Negotiation – A Profit Strategy

Negotiation is the most important business skill we’ll ever master, yet it is often among the missing in our profits tool box. We think of labor productivity, equipment, and techniques, as our stock in trade. Certainly, all these are mandatory resources to prosper in the business, but none have the single largest impact on profits, cash flow, and long term viability as negotiation does. 

Negotiation is a mixture of business arts and sciences that works best when viewed as a set of economic principles. This cost centered philosophy rejects the price obsession that characterizes the business world. 

Negotiation is not an argument over price 

The financial reality is that a buyer will pay a higher price if it buys a lower Total Cost of Ownership (TCO). Disagree? Let’s first distinguish between price and cost from the customer’s perspective. For example, suppose you can buy one of two units priced at $750 or $500. If low price is the deciding criterion, no question, the $500 unit wins. However, if the higher priced $750 unit lasts for 2 years and the lower priced $500 unit lasts for one year; the $375 TCO of the higher priced unit clearly makes it the better buy. Lowest TCO is by definition the best value.

Quality, Service, Delivery, and Price (QSDP)

Our negotiation mission is to consistently demonstrate how our lower TCO provides better value to customers. The four elements of cost always present in our negotiations are QSDP. Any cost impact can be slotted in one of these categories. A better trained work force is Quality cost advantage. Superior warranty due to better materials and design are Service cost advantages and a better schedule due to planning and personnel cost advantages constitutes Delivery savings to the owner. 

The most frequently cited, yet most elusive goal is to remove price a bargaining point from the negotiation table. It will happen when we focus our negotiation efforts on the lowest TCO for the customer.

Hot Potato tactic  

Instead of stressing lowest TCO in the work-a-day world, we fall prey to our own lack of negotiation skill. Here is how the customer out-negotiates us with the Hot Potato tactic. He invites you to his office to “negotiate”. He makes you comfortable, shares a little small talk, then looks into your eyes while intoning insincerely, “Your Quality, Service, and Delivery are all top notch or you would not have a seat at the table – so it call comes down to Price. What can you do?”   

In one smooth maneuver, the customer has buttered you up and crammed the Hot Potato of Price down your throat. If you swallow it whole, you may convince your self that the customer appreciates your higher value and “in this Price competitive market“, you must lower your price.   

He won everything, getting the lowest cost and a lower price. Negotiation is never just a matter of Price. Furthermore, for the same reason that we do not buy heart surgery from the lowest bidder (who even compares prices), the other cost advantages of QSDP are more important. Any professional buyer knows for an absolute certainly that she can always get a lower price. He also knows that a low price often come at a high costs.   

Strategy over Tactics

The uninitiated think of negotiation as the deft application of tactics and parrying of counter tactics. Certainly, that is part of it. But the focus on TCO yields far better results for these reasons:  

1.     The customer is best served by the lowest TCO

2.     TCO puts all four cost balls in play at the same time, giving us quadruple the negotiating power

3.     Everyone knows that higher quality comes at a higher cost – just ask that cardiac surgeon

Some customers will not care about lower costs and only want low prices. You must decide if you want this type of business for what ever strategic reasons you have. There will be customers that you do not want to serve. There is nothing wrong with that and indeed everything right with it. When we delude ourselves into thinking that we need the sale, or the cash flow, or other ways we convince ourselves to take a sale at a loss, no negotiation skill will rescue us from our selves. 

Presentation Skills Training: How To Handle Difficult Questions

What’s the toughest part of business presenting to important clients and prospects? How to handle difficult questions with poise. Curious how the pros make it look so easy and natural? Find out how to handle questions under fire with complete ease.

With more and more subject matter experts presenting directly to clients and prospects, answering questions on the spot is an increasingly important issue. In my presentation skills training, this is consistently the number 1 area of concern.

Why is handling questions such a hot topic?

Many professionals like to reduce risk and control the outcomes of their work environment. When faced with unexpected, uncomfortable or difficult questions, it’s easy to feel on the spot.

Yet, we’ve all seen public speakers and professionals who seem to handle questions with ease and poise. What do they know that we don’t?

