Communication and Negotiation Skills

Scenario: Negotiating with an Aggressive Customer you Need to Keep

(Total Word limit – 3000)

Client: ‘We need to talk. I can get your product now for half the amount. I can’t keep paying out when I can get the same elsewhere for less! I hate being ripped off!’

You: ‘Wow! I am sorry! I am really surprised by this. We have a long history. We’ve been supplying you for seven years now and I’ve bent over backwards to keep this contract going!’

Client ‘The other company is even throwing in a free service contract. It’s time to face it, you are no longer competitive!’

You: ‘I’m really shocked. I thought this was a good deal and I had maintained this year’s price because of our long relationship. Our overheads have rocketed post Covid-19 and we have had to pass this onto our clients’.

Client ‘Okay – drop the price by 30% and I will give you it. We are all in a hard position and with this cut I will try to increase the volume ordered.’

You: ‘If the order detail is to be changed, I will need to contact the Area Manager. He is notoriously tough and I had to speak to him already to get the price I’ve offered you!’

Client: ‘You are wasting my time. I thought you had the power to make a decision on my contract. Turns out I’ve been dealing with someone who can’t appreciate a serious bid’.

This is a challenging scenario for you. You have invested time and energy into nurturing this business relationship and it took a significant period for the client to trust you. You have done everything you were taught to do in sales and kept the communication friendly and genuine, hoping to maintain the relationship in the long-term. Keeping customers is so crucial to your business model. Now, he is angry, playing hard-ball (an Analyst in the 16 Personalities type indicator) and you have no option but to let him erode your company’s slim profit margin. You either do the business unprofitably or lose the contract in its entirety.

Companies that rely on long-term customer relationships need to avoid win-lose situations like this. Even if the sales pitch has been excellent and well thought out, customers can make outrageous demands, knowing that they have nothing to lose in asking. You can always say ‘no’, especially since he is becoming personal and introducing emotions. However, how do you save the sale, protect your own interests and preserve the relationship?

You could decide to fight back but you know there is a competitor on the scene. It is tempting to walk away from an aggressive customer but that tactic will lose you more business as word gets out. Do you accommodate and compromise? Accommodation could present huge problems because a 30% discount will mean no profit for the company and no salary for the sales. Also, this means next time he can return demanding even more in future negotiations.

A compromise, in meeting him halfway may save a lot of time but neither party will be fully satisfied and it is not the prized win-win solution. A competitor who finds a creative way to satisfy both parties can steal the business from you.

What strategies would you utilize to achieve effectiveness, efficiency, and negotiating climate? What negotiating strategies and tools would you utilize to avoid failure? Explain in detail.

Conclusions: Which techniques could you use in your current organization?