MGT4212 Sales Negotiation Week 2

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Questions and Answers

What are the 8 key steps in an ideal negotiation process for sales?

Preparation planning, relationship building, stating goals and objectives, starting the negotiation, understanding the compromise or disagreement, reach an agreement or deadlock, confirm the sales agreement and its terms, commitment and follow-up

What does ZOPA stand for in a sales negotiation?

Zone of Possible Agreement (correct)

Zone of Professional Agreement

Zone of Patience and Agreement

Zone of Positive Approach

What does BATNA stand for?

Best Alternative to a Negotiated Agreement

BATNA is the _____ that will be chosen if you do not reach an agreement.

option Signup and view all the answers

Prioritization and flexibility are key strategies in preparing for a sales negotiation.

True Signup and view all the answers

What is the primary goal of active listening?

To understand positions and interests Signup and view all the answers

What is an example of rephrasing information?

Expressing the speaker's message in your own words Signup and view all the answers

What is the purpose of clarifying information?

To ensure a clear understanding of the information Signup and view all the answers

What is an example of repeating information?

Repeating the speaker's message with the same words Signup and view all the answers

What is a key aspect of active listening?

Staying silent until the speaker responds Signup and view all the answers

What is the benefit of active listening?

To understand the speaker's positions and interests Signup and view all the answers

What type of question is NOT suitable for active listening?

Leading question Signup and view all the answers

What is NOT a characteristic of active listening?

Interrupting the speaker Signup and view all the answers

What is an important aspect to consider when engaging in written sales negotiations?

Using simple terms Signup and view all the answers

Why is it important to clearly describe information with titles in written sales negotiations?

To help the reader quickly understand the content Signup and view all the answers

What should be avoided when communicating via email in sales negotiations?

Using emojis Signup and view all the answers

What is an important consideration when using email in sales negotiations?

Using it as a complement to phone or face-to-face interactions Signup and view all the answers

What should be learned about customers or buyers in sales email communications?

Their communication preferences Signup and view all the answers

What is an example of effective email communication in sales negotiations?

I want to buy 25000 units of Christmas wreaths at $15.20 each, with a margin of 45%. Signup and view all the answers

Why is it important to avoid sending long email messages or large attachments in sales negotiations?

To avoid overwhelming the recipient Signup and view all the answers

What tone should be avoided when negotiating by email?

Intimate tone Signup and view all the answers

What should be considered when setting a delivery date for a seasonal item?

The potential impact on sales and markdowns Signup and view all the answers

What should you include in the subject line of an email to a buyer?

A descriptive title and target date of completion Signup and view all the answers

What is the goal of an effective email in a sales negotiation?

To achieve confirmation for the sales deal Signup and view all the answers

Why is it important to stay focused in an email to a buyer?

Because buyers have limited time Signup and view all the answers

What should you avoid in an email to a buyer?

Overusing politeness Signup and view all the answers

What can be used to read nonverbal messages from a customer?

Facial expressions and body language Signup and view all the answers

What is the purpose of enlisting terms of negotiation in an email?

To clarify the terms and requirements Signup and view all the answers

What should you do when writing an email to a new or old customer?

Adapt your approach to the customer's standing Signup and view all the answers

What does a back-and-forth body movement indicate about a customer's outlook?

Positive outlook Signup and view all the answers

What does intense eye contact for more than three seconds indicate?

Displeasure Signup and view all the answers

What does a customer's body leaning back or away indicate?

Boredom, apprehension, or possibly anger Signup and view all the answers

What does a customer's gaze to the right indicate?

Logic and facts in the conversation Signup and view all the answers

What does a customer's body movements directed towards a person indicate?

Positive regard for the salesperson Signup and view all the answers

What does a customer's staring indicate?

Coldness, anger, or dislike Signup and view all the answers

What is the primary focus of collaborative negotiations?

Achieving a mutually beneficial solution Signup and view all the answers

What is the purpose of analyzing the customer in advance of a negotiation?

To understand their drivers and market position Signup and view all the answers

What is the primary goal of probing in a negotiation?

To identify the other party's interests Signup and view all the answers

What is the difference between positions and interests in a negotiation?

