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What Are the 5 Negotiation Styles?

People have different communication styles. Individuals bring sets of experiences, skills, and tools that affect the way they interact with others, both at home and in the workplace. Individual communication styles also translate into how they negotiate. From these patterns of communication, five distinct negotiation styles have emerged: competing, collaborating, compromising, accommodating, and avoiding.

Negotiators often fall into one or more of these five styles whether they are trying to reach an agreement or resolve a conflict with multiple parties. Master negotiators know how to use their primary negotiation style to their advantage and when it’s beneficial to introduce the others. Read on to learn about the common characteristics of the five negotiation styles, their strengths, and their weaknesses.

 

Negotiation Style: Compete

A competitive negotiation style follows the model of “I win, you lose.” Competitive negotiators tend to do whatever it takes to reach their desired agreement – even when it comes at the expense of another person or entity. They are results-oriented and focused on achieving short-term goals quickly. Their desire for success motivates them, though the process of negotiation can blind them to potentially harmful impacts.

Competitive negotiators use all tools possible to boost their negotiation success, including:

  • Their position within a company structure
  • Their personality and humor
  • Aggression
  • Their economic prowess
  • Their company’s strength and size
  • Their brand’s visibility and influence

A competitive negotiation style is beneficial when you need to reach a short-term agreement quickly. If the terms of an agreement are critical and must be complied with, a competitive negotiator will be your secret weapon. If the second negotiator is also competitive, having another competitive negotiator on your team will be able to counter-balance their aggression.

Competitive negotiators work best in a highly competitive industry or for once-off sales, such as selling a home or a car. However, for negotiations with another highly competitive body, it is best to blend negotiation styles to avoid gridlock between two competitive negotiators.

These types of negotiators may focus more on winning than reaching a mutually beneficial agreement with the other party. Business relationships might break, and a company’s reputation may tarnish if a negotiation style is too competitive and crosses the line into bullying.

If you are a competitive negotiator, make sure to blend your style with a bit of accommodation or collaboration. Invite a partner to balance out your natural competitive streak. Business is as much about building strong relationships as it is about closing deals!

 

Negotiation Style: Collaborate

In contrast, a collaborative negotiation style follows the “I win, you win” model. Collaborative negotiators focus on making sure all parties have their needs met in an agreement. They value strengthening, establishing, and building relationships without compromising their company’s best interests.

Collaborative negotiators often evolve into this negotiation style from another. As time goes on and a negotiator gains confidence in reaching agreements, they become more comfortable advocating for their needs. They also become skilled in finding a mutually beneficial balance between their needs and the other party’s.

Individuals with a collaborative negotiation style are willing to invest time in finding innovative solutions and building business partnerships with other organizations. Other negotiation styles are often too impatient to invest this time, but collaborative negotiators are confident that they will benefit in the end.

A collaborative negotiation style is effective in most business negotiations. Collaborating with competitive negotiators is something to be wary of, however; since this negotiation style focuses on winning the most for their company, they might not be interested in developing a collaborative relationship. As a result, the more collaborative company can lose out – so be careful and always keep track of the agreement’s value.

 

Negotiation Style: Compromise

Many students of negotiation styles confuse the collaborative style with the compromising one. Unlike the “win-win” collaborative style, the compromising negotiation style follows a “I win/lose some, you win/lose some” model. When reaching the terms of the agreement, compromisers often relinquish some terms in favor of gaining others.

For example, if two governments are trying to reach a trade agreement, a compromiser might give the other government greater access to their country’s dairy market to gain protections for digital media trade. Simply put, a compromising negotiation style is a form of bargaining. Compromisers split the agreement’s value between the two parties versus finding a solution so that everyone benefits from an agreement’s full value. A competitive negotiator can easily take advantage of a compromising negotiator.

A compromising negotiation style is most useful in situations where the opposite party is trustworthy, and the agreement is under a tight deadline. However, compromising will cause your company to lose out on collaborative partnerships and innovative solutions.

 

Negotiation Style: Avoid

An avoiding negotiation style follows a “I lose, you lose” model. People who identify with the avoiding negotiation style highly dislike conflict and tend to talk in vague terms about the issue at hand rather than the issue itself. If an agreement is reached and an avoiding negotiator dislikes the outcome, they may try to take revenge on the opposite party before the party even knows that they were unhappy with the agreement.

