This is an excerpt from the book The Power of NICE by Ron Shapiro, Mark Jankowski and Jim Dale.

Here are three warnings - don’ts - to keep in mind when you are digging for information during a negotiation:

1. Don’t Mind-Read

Don’t assume you know what the other side is thinking and simply proceed on that premise. If you base your proposals on assumptions, you run a high risk of being wrong. You may assume your position is stronger than it is and make an aggressive but naive offer. You could also assume your position is weaker than it actually is and back yourself into a bad deal.

It is natural to make assumptions. It is even acceptable if you don’t act on those assumptions. Test them first - during the probing phase. Ask questions, explore, find out if your assumption is valid, close or off the mark.

2. Don’t Offend - Interview, Don’t Interrogate

Unless you are a prosecuting attorney - the other side is not compelled or obligated to cooperate and answer your questions. If you go after the other side with an aggressive attack, expect them to shut down. On the other hand, if you approach the probing process like an interview, there is almost no limit to what you can learn.

Show an interest in their side. Soften your inquiries with lead-ins such as “Tell me more about that…” and “Let me understand where you are coming from…” It is also important to let them answer when you ask a question - try hard not to interrupt. If they ask you a question, don’t evade it - embrace it and explore it by saying something along the lines of “I’m glad you asked that, because it makes me think about…”

3. Don’t Get Off Track

The other side may try to rush you through the (probing) process. They do not have the same agenda as you do. Make sure that you get the answers you need before moving into a proposal. Don’t hesitate to slow the process down by saying something like “Let’s hold off on that for a moment…” or “Can we go back to something you just said…”

Equally important is to stay disciplined and not let yourself rush through the process. Sometimes we can become impatient with the pace and try to take a short cut before we have all of the information we need. Impose the same “slow-down” techniques on yourself.

The concept of “aiming high” is perhaps one of the most well-known and abused negotiating techniques. So many deals are undone by the opening gambit when it is unrealistically high, yet many jaw-dropping deals are completed (see Alex Rodriguez’s $250M+ contract and the $750B bailout of Wall Street) with a high opening offer. So what is the right way to aim high?

Aim Reasonably High

In the normal course of business (let’s leave major league baseball and Hollywood aside for now!), offers should be set within reason. Since almost every business has competition with similar products and services, an unrealistically high opening offer will merely push your prospect to explore other vendors and use your offer as the “ceiling” for future negotiations with others. Aiming too high will give you the reputation of being overpriced, which can lead to missed opportunities to bid on future projects and orders.

So how can you aim reasonably high? The primary goals of aiming high are to:

• Leave room for negotiations if necessary
• Set a nice high “anchor” for the negotiations
• Build value around your services with a premium price point

The trick is find that “sweet spot” where the offer meets these three criteria, yet is not so high that it scares the other side off from engaging in negotiations. Here are some tactics for establishing the reasonably high offer:

1. Use Precedents

One tried and true technique for aiming reasonably high is to employ precedents in support of your offer. By having examples of past deals that had similarities to the one you are currently negotiating, you can provide justification for the “reasonableness” of your offer. These do not have to be deals that you personally negotiated, but comparable deals that you uncovered during your preparation.

You can also use these precedents to highlight the differences between the current deal and past negotiations in the event that your opening offer is rejected quickly. This opens the door to creating options and alternatives that will allow you to adjust your pricing, terms and conditions without having to “concede”.

2. Use Wide Ranges When Asked for “Ballpark Figures”

When I am asked to negotiate in a competitive situation, one technique that I always consider is to start the negotiations with a nice wide range of pricing. For example, if someone is asks me for a “ballpark figure” on how much it would cost to plan a retreat for 100 people, I usually respond that “it depends on a lot of things, such as the amount of customized activities, the travel involved, prduction costs for materials and how long the retreat would be.” If they press me for a number, then I would tell them that it can be as little as $10,000 and as much as $50,000.” This range is wide enough so that it cannot “stick”. It is also useless as column fodder, since I reserved the right to adjust my “offer” based on the prospect’s answers to my questions.

When a range is too narrow, the other focuses on the end of the range that benefits their interests while you are likely focused in the end of the range that fits your own. This can quickly deteriorate into “positional bargaining” which almost always leaves one side feeling as if they “lost” the negotiation. Using a wide range gives negotiators the chance to ask more questions and explore highs and lows to to gauge the other side’s responses.

3. Do Not Use Disclaimers to “Soften the Blow”

In a competitive selling situation, many salespeople feel pressure to get the deal done no matter what the cost. So even in situations where a salesperson aims reaonably high, there is a real risk of “losing” the negotiation by adding a disclaimer to the offer, such as “But of course, everything is negotiable” or “We’ll work within your budget.”

One of my collegaues always asks his audience, “Does anyone know what it means when someone advertises an item at a price and adds “OBO” to the ad? What does OBO mean?” Of course, someone calls out “Or Best Offer!” My colleague’s punch line is that OBO actually stands for “You’re a fool if you pay me the price I’m advertising!” The “offer disclaimer” has the same effect. It robs your reasonably high offer of all credibility and now the negotiation will start downward from your offer.

