Negotiating your price

For many of us, negotiation is one of the hardest and most misunderstood tasks that any tax and accounting professional is called to do. Just the word can bring fear, sweats, heart palpitations, dry mouth, and a desire to run. Why do we feel this way? We may lose the deal. Waste our time. Get in an agreement with someone we shouldn’t have gotten into a deal with. That’s never happened to anyone here, has it?

Successful negotiations are where everyone feels – yes, feels – their needs are met and the right thing was done. The only bad negotiations are when one side – rightly or wrongly – feel the other was taking advantage of them.

Negotiation is not about dollars and cents. It is about only one thing: human Interaction. Negotiation is the process where two or more people who perceive a difference in interests or perspective attempt to reach an agreement.

In “Thinking Fast and Slow” Daniel Kahneman suggests that our brain operates in two systems. System 1 is fast, instinctive, and emotional, while System 2 is slower, more deliberative, and more logical. Understanding these two systems is important to negotiations because we have to use System 1 to get to System 2.

We believe when we present a logical, reasonable, and fair offer, prospects will say yes, so why don’t they? There are forces at work you may not be aware of; good negotiators know they must be ready for surprises. Great negotiators use their skills to reveal the surprises that are certain to exist.

How many of you had clients come to you for whatever reason, and you gave them all the logical reasons to use you. Every obstacle was solved, yet nothing happened? Why? Emotions are driving them. Logic is not. This is what we must learn to work with. All the reasoning you provide just will not work.

What will work? Listening, understanding, and seeing things from their point of view. Establish rapport, calm them down, gain their trust, learn their needs, and use empathy to negotiate your prices and services.

Your job at this point is to establish two things: trust and competency. How do you do this? By actively listening.

• Hear what they are saying. 
• Ask questions to uncover more information. 
• Look at them. 
• Smile.

In “Never Split the Difference: Negotiating as If Your Life Depended on It,” Chris Voss and Tahi Raz emphasize two techniques: mirroring and labeling.

• Mirroring is simply repeating what someone just said. It creates more reception from the other side, focuses attention, and gives your prospects an opportunity to dial in more with you and you to dial in more with them. It causes an almost completely unconscious response for the person to want to go on.
• Conversely, labeling is identifying the emotions that you are seeing. You need to separate people from the problem; the thinking being that emotions are an obstacle to a positive outcome.

Another great technique so prospects feel safe and secure is saying “no.” Next time you are on a sales call, pay attention to what the salesperson is saying. Chances are they are asking questions to get you to say “yes.” How do you feel? If you’re anything like me, you want to get away! Now, turn it around and ask “no” questions. You will feel entirely different. You will feel in control. Safe. That’s how you want your prospects to feel.

How do you ask “no” questions? It takes practice. Instead of asking, “Do you agree,” ask “Do you disagree?” Instead of asking, “Does this work for you?,” try asking, “Is this a bad idea?” We are so addicted to “yes,” that flipping the words for a “no” response does feel unnatural – but it works.

A negotiation strategy to be aware of is loss aversion. People will choose not to lose something over the possibility of gaining something. We all do this. Look around your house. Are you holding on to things you don’t want to lose, even though in getting rid of them, you’ll gain space in your house? Prospects are the same. People work harder to avoid losses than to attain gains.

The next time you talk with a prospect, let them know what they will lose by not working with you versus what they will gain. Again, this take practice and a total flip of your thinking, but you can do it!

These are just some of the techniques and theories of negotiations. Once your prospects feel safe and secure, in control, and realize what they will lose by not working with you, you will sign more business. The best part? You will both be happy with the results.

 

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