What is Negotiation?

Negotiation is the mean by which people deal with their differences. Whether those
differences involve purchase of a new automobile, a labor contract dispute, the terms of
sale, a complex alliance between two companies, or a peace accord between warring
nations, resolutions are typically sought through negotiations. To negotiate is to seek
mutual agreement through dialogue.

A business negotiation may be a formal affair that takes place across the proverbial
bargaining table, in which you haggle over price and performance.

It could be much more casual, such as meetings of a manager with his subordinate
employees whose collaboration is needed to get a job done.
If you are a supervisor, manager, or executive, you spend probably a good part of your
day negotiating with people inside or outside your organization – often without even
realizing it.
Given the role of negotiations in our personal and professional lives, it is important to
improve our negotiating skills. Even a modest improvement in those skills can yield a
sizable payoff, such as larger pay raise, a better deal on a home purchase, or more
effective working arrangements in the office.

Types of negotiations
Distributive Negotiation: A negotiation in which the parties compete over the
distribution of a fixed sum of value. The key question in a distributed negotiation is “who
will claim the most Value”?. In distributive negotiations, a gain by one side is made at the
expense of the other.

Distributive Negotiation can also be referred as a Zero-sum, or constant-sum, or the win-

lose situation.

A seller’s goal is to negotiate as high as possible, a buyer’s goal is to negotiate as low as

possible.

Distributive negotiation is more like a tug of war, each negotiator aims to “pull” the final
deal point as close to his or her side’s desired price as possible.

Information plays an important role in Distributive Negotiation. The less the other side
knows about your weaknesses and real preferences, and the more it knows about your
bargaining strength, the better will be your position.

Key points to remember to achieve success in Distributive negotiation

The first offer can become a strong psychological anchor point, that one sets the
bargaining range. The negotiation outcomes often correlate with the first offer. So start at
the right place.
Do not disclose any significant information about your circumstances-Including why you
want to make a deal, your real Interests or business constraints, your preferences among
issues or options, or the point at which you would walk away from the table. It is
advantageous, however to let the other side know that you have the good option if this
falls through.

Information about the other side can benefit you. Learn as much as possible about the
other side’s circumstances and preferences-Including why they want to make a deal, their
real Interests and business constraints, and their preferences among issues or options.

Exploit what you learn about the other side in setting your first offer or demand.

Don’t overshoot. If you claim aggressively or greedily, the other side may walk away.
You will have lost the opportunity to make a deal.

Integrative Negotiation
Integrative Negotiation: A negotiation in which the parties cooperate to achieve
maximum benefits by integrating their interests into an agreement. These deals are about
creating values and claiming it.

In Integrative negotiation your task is two fold:

1) to create as much as value for you as well as for the other side.

2) to claim value for your self.

Integrative negotiation could also be termed as win-win situation.

Integrative negotiation could also be termed as collaborative bargaining, for this type of
negotiation, the parties should look for creative options, and not focus on which
concessions to make.

You have to believe that its in your interest to look for ways to benefit your negotiating
counterpart, your goal is not to hurt them, but to help them at little cost to your self and
have them help you at little cost to them.

The more creative you are at coming up with things that are good for both of you the
happier both of you will be.

Fisher, Ury, and Patton’s popular book, Getting to yes shifted people’s focus from I-Win-
you-lose situations to Integrative Negotiations in which each party can claim satisfaction.

They provide approaches both for creating value (focus on Interests, not position,
separate people from problems) and for “principled” value claiming (Identify objective
standards)
Key points to Remember the Integrative Negotiation
Provide significant information about their circumstances.
Explain why they want to make a deal.
Talk about their real interests or business constraints.
Reveal and explain in general terms their preferences among issues or options.
Consider and Reveal any additional capabilities or resources they have that might meet
the other side’s interests and could be added to the deal.
Use what they learn to find creative options that will meet the interests of both the parties
to get the greatest extent possible.

The negotiator’s Dilemma

The Negotiator’s Dilemma describes the situation faced by people who enter any type of
bargaining situation. They must determine which game to play
1) Aggressively claim the value currently on the table (and possibly come out as a loser)
which is the type of distributive negotiation, or

2) Work with the other side to create even better opportunities that can be shared, which
is the type of Integrative Negotiation.

Multiple Phases and multiple parties

Many negotiation involves more than two parties, and they sometime take place in
phases, each devoted to one of several important issues. Each representing a “Type” of
negotiation.
Multiphase Negotiations
Multiphase negotiation and the prospect of future dealings offer important advantages for
parties who are trust worthy and who would like to foster cooperative behavior.

Early phases allow the parties to built trust by performing their agreements as promised.

A failure to perform warns other side to be careful and to create enforcement mechanisms
for agreements.
Multiparty negotiations
Business and professional Negotiations commonly involve more than two parties, and
more than two people.

Coalitions can form among the parties. Coalition makes it possible for weaker parties to
gather the strength to push through their preferred proposals, or at least to block those
they find acceptable.

There are at least two types of coalitions:

a) A Natural coalition of allies who share a broad range of common Interests. A natural
coalition is hard to break
Eg: an environment agency and a citizen's nature conservation group might form a
coalition to block development initiatives even without explicit agreement to do so.
A single-issue coalition, in which parties that differ on other issues unite to support or
block single issue. E.g.: A labor union and a nature conservation group might form a
coalition to block an antiunion developer from building a shopping mall in a wooded
area. Each has a very different reasons for joining the blocking coalition, which makes it
feasible for the other side to put a wedge between them.

