Successful sales depend on proper negotiations

The whole idea behind the business of negotiating with a prospect is to end up assisting the prospect in making a  “valued buy” decision, while at the same time making a successful sale for the property. Of course, we all understand that the process of negotiating should never be an adversarial situation where both parties argue over demands and concessions. A positive outcome of the discussion is more likely if it is approached as a problem-solving process through which both parties reach a mutually beneficial solution.

To prepare for negotiations, it is important for the property sales representative to carefully analyze a prospect’s position as well as the property’s position. This has much to do with how far away the prospect might be in making a “buy” decision. The closer they are (time-wise) to making a decision, the better the negotiating opportunity for the property. However, if it will be sometime down the road  when a decision is made, the prospect may be looking for more concessions because they have the opportunity to seek out other locations. The whole idea is for the property sales representative to gather important information early in the sales effort that will prove useful in negotiations, such as:

  • Ultimate decision maker: Does the person negotiating make the decision for the group?
  • Decision date: Will the event be soon or sometime in the future?
  • Key issues: What do the prospects think is most important?
  • Budgets: Prices paid at earlier events.
  • Competitors: What other properties are being considered?
  • Special needs: What concessions were provided by previous hosts?
  • Past problems: Know what went wrong at the last event.

Although all this information may not be available in advance of the discussion time with a prospect, it is important to be able to secure this information so that the sales representative is prepared for negotiations. Be careful about not getting into a negotiation session too early in the sales effort. Sometimes that develops into concessions being made too soon. Also, it is important to understand that concessions are a “give-and-take” situation, such as “if you do this, I will do that.” Be prepared to make appropriate concessions or suggest reasonable alternatives. Do not do too much talking during the process. Ask good open-ended questions and be a good listener. You never know what information one can pick up by listening well. Tips garnered in the discussion may be very useful in negotiations.

Understanding the property’s position is the other important part of the process. The big question is: How important is this business to the property? Consider whether the group will provide additional revenue via food and beverage, shopping at the property, use of spa or recreational facilities, early arrivals or stay-overs. Will it offer favorable public relations for the property or multiple-year contracts? The list can go on, but the idea is to be sure that what you are seeking is profitable business for the property.