Government research has shown that when negotiations without a guaranteed resolution are required, establishing a shared sense or urgency can substantially improve the process, completion rate and overall satisfaction for each party.
Retail and merchandising typically involve undergoing routine negotiations with a number of suppliers throughout the sales cycle. Negotiating pricing and promotion terms for consumers is becoming increasingly prominent in this sector. Learning how to subtly instill a sense of urgency to close the deal, without jeopardizing negotiations, is now a required skillset for most competitive retailers.
Master Retail Negotiations
Retailers’ success has a strong correlation with their ability to negotiate the most favorable pricing terms for the inventory sold to consumers. Inquiring about how to qualify for vendors’ incentives is an effective strategy for getting a discussion of concrete terms on the table. Mentioning the performance of direct competitors or the viability of potential alternative measures can also help raise the sense of urgency as well. Collaborating with suppliers to find a compromise that is advantageous to both parties is another way to help move negotiations forward. Putting the negotiated terms in writing can also help signal that the time to close the transaction has come. Involving the end-consumers in the negotiation pitch may also help pressure suppliers to close the deal swiftly. Monitoring execution in real time allows retailers to get the right information at the right time and be even more reactive.
Negotiate Marketing Campaigns
Negotiating the terms for a marketing campaigns’ promotional elements is another integral part of working with retail or merchandising. Promotion and merchandising negotiations are common for retailers involved with media buying or strategic media planning. Retail merchandising teams benefit from developing an understanding of supplier negotiation strategies and the impact culture can have on the negotiation process as well. Understanding the difference between integrative and disruptive negotiations can be instrumental for retailers attempting to identify how to raise the sense of urgency with a particular client. Effective negotiation skills are paramount for controlling costs when it comes to running email blasts, online promotions, contests, giveaways or on-air promotions.
Understanding the difference between integrative and disruptive negotiations can be instrumental for retailers attempting to identify how to raise the sense of urgency with a particular client.
Show Low Inventory Without Allowing Inventory to Run Out
One of the strongest testimonials to the power of raising the sense of urgency was a study conducted by the University of Alberta. Researchers discovered that consumers were often compelled to buy the next available item when the leading item is sold out. Shoppers often do this based on the fear that if the one item sold out, the next is most likely soon to follow. Customers also deduce that if the one item sold out, a similar product is likely to be a good purchase as well. Shoppers are nearly twice as likely to purchase an item when the flagship product is already sold out. Low stock of common items may be perceived as negligence, but a shortage of stock with newer items signals to consumers that they better make the purchase now while they still can.
Negotiate with a Sense of Urgency
Getting the other party to make a decision without being pushy is essential to negotiating effectively. By being tenacious in the discovery, evaluating the prospects needs and asking good questions, you can find a way to establish a sense of urgency without being overaggressive. Understanding the emotional motives driving the decision making process may provide useful insight as well. Identifying the decision criteria and how to make the transaction effortless for other party can help bring the deal to a close without delay.
Bringing the sense of the urgency to the negotiation table is all about understanding when the right time to close the deal is. Be bold enough to ask for the most desirable outcome and be flexible enough to discuss how a compromise can be mutually beneficial.