The challenge of multiparty negotiation is managing coalitions, breaking them apart or

keeping them together depending on your own interest

Key concepts in Negotiation

Any successful negotiation must have a fundamental framework based on knowing the
following:
The alternative to negotiation
The minimum threshold for negotiated deal.
How flexible a party is willing to be, and what trade-offs it is willing to make.

Four concept for essential for negotiation

BATNA (best alternative to a negotiated agreement)
Reservation price
ZOPA (Zone for possible agreement)
Switching to Integrative Negotiation.

BATNA: A concept developed by Roger Fisher and William Ury, it is one’s preferred
course of action in the absence of a deal.
Knowing your BATNA means knowing what you will do or what will happen if you fail
to reach agreement in the negotiation at hand.
People who enter negotiations without this knowledge put themselves in a bad position,
being unclear about their BATNA’s.

Strong and Weak BATNA’s

If your BATNA is strong you can negotiate for more favorable terms, Knowing that you
have something better to fall back.

A weak BATNA puts you in a weak bargaining position, whenever a negotiator has a
weak BATNA it is difficult to walk away from the proposal.

Take a minute to think about your own best alternative to whatever deal you are presently
negotiating. Do you have one? Is it strong or weak? Can you quantify it?

Improving your position

Improve your BATNA
1. Anything that can be done to improve your BATNA will strengthen your position.
2. If you have the strong BATNA and if you are certain that its much stronger than
anything the other side can muster, then discretely let the other side know that you’re
negotiating from a strong point.

Identify other side’s BATNA

Knowing other sides BATNA is extremely helpful when you can obtain it. You can do
this by:
1. Contacting sources within the industry
2. Checking potentially relevant business publications.
3. Reviewing annual reports (or public Filings)
4. Asking questions informally of the negotiator or others within the company.
5. Imagining what our interests, preferences, and your needs, would be if you were in
their position.

Weaken other party’s BATNA

Anything that weakens the other side’s alternative to a deal will improve your relative
position.
When you have no alternative
No negotiator is in a weak position than one with no alternative to a deal. In this case, the
other side can dictate the terms, The BATNA less party is a deal taker not a deal maker.
BATNA is not always simple
Most business negotiations involve many variables, some of which cannot be quantified,
this makes for a fuzzy BATNA.

In transactions that involves price and various other features you can make BATNA less
fuzzy by assigning a monitory value to the various features and adjusting the BATNA
value by that amount.

Price is not always the fulcrum of negotiated deals. Qualitative issues also matters.

Reservation Price
The reservation price (also referred to as a walk-away) is the least favorable point at
which one will accept a deal. Your reservation price should be arrived from your
BATNA, but it is not usually the same thing.

ZOPA
ZOPA (zone of possible agreement) is the area or range in which a deal that satisfies both
parties can take place, it is the set of agreements that potentially satisfy both parties.
Each party’s reservation price determines one end of ZOPA.

The ZOPA itself exist in the overlap between these high and low limits, that is between
party’s reservation price.

Value Creation Through Trades

Negotiating parties can improve their positions by trading the values at their disposal.

Value creation through trades occurs in the context of integrated negotiations. It usually
takes the form of each party getting something it wants in return for something it values
much less.

For a supplier, that greater value might take the form of an extended delivery period. For
the customer, having deliveries spread out during the month might be of no great
consequence, but for supplier with strained production facilities it may be very important.
For a customer, greater the value at low cost might take the form of three months repair
services if needed. For a vendor who has great confidence that its product will need no
repairs during that period, free service is nothing of consequence. In providing it to the
customer values the repair service highly.
For an employee, the opportunity to work from a home office two days each week may
produce great satisfaction while costing the employer nothing.

Preparation for Negotiation

• For the negotiator, preparation means understanding one’s own position and Interests.
• The position and Interest of the other party or parties.
• The issue at stake and the alternative solution.
• Understanding your BATNA, reservation price and those of the other parties, the zone
within which an agreement can be struck.

Step 1: Consider what a good outcome would be for you and the
other side
• Never enter into negotiation without first asking yourself." what would be a good
outcome for me? What are my needs, and how do I prioritize them”.
• Rather ask the same questions from the perspective of the other side.
• Negotiate a shorter leave.
• Schedule the leave for the slow part of the year.
• Ask Laura to work out a plan with her coworkers that clearly accommodates the
business needs of the Unit.
• Negotiating experts refer to the Interests of the various parties when they urge people to
prepare.
• Determining the interests of the other side, however is sometimes difficult, especially
when that side conceals its Interests.

Step-2: Identify potential Value Creation Opportunities.

• Once you Understand what a good outcome would look like from your Vantage point
and from the vantage point of the other side.

• You can Identify areas of common ground, compromise , and opportunities for
favorable trades.

Step 3: Identify your BATNA and Reservation Price, and Do the

same for the other side.
• You can avoid appearing needy by building a strong BATNA and letting the other side
know that you are prepared to walk away if it demands to many concessions.

Step-4: Shore up your BATNA

• Anything you can do to improve your best alternative to a negotiated deal will put you
in a stronger position.
• Shoring up one’s BATNA is an Important part of preparation, but is not limited to the
“pre-Negotiations” phase. Good Negotiators work to improve their BATNAs before and
during deliberations with the other side.

