The Art Of Negotiating Price

The Art of Negotiation

Here’s an interesting article on the art of negotiation from The Wallstreet Journal by Mike Michalowicz. It may seem unnatural to put your quote out first, but it can anchor a negotiation and set the stage for all future discussions.
At what point in a negotiation do you show your hand? Most people believe if they know what their prospective client is thinking it will give them an advantage. So they wait to quote a price. They do their homework. They look for clues. Sometimes they just come right out and ask: “What’s your budget? Are you looking for great quality, a fast turnaround, or do you plan to go with the cheapest option? What number are you thinking of?”
Big mistake.
If you want to come out on top, use this simple shortcut: Be first. No dancing around the issue. No hemming and hawing. Just give them a number right off the bat. In doing so, you’ll set the starting point for the discussion, from which all further discussions will stem.
If you quote, say, $8,000 to complete a project, your prospective client may want to negotiate the price or other parameters of the deal, but all negotiations will start at $8,000. You may come down a bit in price, or agree to different payment or delivery terms, but if she hires you, you’ll get a number close to $8,000. On the other hand, if you wait for her to tell you she expects to pay $2,000 for a project, you may be able to negotiate an extra thousand or two, but you’re never going to get the $8,000 you feel you deserve.
Divergence is a huge time waster. If a prospect can’t—or won’t—pay a fair price, why would you spend one more second trying to land her as a client? Even if you lose the deal because your price is too high, you still come out on top because you haven’t invested much time trying to win her business.
How many times have you entered into a deal that you later regretted? When you try to read a prospect’s mind or wait for the person to reveal what he or she expects, you invariably end up doing more work at a discounted rate. How are you going to make it using this old negotiation strategy? (Hint: You won’t.)
Be first. When I started applying this negotiation shortcut, I was able to increase my prices by nearly 50% and filter out prospects who were not a good fit. No more laboring over proposals for people who couldn’t afford my services. No more playing guessing games with myself, trying to figure out what my prospects wanted. No more saying yes to low-ball deals that kept me working 100-hour weeks just to get by.
When it comes to successful negotiations, the single most important matter isn’t what your prospect is thinking. It’s how fast can you get your number on the table. The person who goes first wins. Period.

Mike Michalowicz is the author of "The Toilet Paper Entrepreneur." He is an advocate of a business philosophy by the same name, believing the greatest business successes come from underfunded, inexperienced entrepreneurs. His website is www.ToiletPaperEntrepreneur.com

Things you should know about Gen Y......

Taken from an award-winning DVD-based program titled "Awesome!" - http://bpgrp.com/training_products/preview.
• There is no consensus on the exact birth dates that define Generation Y, but the years between 1980 and 2000 are most often cited. Any way you measure, they are one of the largest generations in history accounting for about 30% of the global population.
• Although they are just now entering the workforce, they will account for almost half of all employees in the next few years.
• Gen Y is more comfortable with diversity than previous generations. They have grown up with people of many races and nationalities, speaking a multitude of languages, coming from traditional and nontraditional families.
• They are smart spenders and account for billions of dollars in purchasing power. They will soon be the dominant consumers driving the economy.
• They are the first generation in history that knows more about the technologies that are central to the economy than their parents – and many of their employers.
• They have been exposed to a wide range of activities and resources at a young age including sports, travel, music, dance, academic enrichment programs, media production tools, and advanced technologies.
• They were raised to speak their minds and don’t automatically defer to people who are older and more experienced. They expect to be judged by what they know, not how long they have known it.
• They want to make a big impact on the world and demand to be taken seriously.
• They expect balance in their lives between work and other activities. They are less likely than their elders to put career ahead of family.
• They have always lived in a world that is constantly changing. They don’t fear change – they welcome it.

Return to what I love

As the year 2009 was ending and it was harshly evident to us all that 2010 might not be any better, economy wise, I accepted a full time position with a client to weather the storm, so they say. My engagement is now over and I am back in the training, coaching and consulting arena. I'm excited to be back, and I hope you are too.

While we are not over the hump, I think the tide is finally turning on this recession. Now is an ideal time to put in place the essential educational and coaching plans that will give you and your team a head start getting out of the gate in 2011. In light of the times, and to make myself more available, more often, I have revised at my fee structure to fit your tight budgets.

