Ineffective Sales Negotiation Skills Example | Richardson

Summary

In the negotiation scenario, Mara attempts to trade by reducing the price of Blue X from $20 to $18 for a 4800 unit commitment. However, she mishandles the negotiation by focusing on what the customer must sacrifice rather than emphasizing the value. She also fails to manage silence effectively, leading to premature price concessions without reciprocal commitments. Despite her efforts, she loses control of the negotiation as she struggles to align customer value with her offers and to manage the customer's resistance.

Takeaways

• 🤝 Mira focuses on what the customer must give up instead of leading with her offer, missing an opportunity to position the value of the trade.
• ❓ Mira asks a checking question, showing a lack of conviction, which invites resistance from the customer.
• 💸 The customer indicates that the price is still too high, prompting Mira to lower it without positioning any rationale, making it a concession rather than a trade.
• 🗣️ Instead of remaining silent or asking for something in return, Mira immediately lowers the price again, further weakening her position.
• 😬 Mira becomes uncomfortable with silence, which leads her to reduce the price without extracting any commitments or concessions from the customer.
• 🔄 The customer expresses discomfort with the volume commitment, and Mira fails to effectively explain the value linked to that commitment.
• 📉 Mira's responses become weaker as she doesn't ask questions or provide additional rationale, missing opportunities to strengthen her negotiating position.
• 💬 The customer suggests splitting the difference on volume, but Mira continues to lose control of the negotiation by not negotiating a fair trade.
• 🤔 Mira agrees to consult her company for an exception, which shows a lack of confidence in the terms she originally proposed.
• 🚫 In the end, Mira has made multiple price concessions without securing anything in return, leading to a loss of control over the negotiation.

Q & A

What is the main issue in the negotiation between Mara and Alex and Jose?

The main issue is that Mara is struggling to effectively negotiate the price of Blue X and secure a volume commitment from the customers, Alex and Jose.

What is the initial demand from Mara for an annual volume commitment?

Mara initially demands an annual volume commitment of 4,800 units.

What is the proposed price reduction for Blue X if the customers agree to the volume commitment?

If the customers agree to the 4,800 units volume commitment, the price of Blue X would be reduced from $20 to $18.

Why does the customer resist Mara's initial offer?

The customer resists because the price is still higher than what they wanted, and they express anxiety about the volume commitment.

What is the lowest price Mara is willing to go as per the script?

The lowest price Mara is willing to go is $17.80.

What is the mistake Mara makes when she responds to the customer's comment about the price being too high?

Mara's mistake is that she jumps to reducing the price without asking for something in return, which turns the price reduction into a concession rather than a trade.

What does the customer propose as a counteroffer in terms of volume and price?

The customer proposes a counteroffer of 4,000 units at a price of $17.

Why does Mara's response to the customer's counteroffer seem weak?

Mara's response is weak because she does not ask a question or position additional rationale for her offer, and she misses the opportunity to link customer value to her trade.

What is the final counteroffer made by the customer in the negotiation?

The final counteroffer made by the customer is 4,400 units at a price of $17.40.

Why does the customer say they cannot commit to the volume levels proposed by Mara?

The customer states they cannot commit to the volume levels because it makes them anxious and they are not convinced by Mara's rationale or offers.

What does Mara decide to do at the end of the negotiation?

Mara decides to go back to her company and ask for an exception to the pricing and volume commitment.