Step-5: Anticipate the Authority Issue

• There are real advantages to negotiating with the person who has the power of
authority.
1. All of your reasoning is heard directly by the decision maker.
2. The benefits of the good relationship built at the bargaining table are likely to be
reflected in the deal and its implementation.
3. There are fewer chances of disputes or misinterpretation of particular provisions.
4. If your aim is to make the person on the other side of the table hungry for a deal with
you, your efforts will do no good if the real decision maker is somewhere in the
background.

• Dealing with negotiators who lack full authority, however may have advantages:
• Confirm the ground rule that neither side will be committing his or her company in the
negotiation.
• Suggest using the opportunity to discuss your respective interests and to come up with
creative options and packages.
• When negotiating about money issues, leave yourself some wriggle room in case the
final negotiator pushes harder in a second round. If there is no wiggle room, strongly
convey the message that this is your best offer.
• Who will be at negotiating table?
• What is that person’s title and area of responsibility.
• How long the other side’s representative has been with the company.
• How the company is structured.
• How the negotiator is viewed within the organization.
• As for your side, always know exactly how much authority you have in a negotiation:
1. Are you authorized only to commit to a predetermined range of deals for which
committee approval has been obtained? What if you can negotiate something better? what
would committee consider to be better.
2. Are you authorized to commit to a deal in the best way you can? Would your company
prefer that you bring such a deal back for normal review and approval?
3. Is your authority limited on money issues but not on other creative options without
significant financial implications.
4. Are you authorized to provide information about your company’s needs, Interests and
preferences, if the other side engages in a good-faith, reciprocal exchange.

Step-6: Learn all you can about the other side’s people and culture,
their goals, and how they’ve framed the issue.
• Who are those Individuals on the other side of the table?
• Are they experienced negotiators or novices?
• Are they aggressive or they conflict-avoiding accommodators?
• Is the culture of their organization bureaucratic or entrepreneurial?
• Are the people on the other table authorized to make a deal.
• What are they attempting to achieve and how critical is this negotiation to their
business.

Step-7: prepare for flexibility in the process, don’t lock yourself into
a Rigid sequence
• Start with the assumption that the process will not unfold in a predictable, linear
fashion.
• Be prepared for changes on both sides: new people and unanticipated developments.
• Treat every change as an opportunity for learning.

Step-8: Gather External Standards and criteria Relevant to fairness

• Both sides want to believe that any deal reached is fair and reasonable.
• If the parties expect to have continuing relationship, a sense to fairness and
reasonableness matters.
• External objective or criteria can often be used to establish what is fair and reasonable.
• An important part of the preparation is:
• Researching which criteria might be applied.
• Being prepared to show why those more favorable to you and are more relevant.
• Being prepared to show why they are less relevant and less favorable to you.

Step-9: Alter the process in your favor

• Whoever set the agenda did so with a particular outcome in mind-one that benefits that
reason or entity.
• People are deferring to someone with greater organizational clout-your argument not
withstanding.
• Yours is the “lone voice in the wilderness” and out of step with others.
• Kolb and Williams make these specific recommendations about the process moves:
• Work behind the scenes to educate others on your ideas.
• Reframe the process.

Getting the other side to the table

• Offer Incentive: what are reluctant person’s needs: Money, time, your support?
Determine those needs and pose them as potential benefits of negotiation.
• Put price on the status quo: spell out the cost of not negotiating.
• Enlist support: Allies can sometimes accomplish what other measures cannot.

Making a good start

• Express respect for the other side’s experience and expertise.
• Frame the task positively, as a joint endeavor.
• Emphasize your openness to the other side’s Interests and concern.
• Explicitly discuss the process.
• Listen carefully to the discussion of the process.
• Offer to explain some of your Interests and concerns first.

Tips for establishing the right tone

• Never Underestimate the value of breaking bread.
• Use small talks at the beginning to dispel tension.
• Learn from what the small talk reveals about the other negotiator’s style.
• If the other side is very formal don't speak too casually.
Anchoring
• Anchoring is an attempt to establish a reference point around which negotiations will
make adjustments.
• You can gain an advantage by putting the first offer on the table.
• It becomes a reference point of subsequent pulling and pushing by the participants.
• When should you anchor?
• Where should you place your anchor?
• Your first offer proposal should be at or just bit beyond what you believe is the other
side’s reservation price.
• Wherever you place an anchor, be prepared to articulate why your offer or proposal is
reasonable or justifiable.
• Anchoring with a price (or a proposal) creates two risks.

A) if you are two aggressive, the other side may conclude it will be impossible to make a
deal with you.
B) if you have made an erroneous estimate of the other side’s reservation price, your
offer will be outside the zone of possible agreement.

Counter Anchoring
• If the other side makes the first offer, you should recognize and resist that offer’s
potential as a psychological anchor.
• Anchors are most powerful when the uncertainty is highest.
• When no one has a clear idea what the price of a company or a piece of equipment
should be.
• When no one has the clue as to the appropriate price.
• You can reduce the other side’s anchoring power by reducing the uncertainty that
surrounds the issue.
• Don’t let the other side set the bargaining range with an anchor unless you think it’s a
sensible starting [Link] you think that anchor suggest an unfavorable or unacceptable
starting point , steer the conversation away from numbers and proposals.

Be prepared for concessionary Moves

• Once an anchor point is on the table, the parties generally get engage in a set of moves
and countermoves that they hope will end in an agreeable price or set of arrangements.
• Add an additional concessionary move and as an indicator of significant additional
flexibility.
• The concessions are not always true, specifically when the other side is not in hurry.
• The best advice about concessions is to avoid the impulse to make them.