If you’re feeling fed up with formulas, tired of feeling bewildered, and ready for a solution to the question problem, read on.

1. Anticipate The Worst
What are the questions you deeply hope no one will ever ask? What are the dark holes in your facts?
What are the difficult parts in your company history?
What are the missing links in your business story?

Anticipate these questions, and it’s easier to work on your responses-before you step in the room.

2. Collaborate and Expand
When looking into all the scary questions, don’t try to come up with all of them in isolation. Ask peers. Ask people from your company who have more experience presenting. Interview colleagues to find out what questions they received in the past.

Look to colleagues outside of your work environment. While the topics differ, difficult questions have a certain commonality. You’ll be better prepared when you get a similar one tossed your way.

3. Brainstorm Solutions
Work with your team to brainstorm answers. Again, if you’re feeling stuck, the fastest way to add fluidity is to brainstorm. Other people on your team will see answers and find solutions with a fresh perspective.

4. Explore More Options
Ask a professional presentation coach to help you add to the questions you’re compiling. They are likely to notice areas that you may be unconsciously avoiding. Your presentation coach also has personal experience in coming up with questions, and responding to difficult questions on the spot.

5. Simplify Your Answers
When you’re preparing your answers to potential questions, keep it simple. This helps in two ways. First, you will remember your answer! Second, your audience will easily follow your response.

6. Practice, Practice, Practice
Practice speaking your answers. Say each one, conversationally. Adjust the words until you are comfortable and confident.

Then, practice, practice and practice some more. Rehearse alone. Practice with a peer. Answer questions, working under rapid fire, with your presentation coach. The more you practice realistic speed and real-world content, the better you’ll feel when your big moment comes.

7. Record and Review
Record your answers in front of a video camera. Yes, it’s kicking the pressure up a notch. Not many people are thrilled with how they look on video.

But the pleasure of feeling confident far outweighs the pain of seeing yourself on camera. Record your response to questions. Then, watch your practice rounds with your presentation coach. Get candid and honest feedback from your coach.

Ask her or him to help you respond more naturally, authentically and professionally. Focus on using your unique strengths to build confidence and poise for challenging question sessions.

Interested in presenting like a pro? By following these 7 simple steps, you’ll transform your skills and handle difficult questions with complete poise.

Which Is Most Important In Your Resume – Content or Presentation?

“I’m well qualified. I have extensive experience. Why does no one ever call me for an interview?”

I’m hearing this a lot these days, but I saw it in action recently at a job fair. Employers and Recruitment Agencies go to job fairs looking for qualified people, and qualified people go to job fairs to find jobs, so it should be a great place to match them up – but that isn’t always the case.

I watched people at the booths talk to candidates with interest, receive their resumes, glance at them, and put them away for filing; I even talked to a few of them. “Yes, she’s a great candidate,” the interviewer would say, “Excellent experience, but I doubt if she’ll get a call.” More questions elicited the observation that her Resume would get lost in the pile.

Like many aspects of twenty-first century life job-hunting is increasingly about presentation. Perhaps this is why older candidates with substantial experience are being passed over. Their Resume’s list solid achievements and experience, but employers wonder if they have the verve and willingness to learn the new media so that they can contribute and compete. In a world of headlines, tweets, video blogs and other technologies that focus on the brief and startling, the conventional resume is at a disadvantage.

A friend of mine conducted an experiment for me. Chrystal had formal qualifications, some experience, and was doing well at her job, but was interested in moving on. We went to a job fair in Minneapolis with two versions of her resume – her original resume and a revamped version which she was worried was ‘too flashy’ and not informative enough – and she went around the booths talking to people, and passing out one version of her Resume. In each case the original version was well-received and politely set aside, but the new version received enthusiastic responses each time she handed it over, and ultimately each of the interview calls she received came from the new version.

You may think, with Chrystal, that an eye-grabbing resume might work for creative positions, but surely not for professions like accounting or management, but the reality seems to be that it does work.

What are some of the techniques that can make your resume stand out? Graphics, Testimonials, and highlighting skills rather than qualifications. If your old resume is not bringing in calls for an interview, why not try redesigning it to include some logos and quotes today?