Dylan is a senior at UW-Milwaukee, double majoring in Marketing & Supply Chain and Operations Management. During his internship, he will be working closely with Salesforce. Dylan is passionate about diversity marketing and customer advocacy.
One of the most impactful lessons I have learned is the skill of negotiating. As noted business researcher Chester L. Karrass once stated in one of his most renowned pieces, “In business as in life – you don’t get what you deserve, you get what you negotiate.” Negotiation is truly more than just an act to reach an agreement; it is an art and a talent that can be incredibly hard to acquire.
The three stages of negotiation
Negotiation can be learned but is rarely perfected, and there are three stages to help financial advisors negotiate during their sales process in an efficient and effective manner.
Preparing is key to achieving the outcome you desire in a negotiation, and the majority of the process should happen in this stage. As a negotiator, you are going to want to know exactly what you are providing; therefore, financial advisors need to understand the ins and outs of the services that they can provide. Surprisingly, this can be a difficult task, as you never know how in-depth your potential client will go with questions.
The preparation process is similar to that of a job interview. You will want to research your client’s background and understand their financial position and capabilities. Understanding your client will also help you analyze the relative bargaining power between you and them going into the negotiation.
Establishment of objectives
When to negotiate bears on more than just an agreeable price. Potential prospects and customers are also seeking top-notch quality and service. You are going to need to establish an objective position in the face of the client by providing a best estimate of what a fair price would be that is also profitable for you.
In determining the objectives, you must take into account the processes that make up your service. Determining the hours of labor you will dedicate to the client and the price you will bring into the negotiation is the most crucial factor. Head into the negotiation with a firm goal that you are seeking to achieve.
The third stage allows your preparation and establishment of objectives to come to fruition. While meeting with the client, you can discuss each party’s goals and find a fair medium for both.
During the discussion, you will be looking for a few things. One practice you will want to maintain in all negotiations is detecting when the other party is dodging. You can practice this by keeping a list of questions you have for the other party, returning to questions they do not answer directly, and ensuring there is consistency in their answers or statements.
Having emotional stability allows for a higher chance for the negotiation to end satisfactorily; so advisors must be sure to avoid anxiety and anger. Allow yourself to be pragmatic and flexible in dealing with clients because practicing these steps will enable you to become a powerful negotiator.
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