Tips for Inexperienced Negotiators

• Look to your BATNA before you consider making concessions, if your BATNA is very
strong, a concession may be unnecessary in making a deal.
• If you are impatient to get it over with because negotiating is stressful, take a break
before you consider a concession.
• If your need to be liked or seen as a reasonable person is urging you to make a
concession, forget about it.

The ticking Clock

• From the buyer’s perspective seller should never be allowed to feel that he can
indefinitely sit on the buyer’s most recent bid while he awaits a better offer.
• The seller will simply use this to improve his BATNA.
• The remedy is to have an Exploding Offer.

Package option for a favorable deal

• Package option has dual benefits, a) people don’t like to feel pushed into a corner. B)
when the other negotiators wont discuss their interests, you can infer them by noticing
which proposal they prefer.
• Before presenting alternative proposals, however do the following:
• Assess the value of each option to each side.
• Consider whether the diminution of one option would be offset by an enhancement of
another.
• If you prefer one of the alternatives, adjust at least one of the proposals so that you feel
equally positive about at least two of them.

Closing the deal

• Signal the end of the road before you get there: Speak about the parameters of what you
would like in final deal.
• Allow flexibility if you anticipate going beyond the final round: Don’t show too much
of flexibility so that the deal gets rejected by the other side.
• Consider whatever final trade you would be willing to make if you end up requesting
significant adjustments in the final term.
• Discourage the other side from seeking further concessions: Express your willingness to
accept the total package without changes.
• Explain that adjustment in their favor on one term would have to be balanced by in your
favor on another.
• Write down the terms.

Tactics for Integrative Negotiations

• Getting Started: Don’t start with numbers. Instead, talk and Listen.
• Frame the task positively, as a joint endeavor, from which both sides should expect to
benefit.
• Emphasize your openness to the other side’s interest and concern.
• Don’t make proposals too quickly.
Instead of hastily throwing out an offer, try these techniques
• Ask open-ended questions about the other side’s needs, interests, concerns, and goals.
• Probe the other side’s willingness to trade off one thing for an other. ”do you care more
about X or Y”.
• Inquire about the other side’s underlying interests by asking why certain conditions.
• Be an active listener.
• Express empathy for other side’s perspective, needs and interests.
• Adjust your assumptions based on what you have learned.
• Be forthcoming about your own business needs, interests and concerns.
• Striking a balance between empathy and assertiveness is essential to effective
negotiating.
• Work to create a two way exchange of information. Stay flexible about who asks
questions and who states concern first.
• Continue your relationship building efforts even after the negotiating has begun.
• Always remember that the other side consists of human beings with feelings, limits, and
vulnerabilities.
• Refrain from personal attack, don’t accuse or blame. Maintain a sense of humor.
• When an issue seems to make another negotiator tense, acknowledge the thorniness of
the issue. Don’t feel pressured to close the deal quickly, Instead generate options that
offers mutual gain.

Tips for active listening

• Keep your eyes on the speaker.
• Take notes as appropriate.
• Don’t allow your self to think about anything but what the speaker is saying.
• Resist the urge to formulate your response until after the speaker has finished.
• Pay attention to the speakers body language.
• Ask questions to get more information and to encourage the speaker to continue.
• Repeat in your own words that you have heard to ensure that you have understand and
to let the speaker know that you’ve processed his or her work.
Look for options that exploits differences
• Access to resources: Creating values for both sides.
• Future Expectations: The buyer will get a lower price and the seller will be able to
capture the upside growth in the business he anticipates.
• Time preference: The timing of the deal can be a barrier to a mutually satisfactory
conclusion.
• Risk Aversion: What is highly risky for one party is often less risky for another. Parties
often have different risk tolerances.

Take your time

• Don’t be tempted to close the deal quickly.
• Spend a bit more time finding a deal that is better for both sides.
• Signal that the proposal on the table is worth considering.
• Begin the search for mutual beneficial option.
• Move from a particular issue to more general description of the problem, then to
theoretical solution, then finally back to the actual issue.
• Pay special attention to shared interests.
• Consider joint brain storming with the other side.
Selling Skills – Selling to customer
• Customer Sales Planning:
• Once the prospect is been located and qualified the sales person is ready to plan the
sales Interview.
• Planning is very important in actual sales.

Reasons for planning the sales call

• Builds self confidence: If you are to give a sales presentation before a large group of
people, you tend to be nervous, this can be reduced simply by planning.
Develops an Atmosphere of good will: The sales person who understands customer needs
and is prepared to discuss how a product will benefit the prospect is appreciated and
respected by buyer.
• Created professionalism: Good business relationships are built on your knowledge of
your company, your industry and your customer’s need.
• Increases sales: A confident sales person who is well prepared to discuss how products
will solve particular needs will always be more successful then the unprepared sales
person.