Since avoiders dislike conflict and struggle with direct communication, they come off as passive-aggressive. This can cause rifts in interpersonal business relationships. Avoidance is a typical reaction when a negotiator is pitted against someone who is highly competitive. Avoiding negotiation styles work best in situations where the negotiation concerns a matter that is trivial to both parties. In conflict resolution, avoiding negotiators work best in situations where the investment of time to resolve the issue outweighs the outcome of the discussion.

 

Negotiation Style: Accommodate

An accommodating negotiating style follows the “I lose, you win” model – which does not seem to be in a negotiator’s best interest. Accommodating negotiators are the direct opposite of competitive negotiators. They focus on preserving relationships and building a friendly rapport by sacrificing some of their company’s interests in favor of the opposite party’s interests.

Accommodators tend to try to win people over by giving in to their requests. They tend to share more information than they should. They are often well-liked by their colleagues because of their kindness – but kindness doesn’t work in every negotiation situation. Accommodating negotiation styles work best in situations where your company has caused harm to another and needs to repair a significant relationship. These negotiators are skilled at peacemaking between different bodies.

However, don’t send a pure accommodator alone to a negotiation with a competitive body. They can easily be taken advantage of. An accommodating style can easily turn into a collaborative style with proper training and teamwork.

 

Which negotiation style describes your negotiation practices the best? Do you tend to compete, collaborate, compromise, accommodate, or avoid? Or do you practice a mixture of negotiation styles, expertly bringing in competition or accommodation to fit the environment? To learn more about how to use your negotiation style to your advantage, visit Shapiro Negotiations today to schedule a negotiation training session.

What Is Organizational Selling?

Multiple forms of sales take place every day in the corporate world. From B2B to B2C, a wide range of structures exists to diversify the market and provide the best goods to consumers. One of the most complex forms of sales is known as organizational selling. With organization selling comes a set of standards and guidelines to which salespeople must adhere to establish trust and credibility with their clients.

 

 

The Definition of Organizational Selling

Organizational selling is defined as a business selling to another business. This seems simple enough, but organizational selling follows a different set of rules than selling a product to a single person. Just like their customers, organizations and businesses require certain products to keep their operations running smoothly. From shipping and packing supplies to raw materials like wood and steel, these organizations need to purchase goods from an outside source if they don’t produce them.

Driven by customer demand to produce goods, organizations purchase products in greater quantities than private consumers. As a result, organizational selling often deals with bulk purchases and their order costs tend to be much higher than what an individual would purchase. In addition, organizations must adhere to certain guidelines regarding the products they use. A certain type or quality of wood, a certain grade of steel, even packing boxes must adhere to organizational policies and consumer protection laws.

Sometimes, governmental standards under the Occupational Safety and Health Administration (OSHA) are also applicable. For example, if your company manufactures no-slip shoes and steel-toed boots, another organization that wants to supply its employees with these shoes would likely ask if your product is OSHA-approved.

When organizations look to purchase goods, they are looking for products that would provide the greatest value for their businesses and meet certain quality and safety guidelines. This makes their purchasing habits unique from individual consumers.

 

Why Is Organizational Selling Important?

Knowing how organizations and businesses purchase goods is the key to marketing those goods effectively. The purchasing habits of these businesses can easily translate to common sales practices such as pitching and cold calling. Organizations depend on certain products to survive. For example, if you own a lumber mill or a mining company, the raw materials you produce are necessities for certain companies to operate. Take advantage of this fact by identifying those companies and pitching your product to them.

Identifying how your products can benefit organizations can lead to the development of a list of potential clients to contact. In addition, the bulk purchases of these organizations will provide major revenue that often exceeds what a private customer can provide. Facilitating an organization’s buying experience by allowing bulk purchases will keep them coming back for future business.

Since organizations adhere to standards regarding certain materials and products, researching the guidelines that surround your product will lead to additional development and marketing opportunities. Does your steel need to be a certain grade to be marketable? Does your latest line of shoes need OSHA certification? Bringing your product up to standard will allow you to market those qualifications to potential customers, making them likely to buy.

