Sales Negotiation Process Tips
Does your sales process incorporate these best practice tips? Learn how to improve your closing rate and your sales price without giving a thing away.
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How many times have you heard:
- “You’ve got to lower your price by 10% or we will have no choice but to go with your competition.”
- “You will have to give an exception to your policy if you want our business.”
- “I know that you have good quality and service, but so do your competitors. What we need to concentrate on here is your pricing.”
- “I agree that those special services you keep bringing up would be fine, but we simply don’t have the funds to purchase them. Could you include them at no extra cost?”
Every time you hear a statement like these, you’re in the middle of a difficult sales negotiation process. How you manage that negotiation will determine whether or not you close the sale and how profitable that sale will be. In order to give you a real edge in your sales negotiations, I have set out below some key points taken from my Negotiation Dynamics® seminar.
Don’t Believe Everything You See and Hear
Part of a good salesperson’s skill is to learn to read people and situations very rapidly. However, when it gets down to negotiating, you have to take everything you see and hear with a grain of salt. Buyers are good negotiators, and thus they are good actors. You may be the sole person who has what she needs, but everything she does and says, from body language to the words she employs, will be designed to lead you to believe that unless she gets an extra 10% off, she’s will go with the competition. Be sceptical. Be suspicious. Test, probe, and see what happens.
Don’t Offer Your Bottom Line Early in the Negotiation
How frequently during your sales negotiation process have you been asked to “give me your best price”? And have you ever given your best sales price only to learn that the buyer still wanted more? Even power negotiators are expected to counter this amateur negotiation tactic. It’s expected. If you could lower your price by 10%, start out with 0%, or 2%, or 4%. Leave yourself room to negotiate some more. Who knows – you may get it for a 2% reduction. You might have to go all the way to 10%, but often you won’t. A little stubbornness can pay big dividends.
Get Something in Return for Your Added Value
What if you learn that the buyer’s negotiation process dictates their being able to monitor their expenditures for your products or services in a way that is far more detailed and complex than is standard for your industry? And what if your account tracking system is set up in a way that you can offer that information at essentially no cost to you? Often the salesperson’s overwhelming temptation is to jump in a say, “Oh, we can do that. That’s no problem.” Before you do, however, consider your options. You could throw it in as part of the package and attempt to build goodwill. Or you could take a deep breath and try something like, “That’s a difficult problem that will require some effort on our part, but it’s doable.”. In the second case, you’ve advised the buyer you definitely could do it, but you have not yet agreed to do it. You may not be able to get him to pay extra for it, or gain a concession elsewhere in your sales negotiation, but you may be able use it as a bargaining chip in resisting price concessions. Which way you choose to go will be based on who your customer is and on the situation. However, you do have options. Just because this information has no value to you and wasn’t even on your radar, doesn’t mean that it’s not a highly valued strategic negotiation directive for the buyer that differentiates your company from your competition.
Sell and Negotiate Simultaneously
Think of selling and negotiating as opposite sides of the same coin. Sometimes one side is face up, and sometimes the other side, but they are always both there. This is especially true in your earliest contacts with the buyer at the start of your sales negotiation process . The face the buyer sees is that of a salesperson demonstrating features and benefits. The hidden face is that of a negotiator probing and looking for information that may be invaluable later should issues like price, terms, quality, delivery, have to be negotiated.
Finally, and most important, be patient. Sales is a high energy, fast moving business. Patience is one quality that’s in relatively limited supply – but if you’re impatient in a negotiation, you’ll lose your shirt. If I’m negotiating with you and I know that you’re impatient, I will hold out just a little longer, no matter how desperate I am to conclude a deal with you. As long as I know you’re in a hurry, I’ll wait. So be patient. Take the time that you need, don’t hurry and give in, don’t show your anxiety, stay cool and don’t panic. Negotiation is a process and a game. Use the process and play the negotiation game. You’ll be astonished at the difference that it makes!
Michael Schatzki is a negotiator with Negotiation Dynamics