Positions are demands, while interests are underlying needs Signup and view all the answers

What is the purpose of exploring alternatives in a collaborative negotiation?

To explore options that meet the interests of both parties Signup and view all the answers

Why is it important to understand the other party's interests in a negotiation?

To satisfy their needs and build trust Signup and view all the answers

What is the key to effective communication in a negotiation?

Sharing information and exploring options Signup and view all the answers

What is the outcome of a collaborative negotiation?

A mutually beneficial solution Signup and view all the answers

Study Notes

Planning a Sales Negotiation

There are 8 key steps to an ideal negotiation process: preparation planning, relationship building, stating goals and objectives, starting the negotiation, understanding the compromise or disagreement, reaching an agreement or deadlock, confirming the sales agreement and its terms, and commitment and follow-up.

Preparation

Always be prepared for a negotiation and base expectations on solid information.
Research as much as possible before the negotiation to understand what information the counterpart will bring and prepare for possible outcomes.
Set up an agenda of the topics to be discussed and prepare information and desired outcome in writing (goals, terms, and timing).
Identify the Zone of Possible Agreement (ZOPA) and alternative positions (A and B).

Sales Goals and Objectives

Set SMART goals: specific, measurable, achievable, realistic, and time-bound.
Prioritize goals and objectives, understanding their importance and value.
Keep strategy flexible, knowing and preparing options (BATNA) before the negotiation.

BATNA (Best Alternative to a Negotiated Agreement)

BATNA is the alternative to a negotiated agreement if a deal is not reached.
It is the option that will be chosen if no agreement is reached – your Plan B.
Consider alternatives in the negotiation process to understand what to do if no agreement is reached.

Bargaining Mix

The bargaining mix is the combined list of issues from each party.
Be sure about the objectives and bargaining mix to gain confidence and an advantage in the negotiation process.

Preparation Questionnaire

Use a preparation questionnaire to assess BATNA and prepare for the negotiation.

Collaborative Negotiations

In collaborative negotiations, parties work together to achieve a mutually beneficial solution
Focus is on building trust, sharing information, exploring options, and creating value
Key aspects:
- Analyze the customer/vendor in advance
- Prepare by having a BATNA (Best Alternative To a Negotiated Agreement)
- Probe in the negotiation to understand what is crucial to close the deal
- Address requirements and objections to get a fair proposal/sales deal for both parties

Understanding the Other Party

Two key aspects to understand in negotiation:
- Positions: demands, offers, and other statements made by negotiators
- Interests: underlying needs, objectives, fears, and ambitions

Active Listening

Active listening helps understand positions and interests
Techniques:
- Repeating information to show understanding and encourage further communication
- Restating or rephrasing information to ensure comprehension
- Clarifying information to ensure clear understanding
Tips:
- Ask short, non-judgmental, and non-leading open-ended questions
- Avoid distractions and exhibit careful listening body language

Written Communication

Sales negotiations in writing should:
- Use simple terms
- Clearly describe and title information
- Be aware of tone and manner, as it sounds different in writing
- Consider text limitations for some formats
Elements to include:
- Offers and counteroffers to convey details and motives
- Information about alternatives to confer an advantage

Email Communication

Key aspects:
- Use proper capitalization and punctuation
- Avoid using emojis
- Avoid sending long emails or large attachments
- Respond quickly to important emails
- Use effective email openings and subject lines
- Right tone: immediacy is different from intimacy
- Avoid using emails and texts to deliver bad news or resolve critical issues
Example of an effective email:
- Clear and concise on the request and preferences
- Includes information about alternatives and BATNA
Guidelines for effective negotiation emails:
- See document: Guidelines for Effective Negotiation Emails

Non-Verbal Communication

Nonverbal messages can be read based on the customer's:
- Body angle
- Facial expressions
- Arm movements
- Hand gestures
- Placement of the legs
- Body language patterns
Interpreting body language:
- Body angle and movements can indicate positive outlook, insecurity, or boredom
- Facial expressions can indicate interest, expectation, concern, or disapproval

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Description

This quiz covers the planning process for a sales negotiation, including goal-setting and offer preparation. Learn how to prepare relevant documentation and information for a successful sales negotiation.