Elements of sales call planning

• Always have a sales call objective: A salesperson should meet with a prospect with an
objective in mind. Sales call objective should be 1) specific, 2) measurable, and directly
beneficial to the customer. E.g. the colgate sales person might have objective of checking
all merchandise and having the customer make routine reorder on merchandise and sell
promotional quantities of colgate toothpaste.
• Customer profile provide insight: As much as relevant information as possible should
be reviewed regarding the firm, the buyer, and the individuals who influences the buying
decision before the sales call is made.
• A customer profile should tell you:
• Who makes the buying decision in the organization.
• What is the buyer’s background? The buyer expectations of you?
• What are the desired business terms and needs of account, such as delivery, credit,
technical service.
• What competitors successfully do business with the account? Why?
• What are the purchasing policies and practises? E.g.: does the customer buy special
price promotion offers.
• What is the past history of account? Eg: Xerox.
• Customer benefit plan: beginning with your sales call objectives and what you know or
have learned about your prospect, you are now ready to develop your customer benefit
plan.
• Select the features, advantages, and benefits of your product to present to your prospect.
This addresses the issue of why your product should be purchased.
• Develop your marketing plan, If selling to a wholesaler or retailer, your marketing plan
should include how, once they buy your product, they will sell your product to their
customers.
• Develop your business proposition, which includes such preposition such as your price,
percent mark-up, forecasted profit per square foot of shelf space, return on investment,
and payment plan.
• Develop a suggested purchase order based on your customer profit plan. A proper
presentation of your analysis of customer needs and your products ability to fulfil these
needs along with the satisfactory business propositions and marketing plan.

Body Language
• Actions speak louder than words.
• Close 90% of the message is transmitted non verbally.
• Face to face communication is more effective than telephone conversation.
• One should learn the body language, in order to know that when it is in conflict with the
spoken words, body language is always the portrayal of the truth.
• Everybody has his own personal space and others invade it at their peril.
• Intruding on another’s personal zone may cause such physiological changes to take
place within the body that he will become agitated and want to move to a safer distance,
even though he may smile and pretend to enjoy it.
• Intimate distance (up to 50 cm): People guard this distances as if it were their own
personal property. The close intimate distance (up to 15 cm) indicates people who are
allowed to touch, such as marriage partners, lovers or children. The far intimate distance
(15-50 cm) is reserved for close friends.
• Close personal Zone (0.5-1.25m): this is the distance at which we stand from others at a
party, social events and friendly gathering.
• Social Zone (1.25-3.5m): This is the distance one allows when communication is
inevitable with strangers such as washing machine repair man or a new collegue at work.
A close social zone (1.25m) should be observed when discussing business with the
receptionist.
• Public Zone: Reserved for addressing large group of people, at a social function or
lecture.

Body Contact
• It is perfectly acceptable for a manager to clap a subordinate on the back after a job well
done.
• A sales person would need to have a good relationship with a customer because to do so
would mean invading his personal space.
• Putting your arm around a customer's shoulder may communicate a closeness perceived
by a sales person but rejected by a customer.
• When people shake hands many things are communicated, the weak hand shake suggest
a weak character and the other person may feel that he can dominate you.
• While the “Bonecrusher” may imply that you wish to dominate or seeking to impress.
• Excessive strong and shakes, regrettably doesn’t communicate the image of a helpful
sales person.
• Handshake should be warm and strong without being “wet fish” or knuckle grinding”
Hand to face gestures
• Any spontaneous movement of the hand to face is an indication that the person is
uncomfortable and probably lying.
• A child who doesn’t want to hear that its time for him to go to bed will cover his ears.
• If there is something frightening show on TV a person will cover his eyes with his arms.
• If she tells a lie her hands will immediately go to her mouth in an attempt to conceal the
untruthful words.
• If, when you ask a customer ‘what are my chances of getting the order? The reply (I’d
say they are pretty good) is accompanied by pulling the collar, scratching the neck,
rubbing the ear or the eye, pretending to scratching the nose or covering the mouth the
implication is that the person is LYING.
Arm folding
• A husband arrives late at home for dinner (again). His wife standing in kitchen with her
hands folded-Indicating that the row is brewing.
• If people have negative thoughts about you or your product they may fold their arms as
‘shield’ against your unfavourable message.
• If the folded arm is accompanied by clenched fists it suggest that the person may
explode any moment.
• When the listener folds his arms not only he is paying less attention but he is likely to
have more comments about the speaker.
Eye contact
• You may force your self to look at person’s face while talking, thereby pretending to
have interest you don’t feel, but you consciously cannot control the size of your eye
pupils.
• The pupil will change size with the interest the individual feels e.g. if a man is looking
at a women and feels attracted to her his pupils will dilate, women reacts the same way to
men.
• If a customer is offered an interesting proposal his eye pupils automatically enlarge.
• It may happen that the buyer expresses the shock verbally on hearing the price, only to
be betrayed by lack of pupil reaction.
• As people’s mood changes from positive to negative the eye pupil will contract or dilate
accordingly.
• When we are listening, our eye contact is as high as 100%, but when we are talking our
eye contact can be as low as Zero.
Facial Expression
A sales person however, should read the facial expression in relation to other body
movements which are much more reliable indicator of real feelings because they are
more difficult to control.

Conceptual Selling:Conceptual selling is the opposite of traditional or

stereotypical sales. It is recognising that there is a natural thought process that goes on in
someone's mind when they are considering buying something. There are three phases;
• Cognition Thinking
• Divergent Thinking
• Convergent Thinking

Cognition Thinking
• Let's take a look at the example of a person buying a drill. People don't go and buy drills
just for the fun of it, they buy drills because they need to create hole in wall. It won't
matter if you have the best, state of the art drills in the world. If a person doesn't have a
requirement, you will have a pretty hard time selling them a drill. This phase is when a
person has a concept of a perceived need. A person won't all of a sudden think, "hey I
think I will go out and buy a drill today". When a person is cognizant that their is a
discrepancy between where they are and where they want to be, this is called 'Cognition
Thinking'. It is at this point a person is developing a concept of what they need.
• A word of warning, even if a person has already formed their concept, it doesn't mean
they will automatically buy form you. The first part of you job in selling is connecting
with that person, and understanding their concept.
• This process is how rapport is built, if you have someone come to you with a concept of
what they want, take the time to understand it, perhaps even expand on it, who knows
that person may also leave with drill bits, safety goggles, and an extension lead.

