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What Is Distributive Negotiation?

In some cases, such as when there is a fixed amount of value on the table, distributive negotiation is the preferred method to reaching a desired outcome. While integrative negotiation typically involves several complex factors, distributive negotiation involves a process where the outcome revolves around one factor, such as price.

For example, you might use integrative or interest-based bargaining when negotiating several aspects of a job – salary, benefits, time off, or even start date. By contrast, distributive negotiation involves one fixed point, and the assumption that both parties want to divvy up the pie in the best manner possible. Distributive negotiation examples typically involve purchases, such as a used car (for a consumer) or a large order from a vendor.

Distributive negotiation tends to be simpler than the integrative approach, simply because of the lack of external factors involved. However, both benefit from a thoughtful and exhaustively prepared approach. The more you prepare for any negotiation, the more likely you are to come out with a desirable outcome. Using a variety of strategies can help ensure that you’re coming away with a fair piece of the pie. Here’s how to do it:

 

1. Come Up With a Compelling BATNA

At the heart of any negotiation should be an effective BATNA, or best alternative to a negotiated agreement. In other words, what will you do if you cannot reach your first desired outcome? Generally, parties entering a distributive arrangement have a desired end goal, such as a price they’re willing to pay, or accept as payment.

The best way to improve your BATNA for distributive negotiation is to create various alternatives through research. For example, if you’re in the process of ordering a large amount of supplies from a vendor, it can be helpful to pursue several negotiations from different vendors at once. This better positions you to negotiate and achieve the best price possible by maximizing available benefits and even bouncing the possible alternative across vendors.

 

2. Find Your “Reservation Point”

Another key aspect of distributive negotiation is determining when you will walk away from the negotiation. For distributive negotiating, this is usually a fixed price point. For example, you might decide ahead of time, based on conversations with stakeholders and management, that you’re willing to buy supplies for $5,000, but will walk away if the other party refuses to come to that level.

It’s essential to determine your reservation point well before entering any negotiation, whether it’s a price you’re willing to pay, or what you’re willing to sell a product or service for. If you don’t determine this point before the negotiations begin, you could end up in a low-ball situation.

 

3. Think About the Other Party Involved

The key to understanding and effectively navigating any negotiation is accepting that you are only one of two parties involved. You don’t want to go beyond your reservation point, but neither does the other party involved in the negotiation. Knowing the other party’s BATNA and reservation point can help streamline the negotiation and smooth any major differences in opinion. In some cases, it can even narrow your options and determine when a negotiation simply isn’t worth pursuing.

Better understanding the other party requires proper research. Using the same example of vendor supplies, you might research the availability of other services in the area and how willing (or desperate) the other party might be to make a deal. When you have an idea of how much flexibility the other party has on price, you’re better suited to aim as high (if you’re the one selling) or as low (if you’re the one buying) as possible.

The distributive approach to negotiation involves acknowledging the differences that are inherent to both parties and understanding the basic definitions of BATNA and reservation point. When negotiating, keep those elements in mind and use them as strategies to achieve the best possible price. Remember, distributive bargaining involves taking home the largest slice of pie possible, a process that can require practice and additional training.

 

What You Need to Know About Integrative Negotiation

The right approach to a negotiation can make the difference between striking a deal and coming out with two parties disappointed. Integrative, or interest-based bargaining, tends to be the more fruitful of the two, because it tends to find common ground and come to a resolution that makes both parties involved happy. Here’s what you need to know about the importance of integrative negotiation, and how you can make it work in practice.

 

What Is Integrative Negotiation?

Two main camps of negotiation thought exist, and integrative negotiation tends to be the more popular of the two. Interest-based negotiation seeks to create a win-win solution to bring a dispute or other negotiation to a close. As a strategy, integrative negotiation focuses on the creation of a mutually beneficial arrangement between two parties that are often at odds. By addressing the underlying reasons for the conflict in the first place – needs, concerns, and fears – each party can effectively make trade-offs that leave each satisfied with the eventual outcome.

This is in stark contrast to positional bargaining, which aims to come to a resolution based on the idea that opposing viewpoints are fixed. As a result, “compromises” elicited in a positional bargaining negotiation might not be much of a compromise at all. While positional negotiation often leaves two sides of the table unsatisfied, integrative bargaining satisfies the objectives of both parties, effectively distributing the interests of both into the final compromise.

 

Effective Interest-Based Bargaining Techniques

Integrative bargaining is a creative process that requires acknowledgement of differences, out-of-the-box thinking, and skilled negotiators. Here’s how to do it:

 

1. Identify the Interests of Each Party

First, it’s essential to learn more about the aspects that might be holding a party back in a negotiations process. Generally, these include interests, needs, fears, concerns, and wants. This can also be a time-consuming process, because people don’t typically reveal their interests or fears naturally. It’s also important to remember that though only two people may be involved in a negotiation, many other people are also “at the table.” A negotiator must often represent the interests of an entire organization, including superiors and stakeholders. This can make the pool of interests grow and make negotiation more difficult.

