Do you make these 6 Sales Negotiation Mistakes?

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In Spain, Catalonia’s recent negotiation fumbles offers lessons for business negotiators, and other secessionists, such as California and Scotland. As a Negotiation Expert trainer, I want for sales negotiators to take the lessons from Catalonia into their business negotiations.

Lesson 1: Who

A sales negotiator’s first preparation lesson is to understand ‘who’ they are negotiating with. The Catalonian leader, Puigdemont, somehow didn’t anticipate the responses from the leader in Madrid.

The Spanish leader, Rajoy, exhibits two negotiation styles, competitive and avoiding. This means that Rajoy avoids negotiating, and either makes concessions only when forced to, or he resorts to bullying. The world paid attention when Catalonians cast their referendum ballots, since we were outraged by scenes of Rajoy’s police beating up peaceful Catalonians. Catalonia’s negotiation position was bolstered as a result of Rajoy’s overly competitive or bullying style.

Puigdemont squandered this advantage by moving too fast, and not thinking through what Spain’s response might be.

Entrepreneurs and salespeople on our courses who thought they negotiated skilfully confess they are usually too eager to move into selling their products and services. Most who are successful in the sales role long-term train themselves to first invest more time deepening their understanding of their client or customer.

Lesson 2: Why

The second sales negotiation preparation lesson is to understand negotiators’ prime motivations, and from there to choose goals. The Catalonian referendum was for independence – not more autonomy, not more money. This ambitious opening position was the best choice to take against Rajoy, since Rajoy’s style is competitive and the goal of independence is out of the question for Rajoy. We’re left wondering: was independence a smart position designed to gain leverage, or was independence also the underlying motivation for the people of Catalonia?

Most business people starting negotiation courses quickly realise they don’t know enough about the other side’s real motivations. The way to understand the real motivations is to figure out what really drives both negotiators. So sales pros should write out all important questions before the call or meeting, and then invest all their energy into listening.

Lesson 3: Leverage Power

The third lesson in preparing for your sales negotiation is to understand the power and leverage of all negotiators. Secessionist movements share one thing in common: they pay more than they receive. At the time of their referendum, Scotland enjoyed leverage from the much higher revenue earned from North Sea oil. California’s 40 million population would make for the world’s 8th biggest economy (standing between France and Mexico). Catalonia’s annual GDP at $256 billion is significantly larger than that of either Portugal or Greece.

Businesses should pay closer attention to what percentage of spend (for the buyer) or revenue (for the seller) their relationship is comprised of. We teach sellers on our negotiation seminars that if the buyer spends 20% of their budget with the seller, but the buyer’s share of the sellers’ revenue is only 5%, then the seller enjoys a negotiation advantage.

So figure out who has the greater leverage in your more-important business relationships.

Lesson 4: Goal

The fourth lesson in sales negotiation preparation is to never lose sight of your real goal, no matter what position you’re taking. Catalonia’s economic size gave clout to Puigdemont’s isolationist negotiation position. Yet if a referendum were to offer voters the choice between independence, more autonomy with more money, or the status quo, polls show Catalonian voters would highly likely have gone for the middle more money option. So did Puigdemont confuse his opening goal or position of independence with his electorate’s underlying motivation for more money? Had Puigdemont’s finger been on the pulse of his electorate, it’s likely his government would right now be negotiating for even more money and autonomy from Madrid.

We ask our sales negotiation course participants whether their main goal is revenue, margin, profit, or market share. Their leaders and business owners are very often shocked when they learn that they aren’t aligned on these most important strategic sales goals. Sales professionals almost always prioritise the goal they’re paid most for.

Lesson 5: Alignment

The fifth lesson in sales negotiation preparation is to both assess and then build your negotiation alignment and support. Both Rajoy and Puigdemont’s governments have weak mandates, since neither came to power with a clear majority of voters. This creates an uncertain future for both, requiring them to more carefully plan each step.

If independence was the real goal for Catalonia, they simply were not prepared. Catalonia needed to wait to further build support.

Sellers often rush to meet the buyer before they’re sufficiently aligned. Before kicking off important sales negotiations, first make sure there is alignment with managers and colleagues. Without alignment, the buyer could undermine your offer with a phone call to your office.

Lesson 6: Follow Through

The sixth sales negotiation preparation lesson is never over-promise or threaten anything you’re unable to deliver on. Puigdemont’s government was still taking advice from crypto currency experts in Estonia when they announced independence. Their intention was presumably to create a Catalonian blockchain currency for circulation in the newly independent Catalonia.

Rajoy’s demonstration of his power advantage included arrest warrants for and firing of senior members of the Catalonian political team. Government workers were back at their desks rather than on strike to support the newly independent Catalonia, since families still needed to be fed, and the newly declared Catalonia wasn’t in a position to pay them.

This mistake proved fatal for the Catalonian government.

The lesson for sellers is to only promise what can be delivered, and never threaten anything they can’t carry out.

Conclusion

Business negotiators whose preparation incorporates these six negotiation success factors are far more likely to not only agree more deals, their agreements are also more likely to be more profitable, and their relationships more mutually enduring.

sharks circling.

Calum Coburn is a Negotiation Expert, having trained and consulted to many of the largest 500 companies across 35 countries. In his stories he typically shares lessons gathered supporting clients to close large and challenging deals. Calum is a training innovator at the Negotiation Experts, responsible for the creation of the breakthrough online Negotiation Sim, and online Negotiation Assessments.

Outside of negotiations, Calum’s favourite topic is social science, which he explains as the study of we weird and wonderful humans. Calum believes that learning sticks when it’s made fun, highly practical and challenging. His stories are also usually imbued with these same qualities.

To see the courses Calum delivers for The Negotiation Experts, visit: www.negotiations.com/training/