Two Simple Negotiation Tips for Small Business Owners
These are a few tactics that have helped me in my negotiations with new clients.
1. Research in Advance
Learn as much about your counterpart as possible before the negotiation starts.
What are their goals? Why did they contact you in the first place (or follow up with you if you contacted them)?
What is important to them and what is unimportant? What are they willing to give up? What are their constraints or limitations related to this deal?
What has been their experience with other service providers or competitors? What do they like about this kind of service? What problems have they encountered before?
Put yourself in their shoes. Look at the situation from their perspective.
Some of this information you can learn by asking them through a contact form, over phone or email before sitting down at the negotiating table.
Some of it is common sense you can just imagine on your own.
Some of it will be based on general market research not unique to this individual client.
And some of it is based on past experience with other clients.
2. Anticipate Objections and Prepare for Them
Based on your research of the client, what is likely to be a sticking point for them?
You should never be taken by surprise in a negotiation. Have all of your objection material ready in advance, even if you don’t know the specific way your client will object.
“I was wondering if it would be possible to lower the price? My budget is pretty tight right now.”
“Do you offer anything for a lower price? I’d prefer to start with something small and work my way up to the more expensive service.”
These are both price objections. But they are based on two very different problems.
In the first, the problem is his budget–he is short on cash. In the second, the issue is not the money, but rather what he will get for that money.
For instance, if budget is an issue, can you offer a payment plan? Can you take some compensation in cash and some in another form (a service that he can give you, referrals of other clients, etc)? Can you convince him that your service is worth more than other stuff he is currently spending money on?
If he is questioning the quality of your service, how can you demonstrate more competency? Are you prepared to close the deal at the lower price point if that’s what it takes to get him in the funnel, and then upsell him from there later on?
Decide on the major types of objections, obstacles or problems you will encounter, and prepare for them.
This will help you communicate much more effectively during the negotiation process, and raise your chances of getting a deal.