The best way to identify the needs of the other party is through posing a lot of open-ended questions that ask “why?” (e.g., Why do you need that? Why do you think that’s important?) By figuring out why people want what they do, you can effectively understand their interests and be better able to address them in the negotiation process.

The key here is understanding people’s needs in order to arrive at a win-win solution, not to barter for a better position that leads to “beating” them – which undermines the whole idea of integrative negotiation itself. This also applies to answering questions. Be as transparent as possible and make sure that the other side knows your underlying interests, as well.

This can also be one of the most challenging aspects of interests-based negotiation. Learning the best practices for open-ended communication is essential and may require professional intervention.

 

2. Determine All the Options – Then Narrow Them Down

Once each party has an idea of what the interests of each side of the table are, the real work begins. Cooperation is a key focus of integrative negotiation, and parties must work together to identify common ground and determine the best solution for everyone involved. Rising to meet the interests of both parties is usually a matter of brainstorming. At the beginning, it’s important to simply get ideas on the table without judgement or countering – simply list solutions that will work for you and allow the other negotiator to list theirs without explaining why they won’t work. Once you both have a list of possible solutions, now is the time to tweak them and make adjustments that leads to a true “win-win” situation.

Though some may view them as mutually exclusive, the act of integrative negotiation is essentially distributive. You and another negotiator are creating ideas that go into a pie, under the notion that you’ll each go home with half. Baked into that pie are the ideas, hopes, and interests of the parties involved. Integrative bargaining allows for negotiators to effectively stuff the pie with as much of the good stuff as possible. Through compromise, you may reshape the pie and throw out scrap pieces of dough, but you should both be happy with the result.

Integrative negotiation begins with the idea that both parties involved in a negotiation have fundamental differences and objectives. However, by listening to one another’s interests and needs, both parties can also learn what’s holding one another back from an effective negotiation. By utilizing a strategic deployment of options after brainstorming a list of possibilities, negotiators are better poised for a win-win situation.

Improve Your Sales Prospecting With These Proven Processes

It’s no secret that sales is a competitive field. In a technology-driven mobile environment, the industry is more dynamic than ever. Sales reps must make use of a variety of techniques to make the most of their efforts – this applies not only to closing a deal, but with sales prospecting itself. Learn the essential sales prospecting tools and processes you should be incorporating into your workday.

 

What Is Sales Prospecting?

Simply put, sales prospecting involves seeking out potential buyers or customers to garner new business. Ideally, the process of sales prospecting will move a prospective buyer down the funnel until they become new – and hopefully repeat – customers.

The difference between sales prospecting and lead prospecting is subtle, and the source of some confusion. Generally, we think of a lead as someone who has a marked interest in a product or service that is demonstrated by visiting the website, subscribing to an email list, commenting on a blog post, or something similar.

A sales prospect, on the other hand, is a lead who we might deem as a qualified potential customer. In other words, he or she fits a target buyer persona and is generally more likely to continue down the sales funnel.

Some people use the terms sales prospecting and lead prospecting interchangeably, and they’re very similar. However, true sales prospecting focuses the effort on the people who are most likely to become bona fide, revenue-generating customers.

 

Best Practices for Sales Prospecting

Like any other aspect of sales, prospecting takes time, a thoughtful process, and a continual commitment. Over the years, we’ve identified several strategies that make sales prospecting more likely to be successful.

 

It Starts With Your Mindset

Any successful prospecting approach requires the right frame of mind. The best reps use an “always prospecting” approach to their practice. In other words, prospecting is not something that you do once. It’s a continual, effort-based process that uses a variety of techniques to reach success.

In general, the prospecting mindset involves continuous research. Knowing the customer is arguably the most essential aspect of sales, and sales prospecting is no exception. Sales reps must know if they’re eliciting quality prospects that they can deliver business value to. The research phase of prospecting involves asking several important questions, such as:

  • Is the prospect viable?
  • What system will work to prioritize prospects?
  • How can reps develop opportunities to connect?

By continuously deploying the research phase, reps will be able to seamlessly move qualified prospects through the funnel. As with any aspect of sales, mindset is more than half the battle.

 

Develop a Viable Prep Tool

Getting into the mindset seems simple enough, but how can a rep know if a prospect is qualified? This is where battle-tested sales prospecting techniques come in. We find that the following process proves to be successful:

  • Identify the target. Remember, a lead becomes a prospect when he or she fits into a target buyer persona.
  • Establish precedent. Why would a prospect be interested in a product or service? How does it address his or her pain points? Does any compelling precedent exist that would help establish a prospect as a qualified lead? This is also a good time to examine other disqualifying notions such as budget limitations or time constraints.
  • Create a script. The final step in the sales prospecting process is developing a script for identified, qualified prospects. The goal of this script is to be actionable as soon as possible, which we’ll discuss more at length.

 

Rehearse the Script

It’s a good idea to have an established script in place when making cold calls or participating in other sales prospecting activities. However, it’s also important to understand that these scripts aren’t one size fits all. The success of a script depends on a few different factors:

Personalization. Tailor messaging to address a specific problem that prospects are having.

Keep it relevant. Do some research ahead of time and determine if the issue is still a relevant concern. Remember, some prospects simply get stale.

