Negotiations, Influence and Your Business
Monday, December 11, 2006
You negotiate with people every day. You deal with subcontractors, suppliers, and potential clients. It's important to understand the art of negotiation - to help you provide the best solution for your clients and help you understand an unscrupulous supplier. Whenever you're persuading someone, it should always be toward a win-win for both parties. The best way to do that is to be prepared to negotiate. Psychologist Robert Cialdini wrote a book that contained his 6 Laws of Persuasion. These laws will help you be more prepared:
Law of Reciprocity
People want to repay you for doing something nice. If you give them what they want or something useful, they'll want to pay you back. If you're dealing with a supplier charging more than normal, you may want to ask for a reciprocal payback for the next time you purchase something. Or, if you give a useful calendar as a free gift to your clients they'll respond by referring you to others.
Law of Scarcity
When people cannot have something or find out it is a scarce resource, their interest is peaked. This law works not because people want to get the product or service before it's gone, it works because they realize that if others want it then it must be a good thing. If you go to your supplier because you're out of time or low on a product, the supplier has the upper hand. You have something they need. They can claim that they're running low and can charge you more. Or, if you are very busy because you have multiple jobs, a potential client who really wants your services may be willing to pay more to be made a high priority.
Law of Liking
People will believe in someone they like. They trust friends because friends are like them and feel the same way. When dealing with a potential client, it's important to build a rapport with them. Find something in common and you'll be letting them know that you're more alike than they realize. Suppliers will try to get you to like them and may use another salesmen or manager to be the one you don't like. Car salesmen do this by becoming your friend and then asking their managers for approval on a price - and they already know the answer - but pretend they're doing this because you're best friends.
Law of Authority
People believe in experts. Even if the expert is a famous person, they consider their opinions because they've been elevated based on their talents. If it's good enough for the "expert", it's good enough for them. They think they'll become more like that expert. Your supplier will tell you they have the best product or prices in town - you need to do your research to verify it. Or, if you spend more time with a potential client instead of just tossing out your price, you'll convince them you're the expert and can handle the job better than anyone.
Law of Commitment and Consistency
People want to make a commitment. Once they decide on what they like or believe - they'll stand by that decision. Even if it proves wrong. If a potential client trusts your service, they'll believe in you. One way to get customers to trust and believe in your services is to get them to agree with you. Instead of saying, "Here's how much it will cost," you could say, "You believe in the best quality materials, right? And you believe in making sure the project is done right and not just fast. True? Here's how much you'll need to invest for that level of quality and that level of care." Or, for example, your supplier may lead you to give many yes answers on a number of small questions. If the supplier gets you to agree to these small decisions, it will be easier to close you because you're already in agreement.
Law of Social Proof
People want to conform to the social norm. If you're not sure which product to buy, you'll buy the same product everyone around is buying. People are trained to do what society says. Didn't your parents ask, "If everyone jumped off the bridge, would you jump, too?" Give potential clients a long list of references and testimonials. By letting them know you’re the best person for the job, they'll trust in your ability to make them as happy as you've made others. Or, suppliers may tell you your competition buys from them, so why shop anywhere else? Follow up with your competitors to see if they’re willing to give a testimonial on those suppliers. Once you know the truth, you can use it to persuade suppliers that they need to work with you on terms that will provide a win-win situation for both parties.
RELATED POSTS:
Maintaining Personal Relationships with Clients
Top 7 Tips for Great Customer Service
Top 7 Sales Killers
Source – Cialdini, R. (1998) Influence: The Psychology of Persuasion
Law of Reciprocity
People want to repay you for doing something nice. If you give them what they want or something useful, they'll want to pay you back. If you're dealing with a supplier charging more than normal, you may want to ask for a reciprocal payback for the next time you purchase something. Or, if you give a useful calendar as a free gift to your clients they'll respond by referring you to others.
Law of Scarcity
When people cannot have something or find out it is a scarce resource, their interest is peaked. This law works not because people want to get the product or service before it's gone, it works because they realize that if others want it then it must be a good thing. If you go to your supplier because you're out of time or low on a product, the supplier has the upper hand. You have something they need. They can claim that they're running low and can charge you more. Or, if you are very busy because you have multiple jobs, a potential client who really wants your services may be willing to pay more to be made a high priority.
Law of Liking
People will believe in someone they like. They trust friends because friends are like them and feel the same way. When dealing with a potential client, it's important to build a rapport with them. Find something in common and you'll be letting them know that you're more alike than they realize. Suppliers will try to get you to like them and may use another salesmen or manager to be the one you don't like. Car salesmen do this by becoming your friend and then asking their managers for approval on a price - and they already know the answer - but pretend they're doing this because you're best friends.
Law of Authority
People believe in experts. Even if the expert is a famous person, they consider their opinions because they've been elevated based on their talents. If it's good enough for the "expert", it's good enough for them. They think they'll become more like that expert. Your supplier will tell you they have the best product or prices in town - you need to do your research to verify it. Or, if you spend more time with a potential client instead of just tossing out your price, you'll convince them you're the expert and can handle the job better than anyone.
Law of Commitment and Consistency
People want to make a commitment. Once they decide on what they like or believe - they'll stand by that decision. Even if it proves wrong. If a potential client trusts your service, they'll believe in you. One way to get customers to trust and believe in your services is to get them to agree with you. Instead of saying, "Here's how much it will cost," you could say, "You believe in the best quality materials, right? And you believe in making sure the project is done right and not just fast. True? Here's how much you'll need to invest for that level of quality and that level of care." Or, for example, your supplier may lead you to give many yes answers on a number of small questions. If the supplier gets you to agree to these small decisions, it will be easier to close you because you're already in agreement.
Law of Social Proof
People want to conform to the social norm. If you're not sure which product to buy, you'll buy the same product everyone around is buying. People are trained to do what society says. Didn't your parents ask, "If everyone jumped off the bridge, would you jump, too?" Give potential clients a long list of references and testimonials. By letting them know you’re the best person for the job, they'll trust in your ability to make them as happy as you've made others. Or, suppliers may tell you your competition buys from them, so why shop anywhere else? Follow up with your competitors to see if they’re willing to give a testimonial on those suppliers. Once you know the truth, you can use it to persuade suppliers that they need to work with you on terms that will provide a win-win situation for both parties.
RELATED POSTS:
Maintaining Personal Relationships with Clients
Top 7 Tips for Great Customer Service
Top 7 Sales Killers
Source – Cialdini, R. (1998) Influence: The Psychology of Persuasion
Labels: Negotiation, Sales Advice, Small Business Advice