• Divergent Thinking
• Divergent thinking is when the person starts to explore of the possible solutions for their
perceived problem. It may well be that they go over to uncle Freddy's and borrow his
drill. They may decide to hire a drill for the day. They may decide that they just can't live
without a drill in their tools shed.
• This is where your marketing comes in. Bob goes to the web and does a search for
'power drills', and their you are. Jim's Handyman's Tips & Tools website. Bob likes what
he reads, thinks that old Jim really knows what he is talking about, goes to the 'contact
me' button and makes the call, or sends the e-mail.
• When Bob calls and says, "I am looking for a drill", Jim doesn't start raving about the
latest and greatest drill that he has to offer. He asks quietly and calmly, what kind of
work are you planning in doing with it? How many holes, What size, What are you
drilling into? Jim is a consultant now, not a salesperson. Jim is helping Bob explore his
concept and also becoming instrumental in the process of divergent thinking. Bob is
thinking, boy that Jim sure knows what he is talking about, what a great guy!

• Convergent Thinking
This is the part where many traditional or stereotypical sales people often begin,
convergence. Convergent thinking is when a person has formed a strong concept of what
they need, they have explored possible solutions for the perceived problem. They are now
ready to converge on the best solution. Bob is naturally going ask Jim what he
recommends. This is because Jim has taken the time to understand Bob's situation and at
the same time positioned himself as an expert on this particular subject. Is Bob going to
buy from the trusted Jim, or, off one of those gaudy, offensive adds promoting the latest
and greatest? It is a 'no brainer' in my opinion.

Strategic selling
• The starting point for strategic selling is figuring out

a) which customers produce the bulk of your sales, and

b) what they are buying. Armed with this information, you can strategically plan how to
increase sales If you want to maximize your sales performance, take a strategic approach
to selling.

• “The 80/20 rule" applies to customers, where approximately 20 percent of customers

produce approximately 80 percent of sales?
• If you want to sell strategically, you need to have access to specific data elements. Plus,
you need to be willing to perform data analysis.
• Which data elements do you need? This list provides a reasonable starting point:
• Customer Name
• Revenue by Month by Customer
• Gross Margin or Gross Profit by Month by Customer (this is only necessary if it
impacts your performance measurements)
• Product or Service Name (for each product or service purchased by each customer)
• Product or Service Quantity (for each product or service purchased by each customer)
• Product or Service Unit Price (for each product or service purchased by each customer)
• Product or Service Extended Price (quantity x unit price)
• This data can be used to analyze the buying habits of your customers. Sort it in various
ways to answer the following questions:
• Which customers buy the most from you?
• What is the trend for each customer's purchases? Are they buying more or less when
you compare the current month to preceding months? How about when you compare the
current month to the same month in the previous year?
• Which products or services are they buying?
• Are the amounts purchased in line with your expectations and the commitments that
have been made by your customers?
• Which products or services are they not buying?
• Why aren't they buying these other products or services?
• Once you have completed the first stage of analysis, consider this next set of questions:
• How much time should you allocate to each customer in your territory? (Tip: You
should spend 80 percent of your time with the customers that buy the most and/or offer
the greatest potential for sales growth.)
• What is your plan for increasing sales to each of your customers? (This includes selling
more of what they have already been buying, and selling other products or services that
they haven't purchased from you previously.)
• Which new prospects should you pursue? (Tip: Which prospects can your existing
customers refer you to? Which prospects have the greatest potential to produce
significant sales?)
• It may not be easy for companies to extract the data that is required to support strategic
selling. However, arming salespeople with this data is the best investment a company can
possibly make. Strategic selling enables salespeople to maximize their sales, which in
turn maximizes the company's overall sales and profitability.
• If sales cycles are relatively short, it would be ideal for the data to be available on
demand, with the minimum frequency being weekly. For longer sales cycles, providing
the data on a monthly basis may be adequate.
Selling to superiors
• Different types of buyers may have very different reasons, or buying motives, for
purchasing the very same product or service.
• Understanding each prospect’s unique buying motives allows you to present your
product or service in the way that your prospect wants to perceive it – which makes it far
more likely that your prospect will be willing to listen to you.
• Building RapportMany organizations look to their executives to help maintain the status
quo. Corporate executives are often paid to ensure that the organization doesn’t deviate
from its present course. Their role in many organizations is actually to vet new ideas and
slow the pace of change in order to keep the organization from making chaotic changes in
direction and focus. Executives, must be also answerable for their actions and decisions.
In fact, many executives feel they are constantly trying to balance the interests of four
different constituencies – their superiors, their peers, their team and their customers. This
perspective illustrates why “teamwork” and “consensus” are so appealing to this type of
prospect.
• Their success depends on their ability to gain approval from peers and superiors and to
get “buy in” from the rank-and-file employees as well.
• Their position in the company often dictates a personal buying agenda that favors
solutions that:* Promote teamwork* Are mainstream and widely accepted* Help them
avoid “sticking their necks out* ”Are “sensible” or “mainstream”* Help the organization
“advance steadily”* Keep everything on a “safe course”* Are predictable and reliable*
Support and validate their previous decisions
• Positioning your product or serviceBefore you start describing your product or service,
you’ll need to “set the stage” or introduce your product by positioning it as the perfect
solution for your individual prospect. When you’re selling to a corporate executive, be
aware that unlike the entrepreneur, radical shifts in direction are not part of this
prospect’s universe, because shifts invalidate whatever the executive has worked so hard
to sustain. Instead, every new purchase must be justified as one more complementary
step, another building block that fits in neatly with all the previous steps and [Link]
this in mind, you’ll want to position your product or service using phrases similar to
these:* “Supports what you have already accomplished”* “Is not a departure from what
you’re doing”* “Right in line with the direction you are taking”
• Positioning your organizationIn order to position your organization as the ideal provider
for your corporate prospects, you’ll need to understand that unlike the entrepreneur who
answers to no one, the corporate executive feels pressure to choose providers that are
acceptable to superiors, peers and subordinates. When talking to a corporate executive
you’ll want to use phrases like these to describe your organization:* “Team players”*
“Widely accepted”* “Mainstream, balanced”* “Committed to a team-oriented approach”
• Describing your benefitsThe chief benefit that a corporate executive may be looking for
is the ability to avoid close scrutiny. Since taking the heat for a bad decision could mean
“career suicide,” the corporate executive is likely to want a solution that they won’t have
to defend or explain later. With this in mind, you might want to position the benefits of
your product or service in the following terms:* “Nothing you have to defend or
explain”* “Nothing you have to apologize for”* “Results everyone accepts”* “Outcomes
that are widely approved”
• Positioning your price as a true bargain
• Your corporate prospect is likely to be seeking products and services with prices that
could be described in terms like these:* “Priced within the mainstream”* “In line with the
industry .
Selling to Subordinates, peer groups
• Psychologists have noted for years that people express their personal needs through
their behavior. Let’s look again at the two customers I described.
• The first customer is combative — a person showing this behavior may have strong
esteem, independence, and ego needs. One way to meet the personal needs of such a
customer may be to demonstrate how your product or service is exclusive or represents
status.
• The second customer is passive — this person may have personal needs for security or
low risk. Here, stressing a product’s safety, reliability, or long-term warranty, could
sufficiently meet this customer’s unique needs.
• Another tactic can be effective when dealing with this type of customer behavior. If the
product or service is new, limited, or regarded as a status symbol, stress those qualities.
They are likely to appeal to this customer’s need for esteem and independence. Above all,
present the benefits with conviction. A passive customer, by comparison, may view the
sales call as a threat. To get this customer involved in the call may require extra patience
and support. By using no threatening, open-ended questions, the salesperson can induce
discussion and cooperation regarding business needs, helping the passive customer to
recognize the meeting as an opportunity instead of a threat.
• Here again, other tactics may be useful. For example, while a new product or service
may appeal to the needs of the combative customer, it may intimidate the security-
oriented, passive buyer. In this case, it would be more effective to stress that the item
comes with a long-term warranty or represents little change from its predecessors.
Continue to be patient; present benefits deliberately, a little at a time, and ask questions to
get the customer’s feedback. Make sure not to overwhelm the customer with information.