The use of missionary salespeople can help you identify and sign potential organizational clients. Missionary salespeople enter a region that your company does not currently serve and market your products to potential clientele, including major organizations that rely upon the goods that you produce.

Salespeople can use the concept of value selling to market your products to major organizations. Value selling focuses on how a product can solve a customer’s problems. With organizations, the problem is simple: They need safe, high-quality products to manufacture their own products and to keep their companies running smoothly. Your company manufactures the safe, high-quality product they need – and you can sell it to them.

 

The marketing formula is simple. Organizational selling is ripe with potential sales success – all it takes is a little bit of research and making the right connections. To learn more about effectively marketing your product to organizations, contact Shapiro Negotiations today about our corporate sales training program.

What Is Reservation Price in Negotiation?

The art of negotiation requires that people know the definitions of some confusing terms. Reservation price, BATNA, surplus, demand, ZOPA – these words can easily overwhelm a new negotiator.

However, once you know the simple definitions of these not-so-simple words, you will be able to use them with ease and authority and apply their concepts to negotiate successfully.

 

Reservation Price Definition and Examples

Reservation price is the least favorable price at which a negotiation will be accepted. This price is always a numeric amount. Simply put, the reservation price is the lowest amount that a seller will accept for an agreement and the maximum amount a buyer will pay. This is also known as the “walk away” point.

For example, imagine that you are selling the house you purchased 15 years ago at $500,000. Your house is worth $1.5 million, but with the current state of the housing market and the demand for purchasing a house, you would be okay with selling your home for $1 million.

You meet with a prospective buyer, and they tell you that the highest they are willing to pay would be $1 million. This would be your reservation price. From this point, you can decide whether to sell your home to this buyer or wait for a higher offer.

Many people confuse reservation price with BATNA. BATNA stands for “best alternative to a negotiated agreement” and, unlike reservation price, it expresses a scenario rather than a number. BATNA answers the following question: “What will you do if you are unable to reach a negotiated agreement with your partner?” While the reservation price is dependent upon reaching a negotiation, the BATNA is a back-up plan in case negotiation fails.

Using the previous example, imagine that you are still selling your home worth $1.5 million. Your reservation price is $1 million, as it will be the lowest price you would accept from a buyer. However, a close relative is moving to your city from out of state and is looking for a place to live. She offers you $900,000 for your home, a little more than half of its current worth but nearly twice what you paid for it.

If you are unable to reach a negotiated agreement with an outside buyer, your BATNA would be selling your home to your relative. Your reservation price will remain the same and while you would not be able to sell your home at the desired price, you will still make money off the negotiation.

Often, reservation price and BATNA do not yield such a wide profit margin. Imagine you are selling a guitar online. You purchased the guitar five years ago for $500, and it is still in good condition. You decide to list the guitar for $350 and decide that your reservation price is $200.

A buyer contacts you after six months of waiting for a response. He offers you $150 for your guitar, which is lower than you’ll go. You negotiate for $200, but he refuses. You decide to wait for another offer to come along but inform the buyer that if no one gets back to you, he can have the guitar for $150. This buyer would be your BATNA.

 

Why Is Reservation Price Important?

Simply put, reservation price is important because it allows a negotiator to define their baseline. For consumers and sellers alike, reservation prices help us make rational, informed decisions during negotiations, ensuring that no shady deals or lowballing takes place. Reservation prices protect everyone during negotiations and enable appropriate discourse.

 

To learn more about the art of negotiation, contact Shapiro Negotiations to schedule an expert training session today.

 

Tips for Cold Calling Scripts

Solicitation Many people say cold calling is a dead practice. With the rise of social media, email, and internet marketing, it’s easy to dismiss good old-fashioned phone calls as unnecessary. The stress of collecting phone numbers, making multiple calls to unexpecting strangers, and facing anger and hang-ups just isn’t worth the low sales yield.

However, many sales employees are simply not communicating effectively with their customers because of poorly written sales scripts that lack organization and a personal human element. Making simple changes, such as studying the anatomy of a cold calling script and taking on a conversational tone will help strengthen your cold calling script and turn your sales pitches from boring and basic to engaging and persuasive!

