Negotiating Outline (Media Sales and Sales Management)

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NEGOTIATING
OUTLINE
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Negotiating
Rule: Don’t negotiate until you’ve
created value and created a unique,
differential competitive advantage.
Rule: Don’t discuss price until you’re
read to negotiate and close.
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The Five Elements in the
Negotiating and Closing
Process
1.
Your Negotiating Approach
a.
Information-Based
I.
II.
III.
IV.
b.
c.
d.
Information about your customers and their
competitors
Information about your competitors
Information about the other side’s cultural
background
The attitudes and tactics of the other side
Relationship-Based
Ethical
Flexible
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2.
Preparation
a.
Assess the Situation
I.
II.
III.
IV.
Balanced concerns
Relationships
Transactions
Tacit coordination
Assess Negotiating Styles
b.
I.
II.
III.
IV.
V.
Competitors *
Accommodators
Conflict Avoiders
Problem Solvers
Cooperators *
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Rule: Match the other side’s style
(cooperative or competitive)
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Identify Interests, Set Objectives and
Determine Targets
c.
I.
II.
Identify both side’s interests.
Set MADCUD objectives (Measurable,
Attainable, Demanding, Consistent with
company goals, Under control of the
individual and Deadlined).
Rule: When selling a perishable
product, always set a deadline on your
offers.
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III.
Determine Targets
Rule: Make a commitment to your
objectives and targets, write them
down and tell someone about them.
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d.
Assess Leverage
I.
BATNAs
Rule: Always go into a negotiation
with a BATNA.
II.
Tit-for-tat
Rule: Use-tit-for-tat to teach the other
side to cooperate.
Rule: Don’t use tit-for-tat if the other
side is much more powerful. Stick to
your principles humbly. THE NEW SCHOOL
III.
Warning
Rule: Never threaten; politely warn
instead.
IV.
Bluffs
Rule: If you bluff, use a mixed strategy
and occasionally bluff on a random
basis. (bluffing is for experts only.)
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e.
Estimate the Ballpark, commit to WalkAlways and Set Anchors
I.
II.
III.
Estimate the ballpark
Determine walk-aways
Set anchors (first offer)
Rule: Most settlements are close to
the mid-point.
Rule: Always go into every negotiation
with a commitment to your walkaways.
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Rule: Always have a a well-thoughtout anchor.
Rule: During negotiations, you must
focus on your highest legitimate
expectations (HLE),not your walkaways.
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f.
Determining Bargaining Tactics
I.
II.
Acceptable: Auction, cherry-pick, crunch,
flinch, good guy/bad guy, limited authority,
nibble, price tag, red herring, silence, split
the difference, take-it-or-leave-it and
throw-aways.
Unacceptable: Big Bait, blackmail, change
of pace, deliver garbage, renege, starvation,
threats and walk-outs.
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RULE: Never split the difference when
it is in the other side’s favor or is not
close to your HLE. Have patience and
continue negotiating.
RULE: When faced with unacceptable
or unethical bargaining tactics, name
the tactics and tell the other side the
names so the other side knows you are
not fooled.
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Rule: Never respond emotionally.
Respond calmly, politely and firmly.
3.
Maneuvering for Dominance and
Control
Rule: The other side only has the
power you give it.
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a.
Tactics to get you frustrated, angered:
Interruptions, hurry-up, delay, keepyou-waiting and bring in the boss.
Rule: Check your ego at the door and
don’t let your fear or anger get the
better of you. Patience always wins.
Rule: Whoever controls the negotiating
agenda, controls the outcome.
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Rule: In order to avoid negotiating on
each element individually, package all
the elements in a deal so the prices of
the individual elements always add up
to more than the package price.
Rule: Negotiate only after you’ve
created value, early in a customer’s
planning cycle and well before your
imposed deadline.
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Rule: Negotiate at the highest level
possible – only with the buying
decision maker.
Rule: Don’t negotiate with your boss
present if you can avoid it.
Rule: Negotiate on your own turf if
possible.
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Rule: Negotiate face-to-face whenever
possible.
Rule: If you have to negotiate on the
phone, you be the caller.
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4.
Bargaining
a.
Warm-up
Rule: Listen and get information 66
percent of the time, give information
33 percent of the time.
Rule: Get the other side to state what
they want at the beginning, and tell
them what your issues are – get
everything on the table.
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b.
Open
I.
Open first?
Rule: Open first to set an anchor,
except when you don’t know the other
side.
II.
Open optimistically or realistically?
Rule: When in doubt, open
optimistically and have room to come
down.
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Rule: You never get anything you don’t
ask for, so ask for more than you hope
to get.
Rule: Get bad news out of the way
early.
Rule: Don’t include most of the other
side’s requests in your initial offer.
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c.
Frames
Rule: Always frame all of your offers
appropriately.
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Framing

Frame all of your offers.

