Networking in Berkshire - Business Event Details

RyBlog: Average Negotiators Pay the Price

Every business survives on two skills, sales and negotiation.

Most company owners and managers invest heavily in their sales force and in so why does negotiation skills training get so neglected?

It’s simple, whether we learn from coaching, formal training or from the hard knocks school of life; we all believe we are great negotiators. We are not and it’s costing you money!

When I look at the thousands of negotiations I have been involved in over the years I am always amazed at the basic mistakes made by even the most experience executives. Bad habits abound and most that are made are only just effective rather than exceptional or outstanding.

I have found seven deadly sins:

  1. Not preparing properly… Failing to identify your best alternative to negotiated agreement or miscalculating the zone for potential agreement and not re-evaluating during the negotiation process.
  2. Discussing positions rather than interests without considering the bigger picture.
  3. Neglecting the other party’s interests especially by talking but not listen.
  4. Letting price rule the negotiation when there are many others variables which add value.
  5. Making the first offer when you were not in a strong position to do so or making a first offer that was not sufficiently aggressive.
  6. Making incorrect assumptions about the other party.
  7. Making greater concessions than the other party did.

There are unlimited opportunities for smaller errors when negotiating such as inadvertently disrespecting the other party, poorly timing disclosure of information, negotiating with the wrong person or just annoying the other party. Each one of these errors erodes the quality of the agreement you reach. Most deals are average because the negotiation is average.

We have researched the effect of poor negotiation on profits and what I found was amazing, even when the people involved thought they were making good deals.

The results:

  • Average sales negotiation loses on average 16% of sales volumes.
  • Customers pay 8% less on average than they are prepared to pay because of average sales negotiation.
  • Average buying negotiation means businesses pay on average 6% more than they need to.
  • Businesses pay on average 4% more then they need to for indirect costs due to average general business negotiations.

The failure to negotiate effectively on a £15,000 sale for 1,000 units would result in £2,978 loss of profit and a net margin reduced from 30% to 18%.

You can double your profits if your staff know how to negotiate effectively.

More and more companies are getting negotiation skills training. Your business needs negotiation skills because your customers and suppliers are getting them… don’t get left behind, Ryboc offers the Most effective Negotiation Skills Training to all staff who negotiate in your buisness!

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