you'll get a better feel for this in the moment.
While most negotiators get overly focused on positions, you can gain a clear advantage by knowing your own interests and probing to learn the interests of the other party.
Interests – Underlying reasons behind a position, including desires, concerns, goals
Interests are the motivations and underlying reasons behind any position you take. They may involve some emotional, economic, security, ego or control issues, and they may have to do with the desires, concerns, aims or goals of the individual and/or the company. We don’t normally enter into negotiations by sharing our interests. Sometimes, we haven’t even taken time to evaluate this.
In sales negotiations, we often focus on our position instead of focusing on our interests. This is a mistake, and it can be costly. Here’s why:
The basic reason why many people fail to find agreement is that each has taken a position. One wants something that the other doesn't. It starts and ends there. The crucial question that neither party has asked the other is to explain the reason and motivation behind their position.
There's a classic example which illustrates how our knowing the other person's interests might overcome positions.
Two men seated together in a building are at odds on whether to keep a window open or closed. Hearing this ongoing feud, a third person asks about the dispute.
One gentleman demands that the window be closed to avoid a draft. The second gentleman wants the window open for the fresh air. The third person then goes into the next room and opens a window.
This simple solution resolves the problem by providing fresh air to one of the parties while negating the issue of the draft for the other. A creative solution satisfies the interest of both parties.
It's vital to ferret out all the underlying information to determine not only our interests, but the interests of the other side. Being prepared as you enter the negotiation gives you latitude and flexibility without compromising the attainment of what really matters. Discovering what the underlying interests of the other party are will also give you insights that enable you to be creative in reaching a satisfactory outcome for everyone.
All negotiation positions are supported by interests. Only by knowing and defining these interests can we really be effective in negotiating to a satisfying close.