Food Service Negotiation Strategies – Part 1

You don’t have a choice about whether you will negotiate or not. The choice is about whether you negotiate well or not.

Idea #1 Have plenty of prospects

The best negotiators in the business are usually the DSRs with more prospects than they can handle. It stands to reason, if the salesperson is desperate to take an order, he or she will be more susceptible to pricing pressures. When the DSR knows that other orders will be written from many other customers this week, he or she is more likely to maintain price and gross profit integrity.

Here’s how this works; you are working on five active and three new prospects. Among the five active accounts are two who should close within 2 weeks to a month. Your experience with these prospects indicates they will be buying $2,000 to $2,500 drops each week. While taking an order, one of your customers says, “I can get that Applewood Smoked Bacon for four cents a pound less from your competitor.” How will you respond?

Now, let’s change the situation: You haven’t had much luck with your prospecting. You’ve been busy trying to maintain your existing customers. You had a couple of prospects, one closed and another one told you he was very busy the last time you dropped in last month. Again, one of your customers says, “I can get that Applewood Smoked Bacon for four cents a pound less from your competitor.” How will you respond?

Knowing you will have new business to replace any potential lost business will change your negotiation position.

Idea #2 Prepare

Do your homework. The more you know, the more effectively you can negotiate. It should be no surprise when a customer asks for a better price. Know what you plan to do when the customer asks for a price concession. Think about your options before you need to do anything. For instance, if you know the customer has the storage space, you could agree to a price concession if the customer will agree to take three cases of 5.3 oz. seasoned beef patties instead of the normal order of just one.

Think of options you can negotiate, before seeing the customer. You may not need them on this call…but maybe the next.

Idea #3 Know your “Walk Away” Position

The DSR must know his or her bottom line limits to price concessions or “deals.” Regardless of the potential sales revenue, at some point the “deal” is not worth the price of the requested concessions.

In some negotiations, the DSR will be faced with the customer who is just asking too much. The challenge is to know when you have reached that point and before every negotiation, the professional should know the limits…the “walk away positions.” Again, having plenty of prospects makes this strategy much easier. This not only strengthens your position, it will also win you some respect.

Idea #4 Use concessions to get what you want

Professional negotiators know what they can and what they want to bargain with. Predetermined concessions allow the negotiator to find solutions to setbacks and avoid impasses.

Example #1

Customer: How much is your dumpster cleaner?

DSR: $37.50 per case of 4 bottles @ 32oz each equals 128 oz of product

Customer: I only pay $35.00.

DSR: I guess we could match that.

OK, the DSR kept the business. That’s good right? Not so fast, Sparky. What did the customer learn from this experience? He or she learned that the DSR’s prices are subject to negotiation…all of the DSRs prices are subject to negotiation. So, he has an “obligation” to challenge (perhaps all) prices from this DSR. He further learned not to trust the DSR because if he could be charging $35.00 now, why wasn’t he charging that price all along.

What would happen if the DSR was prepared to use a concession technique?

Example #2

Customer: How much is your dumpster cleaner?

DSR: $37.50 per case of 4 bottles @ 32oz each equals 128 oz of product

Customer: I only pay $35.00.

Consultant: I might be able to get my price reduced, if you would give me the table top sanitizer and degreaser business.

What did the customer learn from this experience? He or she learned that the DSR’s prices are not easily negotiated, that the DSRs prices are firm unless the customer was willing to make some concession. In this example, the DSR did not offer to lower the price to $35.00. The commitment was to try to lower the price if more business was added to the chemical order. The DSR also implied that he “might” be able to do something, indicating that someone else would have to give approval.

Idea #5 Practice

Like anything else, getting good at negotiating requires practice. Develop your confidence by practicing whenever you have the chance, whether it’s at a flea market, or at home when one of the kids wants the newest version of some computer game. Now, that can backfire on you. I asked one of the grand kids to come over and sweep pine needles and leafs off the roof recently. He acknowledged that he could certainly take care of that for me if I could take him to a music store in a neighboring community. Good for him.

Get used to negotiating in your daily life; then when you have to, in an important business situation, you can negotiate comfortably and confidently.