 

Know the Anatomy of an Effective Cold Calling Script

The basic anatomy of a cold calling script is:

1. State your name and your company, as well as some variation of “I hope your day is going well!”

2. Connecting statement. This is where researching the prospect comes in handy. Use the information you’ve learned about their company or interests and connect it to your own experiences.

3. Reason for calling. Tell them why you’re calling, but not explicitly. Explain that you notice that they are lacking a service or product that your company can provide for them. Be specific and connect with the prospect.

4. Qualifying statement. Tell them why your company can provide the best service or product and make their operations easier. Tell them what your service or product does and ask them if they already use a similar one.

5. Personalized ask. It’s all up to you from here. If they already use a similar service or product, tell them why yours is better. If they don’t, explain the benefits of your service or product. This will lead into your ask – and hopefully lead to a sale!

Many times, a sales call fails because of poor organization and preparation. Adhering to this basic structure will allow you to communicate the purpose of the call and begin your sales pitch to the customer quickly and effectively.

The amount of time a cold calling script should take a salesperson to read through should be 30 seconds or less. The entire sales call should take only a few minutes to complete. With a cold call, you are likely interrupting the prospect’s daily routine and you want to be mindful of their time. With a concise script, you will be able to communicate your message quickly, confidently, and clearly – qualities your prospect will appreciate.

How can such a short sales pitch be compelling enough to lure in new customers? The answer lies in the amount of prior research a salesperson does and his or her ability to hold a conversation.

 

Identify the Audience and Research, Research, Research

Once you’ve identified your prospective customer, take a few minutes to research them. Visit their LinkedIn profile and company website. Visit their associated social media profiles. Make notes of areas where your service or product can benefit them.

This information will help you craft a compelling qualifying statement and reason for calling. This research will set you apart from other sales calls in the customer’s mind, adding a personal human touch to your pitch that will compel them to learn more.

 

Have a Simple Opening

State your name and your company but try not to linger too long on your introduction. If someone detects that you are a cold caller, they may hang up immediately. A simple “Hi [prospect name], this is [your name] from [your company]” will convey a friendliness and a familiarity that will keep the prospect on the phone longer.

Try not to ask the prospect how their day or week is going. Both the caller and the prospect know that “How are you today?” is simply filler and doesn’t convey genuine interest. It is more professional to use a statement such as “I hope your day is going well” or “I hope you’ve had a good morning.”

 

 

Be a Human, Not a Robot

The purpose of a cold calling script is for referral, not to read word-for-word. Having a well-organized script will allow you to communicate in a credible, authoritative way, but if it’s obvious to the customer that you’re reading from a script, you lose that credibility.

Always adopt a conversational tone when using a cold calling script. Read the script like an actor, not a robot. You want to connect with your prospective customer – talk with them, not at them!

 

A Cold Calling Script Example

You can tweak the following cold calling script example to fit your sales pitch. It applies the basic script anatomy, takes on a conversational tone, applies simple research, and has a simple opening.

Jessica, a sales representative for Rooster Distribution, is trying to find new customers for her company’s line of phone accessories, including chargers, headphones, and charging blocks. She identified her city’s local aquarium as a prospect, since it is a tourist hotspot and many travelers may need to purchase emergency phone accessories. The following is the script Jessica plans on using to call Rob, the manager of the aquarium’s gift shop:

 

Hi Rob, this is Jessica from Rooster Distribution. I hope you’re having a good morning!

I’m a big fan of the Bishop Aquarium – I saw that you’re opening a dolphin exhibit next month! I can’t wait to check it out.

The last time I visited the aquarium, my phone was dying, and I noticed that your gift shop doesn’t have any chargers in stock. I know that a ton of tourists come around as well, and I imagine that they might need these products too… you know how hectic traveling can be and how important your phone can be!

Losing a charger or needing one in a pinch is super common and something I deal with all the time. Rooster Distribution supplies local businesses around Bishop with phone products like chargers, headphones, and charging blocks every day. Has your gift shop considered stocking products like these?

[continue from here and transition into ask].

 

Of course, even with the best cold calling script in the world, you will receive hang-ups and rejection. This is simply a part of the sales world. It’s important to keep pushing forward to success – and with a well-organized, conversational script, your chances of success will increase.

To learn more about cold calling scripts and other effective ways to boost your sales call success, schedule a corporate sales training session with Shapiro Negotiations today.