BATNA
In negotiation theory, the best alternative to a negotiated agreement or BATNA is the
course of action that will be taken by a party if the current negotiations fail and an
agreement cannot be reached.
If the current negotiations are giving you less value than your BATNA, there is no point
in proceeding. Prior to the start of negotiations, the parties should have ascertained their
own individual BATNAs.
BATNA was developed by negotiation researchers Roger Fisher and Bill Ury of the
Harvard Program on Negotiation (PON), in their series of books on Principled
Negotiation that started with Getting to YES. Nobel Laureate John Forbes Nash has
included such ideas in his early undergraduate research.
For example, if I have a written offer from a dealer to buy my car for $100 dollars, then
my BATNA when dealing with other potential purchasers would be $100 since I can get
$100 for my car even without reaching an agreement with such alternative purchaser.
A party should generally never accept a worse resolution than its BATNA. Care should
be taken, however, to ensure that deals are accurately valued, taking into account all
considerations (such as relationship value, time value of money, likelihood that the other
party will live up to their side of the bargain, etc.) These other considerations are very
difficult to value, since they are often based on uncertain considerations, rather than
easily measurable and quantifiable factors.
Examples of other offers that might or might not be better than the BATNA in the
example above might be:
An offer of $90 by a close relative (is the goodwill generated worth $10 or more?)
An offer of $125 in 45 days (what are the chances of this future commitment falling
through, and would my prior BATNA ($100) still be available if it did?)
An offer from another dealer to offset $150 against the price of a new car (do I want to
buy a new car right now, the offered car in particular? Also, is the probably minuscule
reduction in monthly payments worth $100 to me today?)
BATNA is seen in negotiation fields as the single most important source of negotiation
power. Negotiators don't use their BATNA merely as a safety net, but rather as a point of
leverage in negotiations.
Consider the following business example: Company one can choose to buy from
companies two, three and four - but companies two, three and four can only sell to
company one. Company one can use their powerful BATNA position to leverage a better
deal by playing companies two, three and four against each other. This is a common
practice among purchasing and procurement managers in the business world.
Whilst your alternative options, and therefore your BATNA might be known to you, very
often your BATNA may not be. So time and energy are demanded to figure out which
options are really available to you and actionable. Even if your alternative options are
known, they need to be real and actionable. A Project on Negotiation Executive Seminar
experiment and other experiments have proven that most managers overestimate their
BATNA whilst simultaneously investing too little time into researching their real options.
This results in poor or faulty decision making from overconfidence and good choices
being rejected