I am looking forward to getting back together with you and your team to tackle the issues you face today, or to continue on paths we interrupted when the recession hit. I know that you face many more challenges, some different than in 2008. But I also know there is ongoing need for building your teams, your systems and your processes.

With most of you, our work sessions have been customized to address people development and succession planning, sales development, and business development, such as open book management. I do have available many more half and full day employee training modules. We can plan either half or full day sessions, depending on your needs.

Please drop me a note or call me to see how we might work together to make 2011 a successful year. I look forward to working with you to bring your business to the next level.

Ask yourself: "Do I have the right bus and are the right people on that bus?"

10 Ways to Stretch The 167-Hour Week

by Laura Vanderkam

Yes, we are springing forward this Sunday. That means that this week is a wee bit shorter than most. But there’s no reason it has to feel like it. Here are a few ways to get that hour back:


1.Watch an hour less of TV. Commit this week to watching only shows you love and absolutely nothing else.

2.Do one thing at a time. When you try to check email while writing an essay, it can take 15 minutes or more to get back into the swing of things. Multi-tasking eats hours. Focus until you finish and then move on.

3.Eat sandwiches for dinner. Or leftovers, or a frozen pizza, or eggs, or a quick salad. The point of family dinners is to be together, not channel Julia Child.

4.Run one less errand. You’ll survive without that extra light bulb for a few more days.

5.Lower your housekeeping standards. The house will just get dirty again, but you’ll never get that hour back. The laundry can wait another day or two.

6.Aim for good enough. The vast majority of our work doesn’t have to be done to perfection, it just has to be done.

7.Give things a home. Time spent hunting for shoes and cell phones isn’t helping anyone.

8.Realize you look great already. The difference between a 45-minute personal care routine and a 30-minute one is more than an hour per workweek.

9.If it’s possible, negotiate to work from home one day per week. Ditching the commute (and the suit) easily buys back an hour.

10.Practice saying “no.” When you don’t volunteer for something, that doesn’t mean that thing isn’t important. Indeed, it could be so important that you know you can’t give it the attention it deserves. Suggest someone who could.

How do you free up time in your schedule?

Why Boomers should listen to Gen Y

Posted by: Julia Kinslow on: September 11, 2009 http://juliakinslow.wordpress.com/
Yesterday, waiting for my lunch appointment to arrive, I watched a young man behind the counter texting to a friend between customers. My first reaction was dismay. Shortly after, I realized it is his generation who will be teaching our generation about customer relationships. A little scary? Maybe.
Reverse mentoring
It only seems scary because we’re used to an older generation assuming the mentor role in work environments. Traditionally, it’s the high-seniority professionals showing the younger, less experienced mentees the ropes.
However, if you’re of the Baby Boom Generation, you’ve probably noticed a reverse mentoring trend happening in the workplace. It’s essentially Gen Y (also known as Millennials) mentoring the well-established, more experienced workforce, as opposed to the other way around. The trend is most noticeable in professional fields where technology is an integral part of the work environment.
What Gen Y is telling us
Although no one seems to agree exactly where Gen Y starts and stops (late 1970s – late 1990s), it is a fact that it is the largest generation (approximately 80 million) to hit the American market since the Baby Boomers.
Gen Y are digital natives, meaning digital technology already existed when they were born. They can easily multi-task between searching the Internet, listening to music on their MP3, texting on their mobile phone, while TV is playing in the background.

Growing up amid a high-speed bombardment of information has produced a generation with short attention spans, no doubt. But, it has also produced a sharp generation who understand how to effectively market themselves and products using social networks.
Why Boomers should listen
Because of the emerging influence of Gen Y, it’s important we understand how they’re different in order to monetize marketing strategies in a Web 2.0 environment. When marketing to them, remember that:
1. Mobile phones are like an extension of their arm
2. They don’t care about ads, but what their friends think
3. Television is background noise; Internet TV is better
4. Social media networks equal relationship building
5. They expect work tools to mirror Web tools
6. They value work-life balance; flex-time, an ability to work from anywhere in a “fun” work environment; a need to “buy in” to an idea (aka “Generation Why?”)
An environment where everyone wins
If we can embrace the concept of reverse mentoring, and recognize the positive changes Gen Y brings to business, everyone can benefit. Boomers can learn from Gen Y’s ability to adapt quickly to changing work environments, and at how easily they give and receive feedback. Having grown up during the Enron era, they are skeptical about concepts such as company loyalty, and appear to have an almost built in expectation of company layoffs.
It’s Gen Y’s time to challenge outdated norms and create real change in an environment so everyone can win.

