Lesson 5: Selling Services

Selling services

At some point in your entrepreneurial journey, you would have decided exactly what you’re selling. Are you selling products or services?

Selling a service can be a lot trickier than selling a product simply because it’s intangible, and you might find it difficult to describe your service to prospects. You need to detail the benefits of your service, once again highlight the pains and gains with which you’re assisting your customer.

In this video, Christine Clifford provides four practical tips on how to sell the invisible – services:

Honing your negotiation skills

It’s a given that you will have to negotiate – and often.  Sitting down with a client to map out the intricacies of a major business deal can be daunting, so being prepared is essential. It’s also important to try and understand both sides of the table, and always consider: under what circumstances would your customer be willing to negotiate?  

Obviously, you can’t negotiate well unless you know what the other party wants and why, as well as how that interferes with what you want and why. This means you’ll need to follow some fairly common-sense advice:

  • Listen to the other party and consider their logic.
  • Clarify things you’re unsure about by asking how, why, where, when, and what questions.
  • Identify the key issues that are important to both sides as well as any personal agendas.
  • Identify areas of common ground.
  • Understand outside forces that might be affecting the problem – is the other party under time pressure, pressure from stakeholders, or anything else?
  • Keep calm and be assertive, not aggressive.
  • Don’t be afraid to say “no” when it’s reasonable.
  • Use verbal and non-verbal persuasive skills.
  • Know when to compromise, but only offer minor concessions at first.
  • Know the difference between needs, where you can’t compromise, and interests or wants where you can.
  • Agree to a deadline for resolution.
  • Make sure the final agreement is summarised and written down, and plan for alternative outcomes if you can’t reach agreement.

(University of Kent)

Let’s look at some more detailed tips for actually implementing a negotiation. If you want a successful negotiation, you have to understand exactly what your customer wants and needs. Why is that tricky? Sometimes even your customer won’t know what that is.

Step one, then, is asking questions. Ask “why” at least five times to get to the bottom of what the customer really needs.

“I need a car.” Why? “To get to work.” Why a car? “Because I like controlling my own commute.” Ask “why” a few more times and you may find that what your customer actually wants is a reliable ride-share system that allows them to work during their commute four days a week.

Next, make sure that both you and your customer have a list of wants. If you know exactly what you want, you can trade against what the customer wants. They get what they want, you get what you want.

When you’re making those trades, you need to ask: “Under what circumstances would you give me X?” Don’t ask if they’re willing to give you something – that’s a good way to elicit a knee-jerk “no”. Ask under what circumstances they’d give it to you. That gets them thinking in terms of what they’re actually willing to offer.

You can also ease the trading process by using “if you…, then I…”. If the customer does something, then you will do something that they want. This makes it clear exactly what the customer needs to commit to if they want to get what you’re offering.

Before you go into a negotiation, decide on your BATNA. BATNA stands for Best Alternative to Negotiated Agreement, and the short explanation is that this is the worst-case scenario. What happens if you don’t go through this negotiation at all? That’s your baseline, your worst-case scenario. If your customer doesn’t offer you something better than your BATNA, leave. On the other hand, any negotiated outcome better than your BATNA is probably better than no outcome at all.

Negotiation is never about a zero-sum game. It is possible for you and your customer to get exactly what you want and both be happy, so approach the negotiation with that in mind. Always start out with a win-win mindset!

When two people are negotiating a deal, do we really know what’s going on in the other person’s brain? The following video by behavioural economist Colin Camerer reveals just how badly we predict what others are thinking:

In closing, this quote from T. Harv Eker should drive home the importance of negotiation:

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