Brand-Building Negotiations

Many of my clients have improved their margins by as much as 5 percent in a year by strengthening the negotiating skills of their sales associates. And that has helped them build trust in their brand and prices. The fact is, you can make a sale while hurting your brand in the eyes of the purchaser. Improving how you negotiate can actually make customers feel better about shopping at your store even as you improve your margins.

First, learn to recognize the three types of bad negotiators.

The Reluctant Negotiator appears ill at ease offering a price accommodation. He or she may hesitate, stumble, break eye contact, or refuse to offer any accommodation even when it could advance a sale. The damage goes beyond losing a sale. Customers—especially long-standing ones—like to feel special. Accommodations for watches and luxury jewelry have been a way to recognize and reinforce customer loyalty. Not offering one to a loyal customer misses an opportunity to send the message, “You are special, and we appreciate your loyalty.”

The Confusing Negotiator leaves the client feeling uncertain. This may be a miscalculation in price or information that conflicts with something the customer heard elsewhere. For example, the customer may have been told no accommodations are being offered on a particular brand only to be offered a discount later. While the customer may appreciate the discount, she might wonder if a better accommodation might be had from a third associate. Such negotiators also generate confusion by offering a discount without a reason. Confusion sows the seeds of mistrust. Mistrust of prices harms your brand and the integrity of your store.

Perhaps most destructive is the Spontaneous Negotiator, who is much too quick to offer an accommodation, sometimes even before the customer has expressed a clear interest in an item. The customer points to a piece of jewelry, and before hearing a word the sales associate proclaims, “If you buy today I can offer you a 10 percent discount.” That sends a message that “even I, the sales associate, don't trust these prices.” If your own sales associates don't trust your prices, why should clients?

The following suggestions from our “Brand-Building Negotiations” training program can help you improve negotiation practices.

Clarify accommodation policies. Mixed messages generate distrust of your prices. Make sure your accommodation policies are clear and well communicated to every sales associate. Review them during sales meetings.

Don't signal that accommodations are a way of life. Signals include calculators in view at every sales station, offering discounts before clients ask, and stating discounts in round percentages (e.g., 20 percent off) rather than dollars saved. Eliminate signals that say, “Everyone who enters here should expect an accommodation.”

Never discuss price before value. The more a person values an object, the more he's willing to pay. Always discuss and reinforce how a piece of merchandise meets the client's needs or dreams before discussing price.

Avoid negotiating with yourself. You do this each time you offer a discount before having a clear idea of the client's interest in a piece of jewelry or what the client believes to be a fair price. Don't guess; ask.

Provide a customer-centric reason for accommodations. They should be a way of doing business, not the way. They should be special events to build customer loyalty. You can say, “Because you have been such a loyal customer …” or “Because this piece is such a perfect match and I want you to become a loyal customer …”.

Make more sales and increase trust in your prices through brand-building negotiations.