The Secret to Winning Back Customers

There's a difference between lost customers and dead customers. Most sales managers and salespeople don't make that distinction, but Jill Griffin does in her book Customer Winback: How to Recapture Lost Customers -- and Keep Them Loyal.
In the rush to get new business, we ignore lost business. Marketing Metrics, a Paramus, New Jersey-based consulting firm, estimates that the closing ratio for new prospects is 5 percent to 20 percent. The potential for winning back lost customers is 20 percent to 40 percent. Here are five ideas for creating your own customer win-back program:
1. Sales Management Must Drive the Win-Back Program
It's unacceptable to give the lost causes and hopeless cases to the new salesperson. Sales managers have to identify the lost list and get out of the office and visit them with their sales reps. During those meetings, sales management's job is to listen, take notes and summarize the lost customers' comments to demonstrate they are understood.
2. Establish the Measurement System for Tracking Losses and Win Backs
Sales management needs a system for identifying lost and recovered business. If you're not measuring lost customers month to month, you're not managing churn. Identifying which customers who did business with you last month are not doing business with you now is vital for beginning your win-back program. Request a free copy of a Churn Calculation Worksheet.
3. Create a Strategy for Revisiting the Lost
Your win-back strategy might include a meeting with top management, a letter from the CEO and a new needs analysis meeting. This all flows from the first face-to-face meeting where you discover the problem and refine your approach.
4. Celebrate Your Win Backs
Make sure the salesperson who wins a customer back gets recognition for that sale. What gets rewarded gets done.
5. Document Your Successes
Winning back customers is a process, and it should be a repeatable one. It may take seven steps instead of the previous four, but once you've won back several customers, you'll begin to see patterns. The last thing you should do is document the steps that work and make them part of your training program going forward.
As you can probably tell, prevention is easier than the cure. Manage customer expectations at the beginning of the relationship, not the end. Ask, "What result are you looking for in the next quarter (or appropriate time period) that will make you continue to do business with us?" Knowing the expectations at the beginning makes your life as a salesperson much easier and increases your chances of renewing a client.
It's not easy to win back lost customers. There may be some confrontation, and you will undoubtedly hear things you don't want to hear. However, it's hard to correct a problem you're not willing to discuss. According to George Walther in his book Upside Down Marketing, the easiest sources of new business are customers who got frustrated, aggravated or annoyed and can be seduced away by the competition.
So why are you sitting there reading this? Go talk to a lost customer.

The Benefits Of Getting Business Advice

You know your business, so why would you need business advice? Because you can't think of everything and a seasoned business consultant can help you move your business to further success and profitability. Whether you are selling services or products hiring a small business consultant is a good investment in the future of your business. Think of your consultant as a mentor whose goal is to help you do better and to achieve your goals. You need support while you improve your business and consultants can help with all the tasks you need to manage. Here are some areas where getting business advice can help.

Many times, moving your business to the next level depends on marketing and promotion. This can take a number of forms. An experienced consultant will have worked with a range of businesses and will know which strategies work best for what type of business. The consultant may recommend rebranding, changes to marketing material, overhauling your customer communication channels and more. Perhaps the consultant will suggest new ways of marketing yourself, such as a targeted email campaign. This business advice will not exist in a vacuum. Your consultant will review your entire business before selecting the strategies that are most appropriate for you.

Preparing For Growth
If you are preparing for expansion, then getting business advice from a consultant could help you to secure the funds you need to grow. Getting investment often depends on having a sound business plan and knowing how to present it. Your consultant can help you with forecasting and models and can use his contacts to get your plan in front of the right people. This is one reason to get business advice from someone with experience in similar business types – networking can be invaluable when you are ready to grow.

Perhaps you just need to find a way to become more efficient at managing your business. You might need advice on controlling cash flow, converting leads and enquiries to sales or setting up a web sales portal that sells your business as well as your products. All of these are areas where you may need business advice. A consultant can take an objective look at your business to see where you can save time, money or both. At the end of the process, you will have a more profitable business that is poised to dominate your chosen niche. Isn't that a great reason to pay for business advice?

Posted in March 2009 by GiztheBiz http://www.blogger.com/profile/00730143392777624619