Good negotiation skill is the ability to engage in discussions with stakeholders to achieve mutually beneficial outcomes. It involves effective communication, persuasive arguments, and the art of finding common ground to resolve conflicts and build positive relationships. Potential outcomes of negotiation include reaching agreements, settling disputes, and finding win-win solutions.
Key elements involved in negotiation include:
BATNA (Best Alternative to a Negotiated Agreement): BATNA refers to the best option available to a party, if negotiations fail. Knowing one’s BATNA empowers negotiators to make informed decisions during the process.
Reservation Point: This is the minimum acceptable outcome for a negotiator. It represents the point beyond which the party is unwilling to continue negotiations.
ZOPA (Zone of Possible Agreement): ZOPA is the range where both parties’ acceptable outcomes overlap. Identifying the ZOPA is crucial for finding potential areas of agreement.
The negotiation process typically follows these steps:
1. Preparation: Each party assesses their interests, needs, and potential concessions. Understanding the other party’s objectives and BATNA is vital for effective preparation.
2. Opening: Negotiators present their initial offers and positions, stating their goals and expectations for the negotiation.
3. Bargaining and dialogue: Parties engage in back-and-forth exchanges of proposals, counteroffers, and concessions. Active listening and effective communication are essential during this phase.
4. Exploration of options: Creative problem-solving is used to explore potential solutions that satisfy both parties’ interests and objectives.
5. Reaching agreement: When both parties find a mutually acceptable outcome within the ZOPA, an agreement is reached, and terms are formalised.
6. Closure: The negotiation concludes with a clear understanding of the agreed-upon terms, followed by implementation and monitoring, if applicable.
In negotiation, you should seek to achieve the following objectives:
Reaching agreements: The primary objective of negotiation is to reach agreements that satisfy the needs and interests of both parties involved. It involves finding a middle ground where both sides feel they have gained value.
Creating value: Effective negotiation aims to create value for all parties involved. It should go beyond mere compromise but seeking to identify opportunities for mutual benefit.
Preserving relationships: Negotiation is often conducted with stakeholders, with whom the sales leader maintains an ongoing business relationship. Preserving these relationships is crucial, even during conflicts, to ensure long-term collaboration.
Resolving Conflicts: Another key objective of negotiation is to resolve conflicts and disagreements in a constructive and respectful manner. It aims to find resolutions that address the root cause of the conflict.
Maximising outcomes: Negotiation seeks to maximize outcomes for both parties, ensuring that each side gains as much as possible while being mindful of the other’s interests.
However, the most desired outcome for the negotiator is achieving a “win-win” situation, where both parties feel satisfied with the agreement reached. In this scenario, the negotiator has successfully advocated for their interests, while also considering the needs and concerns of the other party. A win-win outcome strengthens relationships, promotes trust, and fosters a positive business environment for future collaborations.
The following are examples of things that can be negotiated in pharmaceutical sales management:
1. Product pricing: Negotiating with purchasing departments or distributors to determine competitive and mutually beneficial product pricing.
2. Promotional opportunities: Negotiating with healthcare facilities to secure opportunities for product presentations and medical education sessions.
3. Contract terms: Negotiating favourable contract terms with healthcare providers, distributors, or partners to ensure a balanced and beneficial working relationship.
It is no over-emphasis to state that negotiation skills are vital in pharmaceutical sales management, as they enable sales leaders to navigate complex business relationships, secure favourable deals, and maintain strong partnerships. Whether negotiating with healthcare providers, distributors, or internal stakeholders, effective negotiation fosters trust and promotes a win-win approach, leading to sustainable business growth.
Potential benefits of having excellent negotiation skills:
Negotiation skills allow sales leaders to secure agreements and partnerships that benefit both parties, such as gaining formulary inclusion for medications or collaborating on educational events.
Conflict resolution: By adeptly negotiating conflicts, sales leaders can address challenges and maintain positive relationships with customers, sales-team, co-workers, superior ensuring ongoing support and brand loyalty.
Effective negotiation establishes trust and credibility, leading to long-term partnerships and increased customer retention.
Negotiation enables sales leaders to optimize resource allocation, ensuring the team focuses on high-impact activities that drive results.
Strong negotiation skills provide a competitive edge, allowing pharmaceutical companies to outperform rivals in securing valuable contracts and market opportunities.
By mastering negotiation skills in pharmaceutical sales leadership, sales leaders can drive successful collaborations, maximise market opportunities, and achieve sustainable growth for their teams and organisations.
Tunde Oyeniran, B Pharm. MBA, a sales/marketing strategist, selling/sales management trainer and personal sales coach is the president of the Society for Pharmaceutical Sales and Marketing of Nigeria and lead consultant, Ekini White Tulip Consulting Limited, Lagos. We deliver training, recruitment and field force management solutions. Feedback Channels: 080-2960-6103 (SMS/WhatsApp) /firstname.lastname@example.org or check out https://fb.me/EkiniWhiteTulipConsulting