We hope these proposing techniques help you to maximize your returns in your negotiations, and for more information on effective negotiating, selling and influencing, please visit www.shapironegotiations.com.

One thing we have learned over the years in negotiating deals is that the way you get to the agreement is as important as the outcome of the agreement. Many deals are struck where one (or sometimes both!) sides walk away feeling like they “lost.” It is better to adhere to some fundamental rules for proposals that will help you avoid striking deals that leave you or the person with whom you are negotiating feeling like you “left money on the table.”

1. Try Not to Make the First Offer

Let’s imagine you are negotiating to purchase a used boat. Walking around the marina one day you see a boater cleaning his 24′ sailboat, and you notice a “For Sale” sign on the deck. You alook the boat over and privately decide that it meets your needs. The seller asks you a seemingly inocuous question - “How much were you looking to spend?” Your response here is critical.

You know from research (because you prepared, of course) that this particular model is going for $12,000 on the used market locally. You know you have $12,000 saved for this purchase…so you respond “$10,500″. Not a bad offer, right? You are aiming lower than your budget, and according to your research you are $1,500 below “market value.”

To your dismay, the seller leaps over to the dock, grabs your hand, shakes it vigorously and says “You just bought yourself a boat!” You immediately try to backpedal…because the seller’s quick response is leading you to believe that you have left money on the table.

The problem here is that you failed to consider the value of the boat from the seller’s perspective.

Maybe he needs $8000 today to pay for a new home heating system. Or maybe he just bought the boat from a relative for $5000 and was really hoping to make $1000 profit. Or perhaps his wife just told him to get rid of the boat even if he had to pay someone to take it!

So your “well-conceived” $10500 offer was really not very well thought out after all. Now you have established an “anchor” (ironically enough) for the negotiation. It will be VERY difficult to move that number too far south from the original $10500, as now the seller knows your budget. This is the reason big ticket salespeople (cars, home remodeling, realtors) always ask “What’s your budget?” right away. It helps them to know your budget so they can anchor your offer.

2. Do Not Accept FIrst Offers TOO Quickly

Now let’s change the perspective and imagine that you are the seller. Instead of leaping across to the dock and “closing” so fast, you took a different, more thoughtful approach. First, you paused. Then you said something like “I’ll have to consider that.” And then you pointed out some of the finer features of your boat. And then you closed with “You drive a pretty hard bargain. I was thinking more along the lines of $11,500.”

Now the buyer has a counter-offer that is still $500 below their budget (unknown to you) and you have asked for an additonal $1000. If the buyer accepts (or even uses the old “split the difference” gambit) - they are happy because they have bought a boat $500 less than their budget, and they go home believving that they “drove a hard bargain.” You are happy because you unloaded your boat for more than you had hoped.

This is the classic WIN-win outcome where one side exceeds their expectations and the other side is reasonably satisfied.

In the next entry, I will cover more proposing techniques that will help you achieve WIN-win outcomes. In the meantime, please check out http://www.shapironegotiations.com for more information on successful negotiating!

Let’s explore the art and science of preparing for the pharmaceutical sale at the Individual level. We believe that the clearest path from the waiting room to changing the prescribing habits of a physician (or physician’s assistant or nurse practitioner) is to:

1. Build credibility - in short, you have to know your stuff. Most physicians see upwards of 12 pharmaceutical reps a day, and those who do not know their product, the correct indications, the side effects, how the product interacts with others and the clinical data that supports all of these components…do not maintain access with a busy physician.

That being obvious, there are other aspects of credibility that relate to the character of the rep. These include:

• delivering the message clearly and concisely;
• admitting when you do not know an answer and following up with the right information;
• adhering to the pharma guidelines;
• being on the same page as your sales counterparts (in a team selling situation).

You can prepare for each of these - and thus, increase your credibility.

2. Build relationships - the long and short of selling is that people are much more likely to listen to, be influenced by and ultimately buy (or prescribe) from people they like. We do not suggest that physicians will not write a product that has clear clinical advantages simply because they dislike a rep, but that rep has a much bigger hurdle to clear in order to have their message heard in the first place.

From our research, physicians report that reps successfully build relationships by:

• Respecting the front office personnel and patients
• “Reading” the environment and adjusting their visit goal accordingly
• Adhering to the practice protocol on rep visits
• Acting professionally and mirroring the style of the physician

Some physicians like “educating” the reps while others expect to be educated. Seasoned reps figure this out pretty quickly and respond in kind - by asking questions of the “educators” and delivering precise messages to those who need information. All physicians report being more influenced by the reps who follow the rules, and who understand that when the waiting room is packed - there is no time to detail. Also, more and more offices are limiting the number of reps they will see by “closing the office” to reps on certain days or times. Doctors notice when pharmaceutical reps bend or break their rules.

When “preparing” to build a relationship with a physician, try to plan for multiple scenarios - who needs what and when is the best time to attempt to deliver it?

