A commercial negotiation is a discussion between a buyer and a seller to conclude a sales agreement. It allows sellers to address the buyer’s concerns about a purchase. It seeks to restore the value of the product or service by making compromises. If successful, it leads to the sale of a product or service.
You wish to join
an INSEEC program?
You wish to have some
more information about a program?
What is negotiation?
Negotiation is a process of reaching a compromise or agreement while avoiding disputes and differences to achieve the best possible outcome for their position.
Negotiation is an interactive process between two or more parties or negotiators. They seek to find common ground on issues of common concern. The goal is to reach a mutually acceptable agreement that will be respected by all. The principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome.
In a business-to-consumer (B2C) relationship, negotiation is very different from marketing and sales. The main difference is that marketing is about making the product, service or company known. Selling is about convincing the other person to buy the product or service. Negotiation normally follows sales and sales follows marketing.
Negotiation is the key to making progress in the workplace, resolving conflicts and creating value in contracts. It can help foster collaboration, which strengthens the bond between the marketer and the customer. For an effective negotiation, the marketer must listen carefully. Effective listening allows you to identify the client’s needs.
When negotiating a marketing contract, a marketer asks pertinent questions. This allows us to determine the results desired by the client. Clarifying needs also allows the marketer to provide quality solutions.
A marketer with strong communication skills also gains a more detailed view of the customer’s needs. He is therefore able to create customized solutions to increase customer satisfaction. The marketing manager is also able to correct any doubts the customer may have.
Strong negotiation skills are helpful in discussing prices with suppliers. You can increase your profits by reducing purchasing costs. This can include media buying, sponsored posts, ad buying, etc.
What are the different types of negotiations?
Negotiation styles or behaviors are modes of communication used in a negotiation situation to achieve a desirable outcome. There are five main negotiation styles:
- and compromise.
A successful negotiation often involves one or more of these different negotiation styles. A multi-party approach is a type of agreement in which more than two parties seek to reach an agreement. An example of a multi-party negotiation is the negotiation between several department heads in a large company.
In a team negotiation, several people negotiate an agreement. Team negotiations are common in large commercial contracts. There are several personality roles in a negotiation team. In some cases, a person may play more than one role.
Interest-based negotiation uses the principles and interests of the parties to reach an agreement. This type of negotiation often focuses on conflict resolution. It is based on an integrative cooperation approach to serve the interests of both parties.
Positional negotiation is about making your position clear from the start. Then you defend this position against the attack. She may not consider the other party’s interests or see what she is getting at. This one is not considered very productive.
Distributive bargaining is where two parties negotiate over a single product or issue, such as price.
What is the sale?
Selling is about persuading a prospect to buy a product or service. A typical sales transaction involves the seller communicating the value and appeal of their solutions to persuade a potential buyer.
The practical definition of selling may vary depending on the industry, the customers you sell to and the sales approach you use.Selling is about developing and maintaining positive, ongoing relationships. Negotiation can be a one-time issue that arises only at the beginning of a new relationship.
What is the difference between selling and negotiating?
First, selling is about giving value to your offer. Negotiation is when you engage in a dialogue with your client. The goal is to reach an agreement on the terms under which you will provide the product or service. This means that both parties must be willing to enter into an agreement. They both have a mandate to change conditions.
Selling is a process by which the seller identifies how the proposed solutions meet the buyer’s needs. Negotiation, on the other hand, is the process by which both parties agree on the terms of an agreement.
Check out our trade FAQ’s here to learn more.
How to combine negotiation and sales for business development?
Sales negotiation is one of the most stressful and potentially anxiety-provoking elements of selling. Each involves significant preparation, empathy, insight and a willingness to compromise strategically.
Coolness is essential in negotiations. If you get upset or frustrated, you may turn off your potential customers. When negotiating with your customers, you can choose a hard or soft sell approach.
Your choice depends on several factors such as product type and sales priorities. Sales negotiation training can teach you when to use the hard sell or soft sell approach.
How to become a sales and negotiation professional?
There are two main ways to become an expert negotiator and salesperson:
– field experience. Try, make mistakes, fail, try again, succeed. And this many times in order to improve.
– take a training course in sales or customer marketing. INSEEC offers many specialized sales training courses. In addition, the negotiation and sales module is part of the mandatory common base for all courses, regardless of their specialization.
You can follow a sandwich course at the INSEEC business school for learn how to optimize a sales negotiation and thus merge the two ways: theory and practice.Updated 22 May 2023