Sales Negotiation Techniques - Trade-Off and Trial-Balloon Tactic

Of all the sales negotiating tactics, the trade-off is used most often. Trad­ing is the "heart and soul" of negotiating, and, for that reason, it may be the most important tactic. Trade-off basically means making an offer (issue) in return for the customer's concession(s). It's a technique of give-and-take, voluntarily substituting and bargaining one issue for another.
Here are some critical trade-off guidelines you should use in your negotiating sessions:
1) Avoid making concessions too early in the negotiation. When you begin too early, it gives the customer the impression that you will "give" and keep giving, and that will put you under pressure.
2) Concede slowly when making trades. The reason is the same as above; conceding too quickly puts you in a weak position and gives the customer a psychological advantage.
3) Concede in progressively diminishing increments. This is important because it enables you to move slowly in successively smaller steps toward a mutually satisfying position or agreement. For example, if you have to concede a discount of 2 percent on your first offer, next you could possibly go to 3 percent, and then to 3 1/2 percent, etc.
4) Concede in small increments; beware of big jumps that will encourage the customer to make big requests.
5) Don't be the first to make a major concession, since this again gives the customer a psychological advantage. On the other hand, you gain an advantage by being the first to make a minor concession-this indicates a positive, flexible attitude, a willingness to bend and work with the account.
6) Finally, don't concede too much as a deadline approaches. Having parameters in mind will protect you from being pressured by deadlines-artificial or real. You may also wish to use the subtactic of negotiating the deadline itself, and postpone or delay it.
Trial-Balloon Tactic Trial balloon is a method of presenting the customer with options by prefacing your offer with the words "what if . . . ?" You don't commit yourself, but you bring the item up for discussion and, at the same time, give the customer the first right of refusal. This tactic enables you to constantly test the account, to assess and read interests and positions each time you put up a trial balloon. Obviously, you have to listen to re­sponses and use your other sales skills to evaluate each response. To em­ploy this tactic effectively, avoid using it too often in a specific negotia­tion, and alternate your "what if...?" phrases with words like: "Suppose I could..." or "I'm not sure that it can be done, but how would you react if we could... ?"
An account manager for a major beer distributor supplies a classic example of the trial-balloon tactic. He had been struggling for some time with one of his large package store accounts to set up major dis­plays, but the customer insisted it couldn't be done during high-traffic hours. Unfortunately, the store was scheduled for delivery at the height of its rush period. Finally, using the trial-balloon tactic, he said, "What if I can get our delivery routing changed to . . . ?" When the customer said yes, the account manager convinced the routing manager to find a suitable window for delivery and got his permanent display space.