3. Build Value - Last but certainly not least - you have to bring something to the practice that differentiates your product and personal value. Pharmaceutical reps have always brought value to the physicians and practices on their target lists - luncheons, samples, honoraria for speaking, educational programs, branded office supplies, medical supplies and reference materials, etc… The challenge is that as of January 1, 2009, the pharma guidelines that regulate the marketing activities of pharmaceutical reps will tighten again, and many of these traditional “value” adds will be unavailable (for more information and reactions - see www.cafepharma.com).

So what will be left is terms of value that can be delivered? Many physiciams believe that this will separate the very best pharmaceutical reps from the masses….and preparing for this change will be the key! Some reps are already lining up their 2009 speaking programs, preparing memos to educate their physicians about the changes, and figuring out what non-branded (but memorable) marketing they will be allowed to use within the new guidelines.

CREDIBILITY + RELATIONSHIP + VALUE

If you can establish a high level of credibility, a strong respectful relationship across the practice and deliver enough value to outweigh the risk of switching to your product, then you are on the road to successfully influencing your physicians. The risk of switching can be daunting to a physician - no one wants the phone to start ringing after a prescription is filled…many doctors are feeling the “pain” of products prescribed and pulled, or of the ever increasing propensity of the evening news to highlight yet another side effect of a popular drug. Doctors don’t like phone calls, especially from unhappy patients (or their attorneys!) You can overcome this risk by being upfront about the benefits and risks of your product and consistently offering the suggestions and recommendations of your brand marketing team.

This concludes our short series on preparing to negotiate the “indirect sale” as it applies to the pharmaceutical industry. For more information and resources on negotiations, please visit www.shapironegotiations.com.

Preparing to Influence at the Practice Level

When getting ready to sell to a physician, the pharmaceutical sales professional has to take many things into account. Every rep knows what the physician is writing, what their share of the market is in whatever class of drug they are selling, and where they stand in regard to their sales goal. Most reps have this information at their fingertips thanks to todays technology.

More seasoned reps also think about who the players are in the practice, and they work to build credibility, value and relationships beyond the prescribing physician. We call this the Total Office Call approach, and it requires a more systematic and thorough approach to preparation.

Practice-Level Preparation

A standard S.W.O.T. analysis will help you develop a strategy for selling more effectively at the practice level. Understanding your strengths, such as your access, relationships and product’s clinical advantages, will give you more confidence in your message. Identifying your weaknesses (perhaps your product is not on formulary, or your competition is offering a generic) will prepare you for the most common objections. This is pretty fundamental stuff. The key to effective preparation at the practice level is to find your opportunities to grow your business and to identify the threats to your market share early enough to minimize the impact.

Opportunities

Based on our interviews with dozens of physicians over the years, we have learned that opportunities often emerge from objections. Physicians often see upwards of 15 pharma reps a day, and they have been conditioned over the years to politely listen to the clinical message and to move on with their day. When a physician is listening well enough to come up with an objection, the professional sales rep will recognize this as an opportunity to build credibility and start down the road to influencing the doctor. One example from a recent ride-along - The physician expressed a concern about the aftertaste side effect of a new drug. Instead of pitching possible solutions - such as using mouthwash, putting the pill in a dab of peanut butter, etc..- the rep had prepared for this objection and answered the physician’s objection with a question. The rep asked “That’s interesting. What else have your patients told you about my product?” The physician looked up from whatever he was reading, and said “Well, that it works.” Instead of “overcoming an objection” this rep was prepared with a question that put the focus back on the clinical advantages of their product. Of course, you cannot simply “duck” the concern, and the rep followed up by maximizing the opportunity. “I need to understand this patient’s situation better before I can recommend a solution - can you tell me more about this patient’s feedback?” A relatively long (for a pharma rep!) conversation ensued and the rep gained a lot of information that created the “bridge” to the next meeting with this doctor.

Threats

In an ever changing competitive and regulatory landscape, today’s pharmaceutical sales representative faces a broad array of threats to their market share. Ranging from FDA reviews, unfavorable study results, stricter ethical guidelines for marketing pharmaceuticals and increasing competition from generics - it can seem as though the pharmaceutical rep is fighting an uphill battle every day. Preparing for these threats at the practice level - such as knowing how you will position your product in the face of competitive threats or an unfavorable study that your competition is waving around - is an important influencing skill. Physicians report that how a rep responds in the face of a threat either increases or decreases the rep’s credibility for the long-term.

One rep that I know well had a popular product pulled from the shelves by her company several years ago when adverse side effects were discovered in a study. Her approach was to turn the threat into an opportunity - “I am proud of my company for pulling the product. We are in the business of helping people get well, so I hope that you see our commitment to that goal and will continue to support our other products.” Using that positive message (as opposed to a warning that other drugs in that class would have the same side effects or an apology for promoting a drug that was pulled) - this rep did not lose access or credibility with a single physician.

In the next post, we will explore a systematic way to prepare when influencing individuals within the practice - by examining barriers, credibility, relationship and most importantly - the value you deliver.