The other important issue here is majors vs. minors. Baseball players spend time in the minor leagues before reaching the majors. You and I should do the same thing to gain confidence. Practice negotiation skills with smaller customers on minor issues before dealing with major customers on major issues

Idea #6 The Details Count

In food service sales, we all understand the importance of details. It’s the difference between the customer getting six cases of four-ounce portions or four cases of six-ounce portions.

During negotiations, the DSR who relates a detailed offering is usually in the strongest position. Think about this, we sell cases of product but our customers are buying and selling servings of product. It’s an important detail. The customer is buying cases of head lettuce by the pound but serves portions. When we look at how many servings he gets out of the case, we can discover his real portion cost. That’s a critical detail if you are asking him to start using pre-cut salad mix.

If you are attempting to introduce a new product, you need to know the details.

“Here’s the facts Mr. Customer, it’s $38.25 case. Portion cost is.56. Now if you sell 100 orders a week at a your food cost, you will have a gross profit of $315 or $1,260 per month.”

If the customer is asking for a concession, you may offer a discount for multiple case purchases. In that situation the cost would drop. We explain that in terms of portion cost, “Mr. Customer, that discount would lower your food cost by.035 per serving, saving you almost $4.00 a month.”

Bottom line, take charge of the details or loose to generalities like “It sounds too expensive to me.”

Idea #7 Don’t appear needy.

My neighbor has a ferocious dog in his back yard. No matter how many times I’ve told that dog, I’m not intimidated by him, the dog knows better and keeps barking and attacking the fence People are like that, they can smell desperation and fear. They can read your poker face and many will try to get you to make a large a concession or give a discount that’s too deep.

We are vulnerable to this when sales artillery rounds are slamming you from all directions. The trucks are running late, they delivered the fish to the steak house and the steaks to the seafood caf and the credit department wants to talk to you about a bad check from your biggest customer.

You walk in looking and feeling weak and vulnerable. Some customers will want to take advantage of your misfortunes and open up negotiations on the 40 cases of fries they buy each week.

One answer is to, walk in feeling better, change your state of mind. I have certain music that will consistently put me in a better mood. Some DSRs I know have visualization exercises they use. Others will briefly drop in on favorite clients, the people who always love to see you. These are the places with the waitresses who think the DSR hung the moon. Find a way to change your mood before you make the next call

But remember, the first key to keep yourself from appearing desperate and vulnerable, is to maintain plenty of prospects.

Idea #8 Don’t take it personally.

The sales ego is actually a pretty thin veneer for most of us. We like to please people and we like being liked. Therefore, when our proposals and negations are rebuffed, we often take it personally. Once your emotions are involved your ability to perform, to think quickly with sound judgment will be impaired. In these situations it’s all too easy to say something that can fracture a relationship or damage your credibility.

It’s one thing to talk about keeping emotions out of the equation but it’s actually easier to plan for the negative scenario and remove the negative upfront.

I learned one classic technique while working with Susan Perry, a DSR in St Louis. She was making a major proposal to a customer she had served for sometime. The negotiation reached a conclusive impasse and we rose to leave. Susan turned to the owners of the five-location chain and said, “Guys, I’m really sorry I failed to do enough preparation for this meeting. You know I wouldn’t make a proposal like this unless I was absolutely confident it was the right thing for you to do. So, I’m really sorry I let you down.” The customer stopped her from leaving.

Twenty minutes later we left with the entire order. I remarked that her emotional commitment showed real dedication to her customer. She replied, “Yeah, it works most of the time.”.

Idea #9 Don’t force it.

Buyers wounded by twisted arms seldom forget. Aggressive negotiations and “pushy” tactics rarely produce anything but fractured relationships, mistrust and frustration. I have seen situations where a DSR gained a short-term sale but in the end it seldom works out well. Most often, the customer that feels he or she was pressured into “buying” will spend a lot of future energy finding reasons why the product does not work.

Some customers, sensitive to pressure, will not buy even after they recognize the negotiation is in their best interest. They may even buy the same product from a competitor once the offending DSR has left.

Finally, we recognize that there are some buyers who put off decisions or who resist change for the sake of the living with the familiar. The well-prepared DSR will anticipate the reluctant buyer. It is the DSRs responsibility to be ready with alternatives and concessions that move the customer off of the fence and help him or her make the right decision.

Idea #10 Just Ask for the Order.

For many DSRs, negotiation and closing are particularly stressful. They feel uncomfortable asking for things they want. But if you don’t ask, you don’t get!

