Josh Christie is the VP of Marketing & Recruiting at D&L Transport
We often shy away from negotiation, chiefly because we think of it as confrontational. Of course, there are many Freight Agents that thrive on that confrontation. Perhaps that attitude stems from nearly constant problem-solving in moving freight from one place to another amidst the ever-present turbulence within the shipping industry.
But negotiation need not be confrontational. Instead, it needs to focus on solving problems, just as we do every day. Plus, that problem-solving needs to result in mutual benefit for everyone involved. This article focuses on the key negotiation principles and how to apply them to your work.
Negotiation Preparation — Do Your Homework
In our recent conversation with one of the industry’s leading consultative sales professionals, Dennis Bain, we learned the difference between a Good Negotiator and a Great Negotiator.
To start down the path of becoming a Great Negotiator, preparation is key. As with most things in life, you get your best start by being prepared with a plan in place. After all, you’re all set for anything that happens during the day or overnight to any of your client’s shipments. It’s no different with negotiation. Here are the keys to negotiation preparation, which all take place before you ever pick up the phone to speak with client.
- Research the Client. Find out everything you can about the client. That includes their background, where you can find connections with your own background to help build the relationship. Research their business results, previous brokers (or general logistics arrangements), and anything that can help you gain insight into their needs.
- Prepare Your Position. What are your goals? What aspects are genuinely non-negotiable, and what factors can be stretched to meet client needs? It would be best if you even ranked your priorities to serve as a touchstone during the negotiations.
- Build Your Opening. Determine what you can readily show your client to begin negotiations. Opening with your goals can help the client better understand your position and serve as an example for the open discussion you seek. It also establishes the first benchmark that will guide the rest of the discussions. It’s important to note these are goals and not solutions you’re presenting to the client. Presenting solutions to problems your client hasn’t expressed can set the wrong tone out of the gate.
- Establish Your Limits. It’s important to know your limits to negotiation. That sets the boundary of when you’ll need to walk away from the discussions. Winning a negotiation at all costs is not an intelligent tactic; it’s a surrender. It’s also best to prepare yourself for ending the discussion before it becomes adversarial and damages a business relationship before it even starts.
Tried and True Negotiation Tactics That Work
There are probably as many negotiation tactics as there are people and organizations. From the preparation above, you’ll have an excellent handle on your position and limits, along with a solid opening to launch the discussion. All that will also be grounded in deep research to build a better understanding of the client’s needs, wants, and restraints.
But even with that superb preparation, you’ll need to continue to explore the client’s requirements and particularly attitudes during the course of the negotiation. Here are our suggested tactics during any negotiation.
- Listen First, Talk Later. How many times have we wanted to take back words that we launched in the heat of the moment? Don’t let that happen to you in your negotiations. Instead, use active listening by encouraging, restating, and clarifying your client’s statements. It’s also wise to mirror your client’s language and perspective. This demonstrates understanding, empathy and can help you connect with the client on several levels.
- Search for Critical Needs and Interests. The client’s objections or concerns may mask their underlying needs and interests. Examine these closely with open-ended questions that get the client talking and you listening, learning, and discovering critical aspects of the client’s situation.
- Use Probing Questions to Surface Underlying Needs. There are many client needs that may be unexpressed or even unrecognized. Ask about time, end-of-month, quarter, annual deadlines, and goals. There may also be budget concerns and even trust issues. Asking “why” five times has proven to be a valuable technique to probe more deeply into objectives and concerns.
- Focus on Interests. It’s far more productive to focus on interests rather than positions and problems rather than people. It’s also important to use objective criteria. That means focusing on facts, not feelings. Another technique is to use specific numbers in the discussion, not ranges, which can lead to misunderstandings.
- Use Framing to Outline Mutual Goals. This is all about fully understanding and validating their objections. For example, in the client’s mind, it may be all about the cost. Yet, based on your listening and probing their complete list of concerns, you may discover that timing and trust are also crucial factors. Based on this information, you can then frame the agreement to take in not only cost, which may not be negotiable, to just as important aspects of timing and trust.
- Make the First Offer. Making the first offer essentially establishes the negotiation range. It’s like driving a stake into the ground from which all other offers are evaluated. Use what you’ve learned from all the above and your preparation around limits to establish this first offer.
- Build Counteroffers That Win. That first offer is, of course, followed by counteroffers. Now you’re down to the brass tacks of the negotiation. This back-and-forth, counteroffer to counteroffer, results in a desirable outcome that is satisfactory to both parties in the negotiation. This is where all your previous work pays off. Plus, it’s been proven that counteroffers make both parties more satisfied with the negotiation outcome.
Press the Pause Button — Be Ready to Walk Away
As noted earlier, prepare to walk away if things are not working. But before you take that step, be willing to press the pause button. Take some time away from the discussions to let the dust settle and for all the factors to sort themselves out with everyone’s thinking. Many people require time to process everything that’s been said; perhaps you or your client are in this camp.
In our interview with Dennis Bain, we uncover the instances that put Agents and Brokers in a Fight vs. Flight situation, and how to approach the interaction in any negotiation.
This is also a good time to document your discussion in writing. This can help everyone fully assess what’s been accomplished in the negotiations and to help start the next round of discussion. Plus, if you document the discussion, you can better frame the offer to be more attractive to the client.
Don’t let the pause last forever. It can be wise to set an expiration date for your current offer to help motivate everyone to resume negotiations. Or, better yet, decide to move ahead with your offer.
Stay tuned for our next article, Negotiation Part Two — Overcoming Objections and Finding Creative Solutions.
In the meantime, watch our full interview with Dennis Bain in the latest episode of Where in the World is D&L? | S2E6 to gain more insight on the topics of Strategic Selling and Negotiation Tactics.
Ready to Move Your Freight Agency?
No matter where you are negotiating with prospective or current clients, having a first-class partner on your side is very helpful. That should be a partner that brings years of experience, tons of expertise, and has the resources to back you up at all times. That’s D&L Transport.
For further insight into our Freight Agent program, check out our BETTERLIFE™ with D&L video series. We talk to our Agents and select subject matter experts to help you navigate the challenging world of the Freight Agent.
For still more, look at our Agent Opportunities page. You can also hear directly from our successful Agents. BTW. You can even take a test drive. Try using us for a few loads a week with no strings attached. Then, get in touch, and we can get started.
Call toll-free: 866.559.0203. Or complete the form at D&L Agent Requirements.
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