8Four Levels of Sales Negotiation
There are four levels of sales negotiation that impact the parameters under which the parties negotiate. Negotiation strategy shifts as the complexity and risk of the negotiated outcome to the parties increase.
Transactional
Transactional negotiation is basically haggling over a price. Preserving the relationship is not as important as preserving your price and margin. It’s the type of negotiating you do when buying a car or an antique at a flea market.
Transactional negotiation is typically fast and furious. It’s easy to walk away if the value is too low or the price too high. In transactional haggling, the emotional motivation to do a deal takes center stage. The person who wants the deal the most will make the most concessions.
- Low risk.
- Low to medium deal size—in some cases, such as high-volume commodity transactions, the deals may be large.
- Price is the only issue at stake.
- Relationship preservation is secondary to winning and getting a deal done.
- A contest of emotional will and discipline.
Value-Add
Value-add is how companies change the shape of perceived commodities. Value-add negotiation includes both price and the terms and conditions for limited service delivery or add-on value like set up, installation, warranties, ongoing maintenance, etc. For example, if you were selling a piece of equipment, you might add on configuration and testing as part of the package.
The sales cycle is usually short for value-add sales. Typically, ...
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