First, let’s face it, negotiations is not really a life or death situation. Win or loose nothing much will change, the sun will go down and come up and you will pay taxes even if it doesn’t. Of course, you want to win them all but it’s amazing how much better you will get when you recognize that it can be fun.

Second, we can look at negotiations as a sport or a game. The more you play the better you will get. Do you remember when you first started learning how to drive the family car? At first, it was intimidating but the more you practiced the easier it became. You had to remember all the rules of the road and learn how the car responded to your commands, but soon you became comfortable with the whole experience. Using negotiations skills can become just as natural after you have played the game for a while.

Finally, recognize that your job is to help the customer grow and become more profitable using your company’s products.

As you incorporate negotiation skills into your daily selling efforts, you will build the client relationship and win terms, prices and deals that are advantageous for you, your business and the customer.

Wedding Favor Boxes Offer a Nice Presentation

What are the usual things that come to your mind regarding weddings? A couple in love exchanging vows, gorgeous bouquets of flowers, and a beautiful wedding dress are the common images. Your wedding day is one where you want everything to be smooth and organized as well as elegant and memorable. When it comes to memories, a great way to remind your guests of your special day is with favors and wedding favor boxes.

You might be wondering about such boxes. Boxes may seem quite practical, but they really can be fancy and decorative and many are made with an artistic look and touch. They are no longer plain and simple things. In fact, specialty boxes range from home and hardware use to wedding favors. Wedding favor boxes enable items of your choice to be presented in whatever manner that satisfies you and your wedding theme. Whether the wedding will be laid back and casual or stylish and elegant, you can incorporate these boxes to fit your specific needs. The opportunities and options seem virtually endless. It really is all up to you and you will need to decide what is right for your special day.

Classically, wedding favors are given out in square boxes that are perfect for holding a variety of gifts and delicacies. Chocolates, candies, and mints can commonly be found in these. However, because of the wonderful evolution of wedding favor boxes, the diverse tastes of so many couples can be suited by the many great box options. You certainly do not have to stick with a classic square or rectangular box. Why not choose a woven, embossed, or pillow favor box?

On the other hand, classic is not a bad way to go, especially for more traditional brides. You can just add a small and delicate touch of creativity for the perfect look. This way you can be original and classic at the same time!

The bride and groom are free to choose from a wide range of beautiful colors and decorations. These of course are selected according to your personal tastes and preferences. Decorative boxes that you select can express to your guests some of your personality as individuals and as a couple as well. With the wide variety of favor boxes available on the market, there are some important factors that should influence your ultimate choice. For example, you should definitely take into account your budget and how suitable the favor box design is for your wedding theme.

These days, wedding favor boxes not only serve as a way to stylishly present gifts, but they also personalize a wedding by saying “thank you” to your guests. Furthermore, they can show and express sincere gratitude and appreciation from the couple. In fact, regardless of what is distributed as a gift, it is important to package it in a nice and unique wedding favor box. This can surely generate some hype from your guests and they will be both more tempted and excited to open up your special gift to them.

Negotiating the Real Estate Contract

Negotiation is the process of communication back and forth in order to reach a joint agreement. There is no “one size fits all” strategy of negotiating a real estate contract. Many of our clients have been very experienced negotiators, and we have learned a great deal from them, as well as from books on the subject. We would like to share some of our thoughts on negotiating with you:

What do we want to achieve in a negotiation?

The best negotiators bring an attitude of high expectations to the table. They are hard on the problem and soft on the people. Letting the seller know what you need, in a clear and reasoned way, is the first step toward getting it. We try to keep all of these goals in mind:

Enable you to move into your new home.

Obtain the lowest possible price for the property.

Close within an acceptable time frame.

Solve any repair issues fairly.

Have no title, survey or loan problems, or solve any that do arise.

Develop a good working relationship with the seller.

Have no future problems after closing.

Is a cooperative or combative approach more effective?

Our experience shows that the cooperative style is the most effective and efficient way to complete a transaction. Professional negotiators usually try to preserve the relationship between the parties, and work together to resolve problems. The goal is not to reach an impasse in which neither the seller’s nor the buyer’s needs are met. Buyers sometimes submit a letter to the seller describing why their house is not worth what they are asking, pointing out deficiencies, etc. This almost always backfires, and starts the negotiation off with a defensive seller. It is best to anchor your price to the marketplace, while remaining very complimentary of their home.

