And there is.
Knowing this is the easy part. Using it is less so, since the key to closing that deal or making the tough sale is no single technique that – in isolation – will get the results you’re after. Effective negotiation is a collection of behaviours, propositions, offers, and concessions that result, in optimum circumstances, with both parties leaving the table (or car yard, or kitchen showroom) feeling that they’ve both got a good deal.
Over the next six issues, Ulster Business will be unpicking the science and evidence behind the most effective negotiation tools. You’ll learn what products to lead with first, when to address the deficiencies of your offering, how to reference competitors in your pitch, when is the right time to ask for the signature, how to use psychological pricing to close the sale, and the single most important thing you should mention when you first meet a brand-new client, prospect, or lead. It’ll form an essential part of your corporate toolkit, so don’t forget to cut out the articles for future reference.
First things first
It’s widely accepted now that when presenting a product or solution to a client, one should present a series of options from which they can choose. Gone are the days of putting all our eggs into one basket and banking on a single HERO product – the best thing since sliced bread that will solve all their work woes.
This begs the question though – in what order should you present the options? Where should you present the most expensive option? In what position (first, last, middle) should you locate the solution that has the best margin, the bigger yield, or the one that you know will make the biggest long-term impact to your client’s wellbeing?
Exciting research from the United States shows us there really is a ‘secret sauce’ to persuading your fellow negotiator and evidence shows this one principle can make a dramatic impact on your likelihood to close the deal. Apply this one technique just once to see the results, and I promise it will fundamentally change the way you present to your clients from this moment on.
And it’s all about Contrast.
The evidence is clear, those organisations who employ the principle of contrast effectively will cash in on improved sales, better engagement with stakeholders, and will hear the magic word ‘yes’ much more often than their counterparts.
The way we perceive something is directly affected by whatever comes before it. Your products can be made much more attractive (or indeed less so) by controlling what comes first. We can understand the benefits and rewards of a product or action better when we see it in comparison with some other alternative, then when we see it in isolation.
Let’s look at how you can put this into action, today.
It drives well, the price is right, you trust the salesperson, and – perhaps most importantly – the it has four USB ports. In the dealership office, you’ve hammered out a nice agreement, and having signed on the dotted, you now own £20,000 of instantly depreciating goodness.
Just after you sign, if not as you’re doing it, the salesperson mentions as an afterthought if you’d like to have custom mats installed before you go to ‘keep it good’, they’re only £99 and it can be added onto your finance deal, making only pennies worth of difference to your monthly payments. Or perhaps it’s a sporty spoiler, or a 10 CD changer, or even a spare tyre (remember when they used to be free?).
The small additional price, in contrast to your new wheels, seems like a drop in the ocean, and most customers say yes.
Peace of Mind
I work with a huge number of organisations in the IT space, very many of them rely on service/support sales to bolster their bottom line. Imagine your goal is to sell a £99 per month service package to new customers. “Our complete service package, to include 24-hour call outs and unlimited site visits is £499, and it really does have absolutely everything you’d need to protect against service outage at all times.”
Let the price sink in, wait for feedback, and be ready to follow up immediately with “If budget is an issue at this stage we can offer a really effective and affordable alternative, it’s only £99 per month and offers full 24-hour remote support so our team will be on hand to take your calls and offer advice and service over the phone – it’s a great way to get you started and ensure you’re completely covered for the time being.”
The second option (the one you are most keen to sell) is at a much more accessible price point, and covers most of their needs, and is much more likely to be chosen.
Sky’s the Limit
Once or twice a year, I take a thorough look at my direct debits, and never fail to balk at the amount of money my household spends on TV and streaming entertainment packages. What felt like a bargain when I signed up seems like a huge waste of money when I realise I’ve only streamed one movie in the past 6 months. I call up to cancel, and just before I do, I’m offered the same deal at 1/3rd of the price.
And I renew. I know, I’m an idiot.
Back at the Office
The Contrast principle may seem like common sense. The fact is common sense is staggeringly uncommon in application. When applied, even casually, this technique is a powerful way to increase your likelihood of getting what you want or need from those around you.
If you need a report on your desk by next Friday, but know the individual has a penchant for submitting on or after deadline, then ask for it Monday, and when they break into a cold sweat you can concede that Friday would do ‘at the very latest’. Not only are you far more likely to get the document by the date you need it, but you look like a helpful and flexible colleague in the process.
In short, next time you’re trying to close a deal, spend a little time planning what you’ll offer first. In the meantime, I’m off to cancel my Netflix account.