Sales Negotiation Flashcards

What is the 'zone of possible agreement' (ZOPA) in a negotiation?

Answer: The range between each party's reservation price where a mutually acceptable deal can be reached

ZOPA is the overlap between the seller's minimum acceptable outcome and the buyer's maximum willingness to pay — where deals actually happen.

In negotiation, what does 'trading on differences' mean?

Answer: Identifying areas where parties value things differently and exchanging what is cheap for you but valuable to the other party

Trading on differences creates value by exchanging items each party values differently — giving away what costs you little but matters to the other side.

What is the risk of making unilateral concessions without asking for something in return?

Answer: It signals that your original position was inflated and encourages the customer to keep pushing for more

Unilateral concessions train the customer to expect more movement, undermining your credibility and eroding margin unnecessarily.

Which tactic involves a negotiator claiming they need to get approval from a higher authority before agreeing?

Answer: Limited authority

The limited authority tactic slows negotiation, reduces pressure on the negotiator, and creates room to revisit concessions already made.

What is a 'package deal' strategy in sales negotiation?

Answer: Bundling multiple terms (price, delivery, payment terms, support) into a single proposal to create flexibility and avoid item-by-item negotiation

Package deals prevent the customer from cherry-picking only the most favorable terms and allow the seller to make trade-offs across multiple variables.

When a customer uses the 'bogey' tactic, what are they doing?

Answer: Claiming a certain issue is a major problem for them when it is actually a minor concern, to gain concessions

A bogey is a pretend constraint used to extract concessions on a term the customer does not actually care that much about.