How do you work with a combative strategy by a seller or agent?

The combative style is sometimes encountered. This strategy includes: negative comments, emotional statements, table pounding, threats to walk out, ego involvement, and stated positioning. Creative solutions and trade offs are not as likely to be found in this environment. Working with a combative style negotiator requires a considered approach:

Do not respond emotionally. An angry or defensive response will escalate the negotiation into a no-win battle.

Do not argue. Arguing usually positions them more strongly and drags the negotiation process off course.

Do not ignore their arguments or statements. Listen carefully, but do not accept or reject.

Firmly anchor pricing and other terms to outside data. Show that the price has not been chosen arbitrarily.

Reduce misunderstanding by following up with written summaries of discussions.

Do not allow hazy or unclear proposals to stand.

Offer some “wins” on some of the terms. Face saving is very important.

Look for ways to meet their underlying interests.

Remember that they may have a beautiful home that satisfies the buyer’s goals.

Is every point in the contact negotiable?

Yes. However, one of the most effective means of coming to an agreement is to rely on consistent standards or norms when possible. For example, it is common practice for the seller to pay for the title policy and for the buyer to pay survey cost. Using accepted standards prevents buyer and seller from haggling over every point. Working within the accepted “norms” for our area helps to legitimize offers, and focus the negotiation on just a few points. On the other hand, all the points in an offer can be used to help structure the deal. They offer trade-off opportunities for both parties to get what they want from the negotiation.

The value of trust in a negotiation cannot be overstated. Most people are fair minded and reasonable. They respond well to respectful treatment and to having their concerns heard. If the seller feels that the buyer and agent are acting with integrity, their attitude will be much more cooperative. Contract negotiation is a sensitive area, and anxiety can be high. The buyers may have had an unpleasant past experience with buying a home. The seller may be under pressure, with future plans at stake Acting with integrity does not mean that all “cards have to be put on the table.” It is not proper to discuss personal issues that affect the buyer, such as your financial ability or urgency to move in. It is valuable to develop rapport because trust increases your leverage. Here are ways:

Listen and understand what the seller has to say.

Express appreciation for the seller’s home, gardens, decorating.

Respond within a reasonable time to counter offers.

Reassure the seller of your ability to close.

Reveal some personal information about yourselves.

Finding common ground with the seller can be a very powerful tool in the event of multiple offers. I can think of several instances in which sellers selected their contract for very personal reasons. (The family reminded them of themselves when they moved in with young children years before. Or, they were both of the same religion. Or, the new owners would care for their gardens.)

Understand your leverage.

The more we can find out about the seller’s needs, the better chance we have to find solutions to negotiation hurdles. We will be able to offer information or concessions that appeal to the seller’s deepest concerns. Obviously, if the house has been on the market for 300 days, you have a lot more leverage than you would with a brand new listing. If their time frame is immediate, and you can meet it, you have some leverage. If they have multiple offers, you have very little leverage!

How much under list price should you offer?

Buyers usually offer less than list price, unless it is a strong sellers market. There is no standard percentage “under list price” that can be used. A market analysis will show recent sales for the neighborhood, which is the best way to establish the offer price.

It is usually counter-productive to offer so low that the seller will automatically reject the offer. This will set a negative tone, and may result in an emotional response from the seller.

What if we have a multiple offer situation?

Occasionally the seller receives more than one offer on their property. The Austin Board of REALTORS┬« has a policy that allows two options: disclosure to all parties that multiple offers have been received, or disclosure to no one that there are multiple offers. We prefer disclosure to all parties. However, the listing agent and seller will make the decision as to how they will handle offers. By simply disclosing that there are multiple offers, they are not “shopping” your contract. Shopping occurs when the seller discloses the terms of an offer to induce a buyer to submit a better offer. This can result in major distrust of the process by the parties, and the likelihood of loss of the buyers.

Usually the procedure is to notify each party that multiple offers have been received. Each party is then given the opportunity to raise or adjust his offer by a certain time. After that time, the seller is free to review all offers and choose one to work with. They are not obligated to choose the “first” offer that came in. The selected offer may be countered, or accepted as is.