Before going into negotiation, buyers should bring with them history cards of prior purchases of the same or similar goods or services. Such history is most useful when it lists the prices paid, quantities bought, who negotiated, and problems encountered by the buyer in the course of the seller’s performance.
The salesperson can also use history wisely. For example, good current references build credibility. It is amazing how many sellers provide the names of references who have died or are no longer in business. Some are even careless enough to provide references from dissatisfied customers.
A salesperson who maintains a history of relations with the customer and their customized needs can better deal with a buyer’s arguments during negotiation. By knowing past prices paid, quantities ordered, promises fulfilled, special favors rendered and payments made late by the buyer, the seller can handle the negotiation in a more assertive and intelligent way.
A salesperson smart enough to take notes about a buyer’s tactics during a negotiation is in a better position to deal with the buyer’s bargaining style the next time. Armed with this history, the seller can anticipate the other party’s demands and concession pattern as well as what they will do as they move toward agreement.
Yogi Berra once said, “It’s hard to make predictions. Especially about the future.” Despite that, the sales manager who asks her salespeople how the buyer negotiated last time and insists on written history files of past bargaining will get better results in future dealings.
Another type of backup to support your position and reach for the high ground is guiding logic or concepts. It’s hard for me to negotiate against anyone who is very logical. My problem is that when the other party is logical, I find myself guided by the power of their reasoning. I tend to go along, even when I don’t want to. They gain the initiative and move me in their direction.
A salesman attending one of our seminars told me a story about a price negotiation with an angry buyer. The seller’s company policy was to charge on a per unit basis depending on the size of the order. For example, one to 12 units were $100 each; 13 to 24 units were $90 each; and 25 or more were $80 each. Lower prices for larger quantities makes sense.
The customer was angry because the salesperson had quoted $90 each on 17 units ordered in accordance with the price list. He insisted that the price should be $80 because this was the third order in two months-prior purchases were 23 units and 35 units at list price. “Now,” said the buyer, “I won’t pay more than $80. It’s not fair or logical. I’ve given you two orders for 58 units and here’s 17 more for a total of 75 in two months. You’re ripping me off at $90 each for the 17 I now want.”
The buyer’s logic was good and the seller responded by looking at the price structure, averaging the three orders, and giving the customer the $80 price. Furthermore, the practice of averaging orders over a three month period became the company policy. Logical negotiators, like this determined customer, find it easier to persuade others.