A poor negotiator will never become a successful entrepreneur. It’s that simple. So if you buckle too easily you need to fix it – and fast. It doesn’t matter if you’re negotiating with a customer, a supplier or a potential employee. The key is to remember you’re taking part in a conversation, not a high-stakes battle of wills. Let’s take an example. Asking for more money from a client can be difficult – no one wants to overpay – but it becomes much easier when you frame it in the right way. Do this by explaining it’s the amount you need in order to provide the best possible service. If you don’t get that you can’t do the job to the high standards you set yourself or deliver the service your customers have a right to expect. That is the basis for a constructive discussion. And while you’re negotiating, keep reminding yourself that if a competitor is offering a lower price than you they are either doing something you’re not or (more likely) they are losing money.
If I get an email from an unhappy customer and they’ve put their telephone number on there I will phone them literally within five minutes. They are often amazed to hear from me. Find out what went wrong and why it went wrong. It’s not true that the customer is always right, but it is true that you have to deal with the customer in the right way. Listen to what they tell you and respond by saying: “I’m sorry you’ve had this experience”. The real problems always start when people hide things. Tell them the truth. Be honest with them. If you turn an unhappy customer into a happy one, they are far more likely to recommend you than a customer who has never had cause to complain. If you deal with them respectfully, they can become one of your most effective salespeople.
I’ve already set out how to negotiate with
customers. When the shoe is on the other foot and I’m trying to
negotiate a better price from suppliers, I have a structure I always
follow. First of all, remind the supplier about the vision you have for
your company and get them excited about it. This is something too many
business people overlook. If a supplier buys in
to your idea and believes you will achieve it, they are far more likely to be supportive. That is the first thing you need to get across. A lot of the time a supplier will say something like this: “OK, because you’re new we are going to start you at this price. But as you do more we’ll charge you a different price”. In other words: the more business you put our way, the less we’ll charge you. It sounds reasonable enough, doesn’t it? It isn’t. Ultimately, people are buying their product through your company. So if they are supplying someone else at a lower price they’re putting you at a competitive disadvantage. It is fine to point this out as I’ve done so many times. After thirty years in business, I now know the most effective line to use with suppliers. I always start by asking a simple question: “If I was your biggest customer; what is the best deal you could possibly do? What’s the best price? Give me a range – best price to worst price”. Politely insist on an answer. And when it comes, say: “The only way I can do this is if you give me the first price”. It sounds straightforward. But I’ve done this so many times – and it works.