Having a good BATNA increases your negotiating power. Therefore, it is important to

improve your BATNA whenever possible. Good negotiators know when their opponent
is desperate for an agreement. When that occurs, they will demand much more, knowing
their opponent will have to give in. If the opponent apparently has many options outside
of negotiation, however, they are likely to get many more concessions, in an effort to
keep them at the negotiating table. Thus making your BATNA as strong as possible
before negotiating, and then making that BATNA known to your opponent will
strengthen your negotiating position.
"The reason you negotiate is to produce something better than the results you can obtain
without negotiating. What are those results? What is that alternative? What is your
BATNA -- your Best Alternative To a Negotiated Agreement? That is the standard
against which any proposed agreement should be measured." –
Determining Your BATNA
BATNAs are not always readily apparent. Fisher and Ury outline a simple process for
determining your BATNA:
1. develop a list of actions you might conceivably take if no agreement is reached;
2. improve some of the more promising ideas and convert them into practical options;
and
3. select, tentatively, the one option that seems best.[4]
BATNAs may be determined for any negotiation situation, whether it be a relatively
simple task such as finding a job or a complex problem such as a heated environmental
conflict or a protracted ethnic conflict.
Fisher and Ury offer a job search as a basic example of how to determine a BATNA. If
you do not receive an attractive job offer by the end of the month from Company X, what
will you do? Inventing options is the first step to determining your BATNA. Should you
take a different job? Look in another city? Go back to school? If the offer you are waiting
for is in New York, but you had also considered Denver, then try to turn that other
interest into a job offer there, too. With a job offer on the table in Denver, you will be
better equipped to assess the New York offer when it is made. Lastly, you must choose
your best alternative option in case you do not reach an agreement with the New York
company. Which of your realistic options would you really want to pursue if you do not
get the job offer in New York?
More complex situations require the consideration of a broader range of factors and
possibilities. For example, a community discovers that its water is being polluted by the
discharges of a nearby factory. Community leaders first attempt to negotiate a cleanup
plan with the company, but the business refuses to voluntarily agree on a plan of action
that the community is satisfied with. In such a case, what are the community's options for
trying to resolve this situation?
They could possibly sue the business based on stipulations of the Clean Water Act.
They could contact the Environmental Protection Agency and see what sort of authority
that agency has over such a situation.
They could lobby the state legislature to develop and implement more stringent
regulations on polluting factories.
The community could wage a public education campaign and inform citizens of the
problem. Such education could lead voters to support more environmentally minded
candidates in the future who would support new laws to correct problems like this one.
In weighing these various alternatives to see which is "best," the community members
must consider a variety of factors.
Which is most affordable and feasible?
Which will have the most impact in the shortest amount of time?
If they succeed in closing down the plant, how many people will lose their jobs?
These types of questions must be answered for each alternative before a BATNA can be
determined in a complex environmental dispute such as this one.
BATNAs and the Other Side
At the same time you are determining your BATNA, you should also consider the
alternatives available to the other side. Sometimes they may be overly optimistic about
what their options are. The more you can learn about their options, the better prepared
you will be for negotiation. You will be able to develop a more realistic view of what the
outcomes may be and what offers are reasonable.
There are also a few things to keep in mind about revealing your BATNA to your
adversary. Although Fisher and Ury do not advise secrecy in their discussions of
BATNAs, according to McCarthy, "one should not reveal one's BATNA unless it is
better than the other side thinks it is."[5] But since you may not know what the other side
thinks, you could reveal more than you should. If your BATNA turns out to be worse
than the opponent thinks it is, then revealing it will weaken your stance.
Importance of batna
BATNA is the acronym for Best Alternative To a Negotiated Agreement. If you look at it
from the simplest standpoint, your BATNA is the choice you can make if you conclude
that negotiating with a particular party is not likely to yield a favorable result. You can
walk away from a negotiation if your BATNA is better than the likely outcome of that
negotiation.
BATNA, however, covers far more than that. One view says that BATNA is the measure
of the balance of power in a negotiation. If other parties need you in order to reach their
objectives, your BATNA is strong; your negotiating circumstances are strong. If you
want to buy a new car and the same model is for sale at several car dealers, you have a
strong BATNA because you can benefit from their competition for your business.
It is crucial to think of BATNA as having two stages in a negotiation. You start off with
your 'walking-in' BATNA; the things you can influence or control before the negotiation
begins. However, once negotiation starts, the BATNA is a dynamic element, changing as
you derive information about the interests of other parties and their constituencies and as
you compare the resources each party (including you) has available to bring about and
fulfill an agreement.
You can think of BATNA in negotiation like playing a game of cards. Your walking-in
BATNA may be the first cards you are dealt. In many card games, your hand may change
during the play as new cards are dealt to you (and others). So your BATNA changes as
new cards come into your hand. If those new cards are only known to you, you develop a
greater understanding of your own apparent strength. If the new cards are dealt to all the
players in a way that allows each player to see at least some of the cards in each player's
hand, you learn more about the comparative strength of your BATNA. In negotiation,
rather than looking at cards, we are assessing information about our own resources, those
of other negotiating parties, and the influences on each negotiator from their
[Link] looking at BATNA as an ongoing, changing measure of negotiating
strength, as a mechanism for deciding whether and/or when to quit, we develop a
disciplined, informed approach to our negotiations.