Broadly, these styles fit into one of three categories, adversarial, collaborative and consultative. Nearly all negotiations can be classified as one of these three types. Moreover, in many cases, sales professionals in negotiations are unaware that one of these three styles is unfolding because so few enter negotiations with a clear understanding of how the approaches differ. Success lies in knowing the difference between each and entering a sales negotiation with a clear intent to adhere to a style that leads to a mutually beneficial outcome.
Here we examine each of these three styles differ and why one surpasses the rest for a win-win outcome.
When business negotiations become adversarial each side is attempting to force the other. In this scenario, negotiations become a zero-sum game. Simply, a competitive negotiation style means there is a winner and a loser. Few enter a negotiation with this approach. The problem, however, is that the negotiation process can quickly become adversarial if one side loses focus on the importance of building relationships that create opportunities or future business. When a negotiation becomes adversarial it is likely to be the last conversation between the two sides. It is win-lose.
Consider research from Harvard that concluded, “The myth of the effective hard bargainer should be destroyed.” The researchers learned that negotiators who took on the role of a problem solver were among the most effective. Developing these problem-solving skills means being able to reach a mutually beneficial outcome without relinquishing valuable terms. Competitive negotiations rarely reach this goal.
Adversarial negotiations are rarely about winning. They are about making one side feel victorious. Paradoxically, this leads the most adversarial side to make mistakes thereby missing an opportunity to capture the full value of the deal. Put simply, an adversarial approach leads to myopia in which single-mindedness obscures value that the individual would have otherwise earned. This approach is to be avoided. The more one is able to recognise when a negotiation has become adversarial, the more they are able to course-correct and foster a more beneficial approach.
Collaborative negotiations are superior to adversarial negotiations because the aim is to work together. This is a more effective negotiation style because it seeks common ground. With collaboration, both sides can reach a deal in a way that allows for future business opportunities. Some cast aside this approach believing that collaboration allows the other side to make any demands they want. In truth, collaboration leads to a successful close because it encourages negotiators to find a centre that satisfies each side.
In fact, in many scenarios collaboration is a tool to get one closer to their goal. Consider that effective negotiators use collaboration as a means to shape perceptions of value. They focus the other side on what they will gain by reaching an agreement and what they will lose by falling short. Shaping perceptions of value applies to more than just the solution. Sales professionals should also consider ways in which they can reinforce the value of the relationship with the customer. This approach is an emotional appeal in which sales professionals reinforce their commitment to the relationship.
A collaborative approach also lends itself to dispute resolution in which the two sides are able to overcome differences in the interest of reaching an agreement. It is important to remember that while a collaborative approach has benefits it also has a drawback; it requires both sides to adopt a collaborative tone. This is not always possible. Even if one side sees the value of a collaborative approach there is no guarantee their approach will yield results because it requires cooperation from the other side. Sometimes this cooperation is lacking.
A consultative approach to negotiating is the most effective of the three approaches discussed here. It is effective because it seeks to understand the other side’s underlying perceptions. Moreover, it also equips the negotiator with the ability to overcome demands issued from the other party. A consultative style puts greater control in the hands of the negotiator by equipping them with the skills to shape the other side’s perceptions of value. Sales teams are able to shape perceptions of value when they focus the customer on what they will gain by reaching an agreement and what they will lose by falling short.
Importantly, sales managers who use a consultative approach are more effective in dealing with customer demands. They leverage the negotiation skill of control which is the act of converting a demand to a need. There is an important distinction to be made between demands and needs. A demand is nonnegotiable. It is an ultimatum. A need, however, is a requirement that can be met in a variety of ways. Consultative negotiations show us that such a need can be meet by trading.
Trading is one of the negotiator’s most powerful tools. It is powerful because it guards the negotiator against one of the most common traps in a negotiation: making a concession. A concession occurs when someone relinquishes something and receives nothing in return.
Consultative negotiations embrace the simple idea that even the other side may not be fully aware of what they consider valuable or what constitutes an ideal outcome. Therefore, the consultative negotiator has the benefit of guiding the process as the other party clarifies their needs.
Consultative selling requires negotiation skill that apply the same core concepts of asking questions to understand the other side’s underlying needs. Ultimately, sales performance can not improve without negotiation training that aligns with the ethos of consultative sales.