Be professional, but casual. No one likes feeling like the recipient of a cold call. Add touches that make the script seem less scripted and more personable. Use a natural tone, whether communicating through email or over the phone. Resist the urge to be “sales-y” and keep the focus on adding value.

Be helpful. The key distinction between prospecting and selling is the desired outcome. Obviously, the end goal of prospecting is revenue. However, at this stage of the process, provide the prospect with something valuable and expect nothing in return (a good example is a free consultation or something similar).

 

Create a Sales Prospecting Strategy That Works

Now, down to the nitty-gritty details. How can a sales prospecting strategy ensure success? We advise using the following techniques:

 

Use a Mix of Inbound and Outbound

The conventional wisdom has long been to use either inbound or outbound prospecting, but a mix of both tends to work best. While outbound prospecting involves more aggressive prospecting such as cold calling and social media messaging, inbound marketing focuses more on casually emailing or social selling to someone who already has an expressed familiarity with the product or service. Both have their advantages; but inbound prospecting tends to be more successful. Consider, for example, that IMB managed to increase their sales by 400% after implementing an inbound prospecting program.

 

Make a Great First Impression

Even when working with qualified leads that express familiarity and interest, it’s essential to communicate expertise and credibility from the first interaction. Here’s how to do it:

  • Practice, practice, practice. Many reps fail to realize a powerful tool that’s usually in the palm of their hands: their smartphone. Create an elevator pitch, record it, watch, and make adjustments. Think about how to communicate authority and warmth, and make adjustments, as necessary.
  • Ask for feedback. When in doubt, ask for help or expert advice. Most reps can improve or refine an elevator pitch with just a few simple adjustments – sometimes, it just a matter of getting a different point of view.
  • Remember the end goal. Many people fail to recognize the goal of prospecting, which is simply to add value. Do not overtly sell; give a prospect something, and don’t expect them to give anything in return. Do, however, schedule a time for follow up if possible.

 

Sales prospecting is a continual process, but it’s well worth the effort. When using proven sales prospecting techniques, reps can move qualified prospects down the funnel and efficiently increase their sales each month.

Is a Pharmaceutical Sales Certification Valuable?

 A certification means you have successfully completed the coursework and have mastered a particular skill set. While the pharmaceutical sales industry does not require a specific degree, there are ways to show you have mastered what you need to know. Take a quick look at why having a pharmaceutical sales certification can benefit your career and get you ahead in your field.

 

Stand Out in a Crowd

When applying for a job, there can be a field of candidates with the same experience and skills. What will make you stand out from the crowd? Recruiters look for those candidates with experience and professional coursework on their resume, showing they know their field of study. The applicants without any experience or certifications get put on the bottom of the pile. Be sure to add your relevant coursework to your resume to get your name to the top of the list. A Pharmaceutical Sales Certification would definitely make this list of important qualifications.

 

The CNPR Certification

The industry standard is the CNPR (Certified National Pharmaceutical Representative). This certification shows you have mastered the coursework and have an understanding of the pharmaceutical sales field. CNPR status can be checked with a simple phone call or online search, which makes it easy for recruiters to check your status. As an entry-level sales representative, you may not have experience in the field, but having this stamp on your resume will really show you have the skills you need. The test consists of 160 questions that must be finished in less than 120 minutes. At 45 seconds per question, this means there is no time to stop and think. You must demonstrate mastery of the exam questions for a passing score.

 

Industry Standards

The pharmaceutical industry has a lot of standards to learn. You can be sure you have mastered what you need to know by earning a sales certification. The course will take you step-by-step through everything you need to know, ensuring no rock is left unturned. It’s the whole package deal and shows potential employers you have learned and mastered the industry standards to be able to jump right in. Rules and regulations for selling medication are fairly strict, and not knowing them can cost you your entire career. Why wouldn’t you want to be confident in your knowledge of the industry?

 

Know the Jargon

Sales representatives need to master medical jargon before heading out on their first sales calls. Unless you attended medical school, you will probably never have all the language, but there is no way you can sell a pharmaceutical to a doctor’s office or hospital without knowing your subject.

You are less likely to be taken seriously during a pitch if you do not sound like you know what you are talking about. When a client can’t take you seriously, there is no way they are going to trust you. A pharmaceutical sales certification shows potential customers as well as employers that you have the language and knowledge needed to make a pitch and relay the information in a way everyone can understand.

 

Experience Does Not Always Trump Education

Experience does not always come out on top for an entry-level position. Recruiters look for those most qualified for the position, and often that means the person with the most education wins. Experience in the sales field is a great thing, but if it has been done without the proper training, a company may spend more time and effort undoing previous techniques. Instead, they may opt to go with a candidate who is fresh from the certification test, who has learned the medical jargon, industry standards and carries the CNPR certification. Keep this in mind when crafting your resume. Be sure to list all relevant trainings as well as any experience you have had in the field, whether it be a sales position or a relevant medical-related field.

SNI offers coursework that will prepare you for the CNPR test. Having a wide background of sales coursework can add to your readiness for the exam.