Negotiation is an essential skill that should be part of any salesperson’s arsenal. It can also be one of the most challenging aspects of sales. Many reps are great at sales but flounder when it comes to the back and forth of the negotiating table. Often, salespeople make concessions in the moment that they later regret. But how does one negotiate effectively without creating animosity? It is a delicate science and takes an entire skillset of its own, but the following tips are a great start.
If you are struggling with coaching your team members and managing your time as a sales leader, you could benefit from a training software like Attention. We harness cutting-edge artificial intelligence technology to provide live feedback to your reps and take sales coaching to the next level. Click here to try us out!
One important key to negotiations, and honestly sales in general, is to generate a sense of urgency. Prospects will often stall for more time, and the more a sale drags on, the more likely it will fall through or the prospect will drive down the price. As you probably already know, setting deadlines and time limits on a deal (if it’s not done in an overly ‘salesy’ and transparent way) tends to increase your prospect’s desire for the product. Additionally, in the context of a negotiation, the customer is much more likely to accept your terms if they feel their chance is running out.
Before going into a negotiation, you should have a very clear idea of what concessions you are willing to accept. The more precise the better. Define an acceptable lower limit for the price, and resolve not to go below it. It can also help to rehearse some possible objections or counteroffers your prospect may make, and how you will respond to them. If you don’t do this, you may run the risk of being caught off guard when the prospect starts to negotiate, or of giving in to the temptation of a lower offer in your eagerness to close the sale.
In the moment, it can be difficult to establish boundaries, though one of the traits of great salespeople is that they keep their cool and don’t concede readily. This becomes much easier when you define the terms you are willing to accept beforehand. Then you just have to stay firm during the negotiation, rather than trying to assess the fairness of an offer during a negotiation.
As a caveat to the point above, you don’t necessarily want to be overly rigid and inflexible either. This does not mean you should go below the limits you set yourself, but you should find ways to get around an impasse if possible. Always take the current situations into account: for example, if the prospect is a potential repeat customer or can bring you other customers, it may be acceptable to go a little lower than you usually would.
If negotiations are reaching a stalemate, you can also use other methods to close the gap, like offering more product features or throwing in freebies, instead of making concessions about price. The point is to strike a delicate balance between being too rigid and being a pushover. The client should sense that you are standing firm and can’t be pushed around, but you also shouldn’t jeopardize good deals due to excessive obstinacy.
If you are standing your ground and being firm (as you should be), your negotiations run the risk of becoming tense or even hostile. For many reasons, it is important to diffuse this quickly and keep things light and friendly. As soon as things become tense, your prospect will become much less likely to go through with the purchase. The negative emotions that have been elicited will get projected onto the purchase as a whole. Additionally, if the sale does end up happening, you may need to collaborate and keep in contact with the prospect, and hopefully retain them as a repeat customer, so you don’t want to start things off on the wrong foot.
You can diffuse tension with a joke, by establishing a friendly connection, or by strategically pivoting or changing the subject when any topic becomes too fraught with tension. It is also a good idea to be straightforward and honest yet respectful, so you don’t come across as a pushy salesperson, which can cause prospects to become defensive. Ultimately, it just comes down to reading the buyer well and communicating on a human level.
While salespeople are known for being quite chatty, silence can be one of the most powerful tools you can use during negotiation. Silence creates pressure, and one of the keys to negotiation is knowing how to create pressure (and also how to diffuse it if it becomes too tense or hostile). One of the biggest mistakes sales reps make during their negotiations is over-communicating. This makes you come across as unconfident, apologetic, and unsure of yourself.
If you state a price, do not rush to explain or justify it, and certainly don’t start offering a lower price until the prospect has responded. Instead, name the price and shut your mouth! This projects certainty, and enables you to listen to what the prospect has to say and adjust your strategy accordingly. In the reverse case, if the prospect has just announced an offer, silence is just as effective. It will probably not be the reaction the prospect is expecting, and will often lead them to wonder if their price is too low. Also, due to the human desire to please and to fill in uncomfortable silences, they are likely to chime in and start trying to justify their price or even to raise it, which gives you the power in the negotiation.
This is one of the most powerful tips to keep in mind during any negotiation. You should always be willing to walk away from the negotiation table if the prospect is demanding too many concessions. Knowing that you don’t need to close the sale and that you have the power to walk away from it increases your confidence and actually makes closing the sale much more likely.
Negotiating a sale is not always easy. There are many tips that can help you get the most out of your negotiations and close more deals, but it’s important to remember this isn’t a one-size-fits-all approach. Every negotiation needs personalized attention with an understanding of what you want from both parties involved. The most successful negotiators are able to create a sense of urgency, define what they are willing to accept, and diffuse tension. They also use strategic silence in order to project their authority at the negotiation table. Consider incorporating these eight tips for productive negotiations into your own sales strategy today!
To take your sales coaching to the next level, give Attention a try. We guarantee that your junior reps will be ramped up and meeting quotas within weeks, not months!
Want to improve your voicemail game and get those return calls rolling in? Here are 7 tactics you can use to leave a great first impression on your next voicemail.
Here are six simple steps that will help you get your foot in the door and land more deals by building relationships with executives.
Learn how to make sales training fun for reps and managers. Try these 6 tips to supercharge your next session!