Framing emphasizes the value of your offer.
Framing provides justification for the other side to make
concessions.

“Just pennies a day” frames an offer.


To those who like to win, frame as a gain, a win –
emphasize benefits.

For those who are afraid to lose (losses loom larger
than gains to many), frame as a possible loss –
emphasize the pain and shame of losing.
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Framing Example

Group I
1
If Program A is adopted, 200 people will be saved.
2
If Program B is adopted, 1/3 probability that all
will be saved, 2/3 probability that none will be
saved.

Group II
1
If Program A is adopted, 400 people will die.
2
If Program B is adopted, 1/3 probability that all
will be saved, 2/3 probability that none will be
saved.

76% in Group I chose Program A, only 12% in Group II
chose Program A.
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d.
Signaling Leverage
Rule: Confidence is everything;
whoever blinks first wins.
Rule: If you have leverage, use it
gently, but use it.
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e.
Making Concessions
Rule: Never begin with a major
concession.
Rule: Don’t just concede, try to trade.
If you give up something, always try to
get something in return.
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Rule: Give the first concession on an
unimportant issue, and get a
concession from the other side.
Rule: The other side’s first concession
is in its least important area.
Rule: Make the other side work hard
for everything, they will appreciate it
more.
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I.
Develop an effective concession pattern that
signals when you get close to your walkaway.
Which tactic is best?
1. 25%
2.
0
3.
0
4. 100%
5. 10%
6. 30%
25%
50 %
0
0
20%
20%
25%
0
0
0
30%
10%
25%
50%
100%
0
40%
5%
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f.
Building Agreement
Rule: Summarize agreements and
restate the other side’s position on a
regular basis.
Rule: Be patient – with patience and
hard work in exploring alternatives,
you can make the deal better for both
sides.
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II.
Closing and Gaining Commitment
Rule: Expect to close.
Rule: When you walk-away, always
leave the door open.
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A.
Trial Closes: The Direct Close, the
Assumption Close, the Summary Close,
the Silent Close, the Pin-Down Close
and the T-Account Close.
Rule: Use trial closes throughout the
negotiating process.
B.
Choice Closes: The Choice Close and
the Minor Point Close.
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C.
D.
E.
Clincher Close (have a concession in
your back pocket and use it at the end
to clinch the deal).
Last-Resort Closes: The “Make-Me-AnOffer” Close, the “What-Will-It-Take”
Close and the “What-Did-I-Do-Wrong”
Close.
Bad, Never-Use Closes: The Poor-Me
Close, Now-You-See-It-Now-You-Don’t
Close and the For-You-Only Close.
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Rule: Don’t close too aggressively;
always keep the relationship in mind.
Rule: When closing, confidence is vital
– you cannot signal your fear of losing
or your need to close fast.
Rule: Have confidence that you can
give the other side a “good deal” –
their definition of a good deal.
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Confidence Gives You Power

Have confidence that the buyer will never be
forgiven for not asking for a lower price (or
better deal), but will always be forgiven for
not getting it.

Recognizing negotiating tactics gives you
confidence.

Accuse the other side of not being fair – flinch
– gives you confidence

Take reasonable risks – equate risk with a
positive outcome.
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F.
Types of Good Deals:










Got a low price
Got something someone else wanted
Got high quality and a low price
Got the last one
Got a warranty or guarantee
Low risk of dissatisfaction
Got a discount
Got something else thrown in
Got good results from advertising
Got a good deal compared to other media
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G.
Get Commitment:




Social Ritual
Public Announcement
Accountability (contract)
Simultaneous Exchange
Rule: Once you get commitment, say
”thank you,” shut up and leave quickly.
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III.
Putting It All Together: Creating a
Negotiating and Closing Plan
Rule: Always rehearse your
negotiating and closing plan.
Rule: After every negotiating, debrief.
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Further Study

Read Media Selling, 4th edition, Chapter 12
(“Negotiating and Closing”) available at


Download, read and study the “Negotiating
and Closing Outline” available at


www.charleswarner.us/media_selling.html
www.charleswarner.us/indexppr.html.
Download, read and study the “Negotiating
Styles and Patterns” available at

www.charleswarner.us/artindex.html
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