Negotiating tips: risk reduction

Negotiating tips: risk reduction

Most people live in a state of damage control. They go through life trying to ‘minimise’ the dangers when they really should be trying to ‘maximise’ the opportunities.

This natural negativity is demonstrated differently in buyers and sellers. In sellers you will see an attitude of ‘it’s better to get less than lose the sale’. The salesperson will settle, discount, pitch low and backdown in order to get the sale. Sellers who live in a state of ‘damage control’ usually aren’t very good at what they do.

The buyer who lives in a state of damage control will buy less and constantly wind up disappointed in what they've purchased. They will also put off making decisions until they absolutely have to. Their natural fears will be heightened by any negative financial news. They may be wary of suffering embarrassment after acting with haste and/or making a mistake.

If you can overcome a buyer's natural fears you will have a good chance of closing the deal. This is the art of ‘risk reduction’ and it nearly always translates into dollars. Any time you can remove or reduce the amount of danger perceived by a risk-averse client you will improve your negotiating position.

Potential ways to reduce the client's level of anxiety are:
Research:
The more positive data you can give the client about the merits of your product, the more their mind will be put at ease. What, if any, compelling data do you about your product? Do you have it on you at all times?

Testimonials: Positive reinforcement from other clients is a great way to reassure your client. Do you always have testimonials at your fingertips that can be provided to nervous buyers?

Strategy/evidence: The more effectively you outline the logic behind your strategy, the more at-ease the buyer will be. Do you have relevant case studies at the ready whenever you negotiate?

Way out: Give the buyer an ‘out’. For instance letting them know they can cancel at any time will help put them at ease (depends on the product you're selling, but if it's results-based, the buyer should be able to quit if it's not working - locking people into agreements that are routinely failing to deliver is a morally blinkered approach that doesn't build long-term success).

As with all negotiating there are powers at play that you need to recognise. The naturally risk-averse viewpoint adopted by the majority of our species is yet another of these powers. Good negotiators will be aware of this, and adjust their approach accordingly.

Drop me a line at rohan@kingfishercreative.com.au if you'd like to know more about this subject or any of the previous articles I've written. If you're in business and would like to discuss any aspect of marketing or sales please get in touch. If you're interested in digital marketing you can also take advantage of our current promotion - we're offering a Free Google Health Report so that you can find out where your site currently ranks, which keywords your prospects are searching for and how effective your website is. Check it out here.

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