November 23, 2015
As agents, we are required to negotiate frequently as a natural course of doing business.
We negotiate every day of our lives with clients, prospects, underwriters,marketing reps, and Agency personnel.
We negotiate on everything from rates to coverage, and from services to deadlines. We also negotiate internally with agency staff to get what we need to win and keep business.If you are like me, they didn’t offer electives on negotiation in college, and you’ve probably never received any formal training or education on negotiation. Most of us have learned basic negotiation skills from the school of hard knocks. The education process has been difficult, frustrating and costly.
Negotiation has been elevated to an art form by guys like Trump and has taken on an almost mystical status. All of these factors, real or imagined have transformed negotiation from a learn-able skill that applies the disciplines of preparation, positioning and strategy into
a “secret discipline” that is understood by only the astute few. Most of us enter negotiations with a pit in our stomach and this hesitancy and fear typically results in poor outcomes. Embracing negotiation, as an effective tool and a learn able skill will significantly improve results, revenue and relationships. Let’s devote a few minutes to review some key concepts and the universal laws of good negotiation.
First: Never enter negotiation without preparation. The preparation Process involves understanding the position and interest of the other party, and then establishing an approach that makes them feel that they are winning or at least not losing. This involves asking questions, taking notes and dis- engaging to prepare.
ALWAYS disengage; think about it, plan, and reengage.
Second: Don’t negotiate too soon. We often give away much more than we need to by negotiating before we’ve been asked to give anything. Understand, that an objection or concern does not require that we go into negotiation mode and begin to give ground.
Last: Don’t lead with price. Always begin negotiation by understanding what it is the other party is wanting, and explore options and alternatives other than price to bring more value, vs. committing to price concessions. The goal is to create an atmosphere of cooperation and a feeling on the part of both sides that we are working together for a win/win solution.
Always start by evaluating potential outcomes, and what each looks like. There are 3 potential outcomes to any negotiation.
Best outcome – Acceptable outcome – Walk away
The goal is always for both parties to walk away feeling like they have not given away too much. The very best way to accomplish this is through transparency and Honest Business Conversations. Honest Business Conversations lead to solutions and to partnership instead of adversarial conversations. Once we have established our objective which should be “What a win -win looks like for us” and we understand the other parties position and interest, we can effectively prepare for the negotiation session.
Key’s to preparation are:
Knowing what win – win looks like – Knowing what a lose looks like for us – Knowing what concessions we are prepared to offer, and what they are worth. – Knowing when to walk away
Anticipation of issues and concerns helps us prepare effective solutions. Anticipation of objections helps us prepare value propositions that lead to more effective, constructive conversations. Think through the potential issues, concerns and objections you uncovered and then think through options and approaches that address issues and objections.
• Introduce considerations
• Use Value Propositions
• Give and take
Books on negotiation:
Getting to yes – Fisher, Ury
Getting More: Diamond
Difficult Conversations: Stone, Patton, and Fisher
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