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focus_Negotiations: 3 Steps to Increased Competency

Negotiations: 3 Steps to Increased Competency

By Todd Zaugg

Is your company experiencing any of the following challenges?

• Eroding margins.

• Longer sales cycle.

• Disloyal customers (constant contracting).

• Reduced market share.

All of these challenges can be traced back to an inability to effectively negotiate. It’s common for sales professionals to believe they are competent negotiators, but then struggle during powerful real-world simulations. The truth is, many sales people and managers have low awareness related to this skill set. What can be done to sharpen aptitude in this area? Working to understand the common pitfalls experienced during negotiations will allow for action planning that leads to increased negotiation engagement success.

The undercurrents that significantly impact negotiations are often overlooked completely. The life sciences negotiation environment is unique in the fact that the person you are negotiating with “today” is also someone you will need to “live” with tomorrow. This creates an oversensitivity to the delicacy of those interactions. We should be prepared to ask tough, penetrating questions in a very “servant” manner. We need to embrace the inevitable stress and manage the “tension” toward the proverbial “win-win.”

The first step in this training should focus on a highly actionable negotiation template featuring these components:

• Information

• Strategy

• Preparation

• People

Once these negotiation basics are understood and mastered, it’s important to continue the learning process to include the sales team’s actual negotiation interaction with the buyer. Our research and experience have shown that even after excellent preparation, 33 percent of sales people quickly default to the maximum discount. The primary reason for this is not poor information or strategy, it’s because the sales people were not prepared to manage the tension of the negotiation.

People are not comfortable with being uncomfortable and, as such, they will look to accelerate the negotiation in order to remove the perceived or actual pain of that interaction.

How can this challenge be solved? Sales professionals and managers have to increase their competency to deal with interaction tension. There are three steps to accomplish this:

1. Understand the Psychology of the Negotiation. According to the Harvard Law program on negotiation, breakdowns in negotiation occur because, “We often think of ourselves and the parties we work with as entirely rational, when in fact our individual realities are firmly rooted in our subjective perceptions, which are shaped by the particular ways in which our brains and sensory systems have evolved.” Specifically, they established these 10 neuro-principles that demonstrate how individuals are likely to react to negotiations:

• We consume our brain’s resources efficiently, and create patterns, scripts or memories.

• We predict according to our patterns, scripts or memories.

• We are conditioned to avoid and be far more sensitive to danger and fear than to reward and pleasure. Which we seek (“away” v. “toward” reflexes).

• We first perceive via emotions (unconsciously) before being able to self-regulate (consciously or by habits).

• We seek safe or comfortable status positions at all times.

• We relate and empathize in-group (but not “out-of-group”).

• We believe in “fairness” and react negatively to “unfair” behavior.

• We need autonomy/feelings of autonomy and feel/suffer if it is lost.

• Our “social” stimuli are as powerful as our “physical” ones.

• We operate cognitively in two gears (“refleXive” & “refleCtive” modes): primarily in X-mode.

• We would also add: Understanding your counterpart’s motivators and their “power.”

2. Increased Preparation on the Psychology of the Negotiation. Too many negotiation programs focus on the rational aspects or deal structure whereas research shows that negotiations are ripe with emotion. Consider the following to prepare for all dimensions of the negotiation.

• Awareness of yourself (mindset scripts, patterns) and your negotiation style; the real opportunity; common irrational tendencies of all humans; your counterparts’ past negotiating style and definition of a “win.”

• Capture value of the holistic impact of your solution. What are the operational, financial, clinical and strategic value impacts (e.g. drive more private pay, reduce readmission rates, etc.). Can you assign a dollar value?

• Tripped up is a term used to describe conscious and unconscious games people play or strategies by your counterpart to diminish your value. Master negotiators will try to make you uncomfortable during the dialogue (e.g. your company has a terrible service record, we are seriously considering your competition, etc.). It is critical that you work on being com- fortable with being uncomfortable— this is the element of managing tension.

• Identify motivators: What’s driving your buyer’s decision? What are their personal wins and their rational wins? Is it budget, competition or pressure from upper management for them to find a solution quickly or at a lower price?

• Presenting options is a powerful concept of providing empowerment to your counter-part. The key is to never use the word “no” without first offering options and concessions.

• Negotiate expanded concepts related to: “stranger danger” (when they bring in someone you don’t know); creating “trust treats™” to overcome their “patterns” (e.g. that sales people cannot be trusted); framing and reframing key objectives; forced pairing (e.g. what is more important to you, managing costs or growth).

3. Real World Simulations. To enhance negotiation skill development, a stronger emphasis has to be put on navigating uncomfortable negotiation dialogue. There is no substitute for the power of practice in order to become competent at eclipsing stress to insure clear communication. As with all skill development, proper coaching practice to insure its effectiveness is critical.

Effectively executing a plan to address these three steps has proven to increase sales team competency to understand and deal with “interaction tension” and ensure more successful negotiation engagement with the end goal of moving the needle on performance.


Todd Zaugg is the founder of Matrix Achievement Group. Email Todd at

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