Sales negotiations have changed. Today, buyers enter negotiations with more knowledge than ever before, thanks to their own research. To complicate things, third parties are often involved in the process, and procurement technologies are more common. This doesn’t help reps who are already nervous about negotiating. “Many research studies show anxiety is the most common emotion associated with negotiation, and our field work confirms that anxious negotiators don’t perform well,” writes RAIN Today’s President Mike Schultz.
Despite these challenges, there are surefire ways to be a successful negotiator, which Schultz shares in his post.
- Always be willing to walk
- Build value
- Lead the negotiation
- Effect emotions
- Trade, don’t cave
- Plan to win
Sales negotiations strategies
As Schultz points out, negotiations are vital to sales success. RAIN’s research shows that top performing salespeople are “12.5x more likely to be happy with the outcome of their negotiations and 3.1x more likely to achieve target pricing.”
He is also quick to point out that negotiating doesn’t mean always reaching a total agreement. Rather, it’s the process in which people work together to reach the best possible agreement.
With his six strategies, reps can improve how they partake in that process, ensuring that they and their prospects walk away satisfied.
Always be willing to walk
While it seems counterproductive, be willing to walk away from any negotiation. This tactic is all about mindset. As we’ve written before, mindset is incredibly important, and it definitely has an effect on negotiating. If you enter the process thinking you have no other alternative, you’re giving the buyer leverage. “Research shows that being willing to walk is the #1 strategy most separating top-performing sales negotiators from the rest, and it’s a strategy that delivers many benefits,” Schutz explains. Those benefits include:
- Decreased fear of loss
- Gaining control of the negotiation
- Decreased anxiety
- Shifted dynamic
- Increased buyer desire/interest
Shifting your mindset to wanting the sale, rather than needing, will position you better for negotiations from the get-go.
Also, be sure to notice the signs that you should walk. Check out past advice from SalesFuel to learn when it’s best to pass on a prospect.
Successful sales negotiation requires the rep to show value in what they are selling. By doing so, objections from the prospect may be prevented. Or, you can at least confidently meet them rather than cave to them.
“Objections—whether price, trust, urgency, competitive challenges, or anything—can be met with problem solving and new ideas,” Schultz explains. “If you focus on the objectives—and helping you and your buyers meet them—you can almost always come up with ideas to build value without lowering the price.” Additionally, RAIN’s research found that top performers who consistently show value to prospects have higher win rates than other reps.
Lead the negotiation
During sales negotiations, don’t sit back and let the prospect lead; take charge and guide the process. Be proactive and establish yourself as a leader by taking control, from setting the agenda to sharing pricing parameters. As Schultz points out, “Selling means having a vision. You know what you're trying to achieve, and you work hard to achieve it. When you lead the sales negotiation you put yourself in the best position to turn that vision into reality.”
Director of AdMall Sales Denise Gibson completely agrees, and she points out that taking the lead should always be part of the process. "You never want to give up any control of the sales call," she advises. "From the time you start with your opening until the time you close. You want to lead and guide the advertiser down your path. That also includes the negotiation of pricing and terms."
Emotions definitely play a role in sales. Inspiring positive emotion in the buyer is an important soft skill for reps to hone. As a previous SalesFuel post explained, appealing to prospects’ emotions is just as important as appealing to their intelligence. To prepare, think about what emotion(s) the prospect needs to feel in order to buy. “From there…consider what kind of argument should be presented to inspire that feeling in [prospects] so that taking action will become irresistible,” adds sales and marketing professional Craig Simpson.
Schultz points out that managing one’s own emotions during negotiations is important as well. “The best negotiators also control their own emotions,” he writes. “They manage any anger and frustration and bring about calm so they can focus. If they’re anxious or worried, they smooth themselves out so they can do what they must without fear of loss or conflict.”
Need some tips for keeping your own emotions in check? Consider role playing to improve emotional regulation.
Trade, don’t cave
During sales negotiations, you’ll likely be tested. As Schultz explains, “Buyers will often test a seller's cave tolerance. They'll ask for a lower price, and they'll often get it.” Handling objections expertly is a must for successful negotiating. Remember the definition of negotiating is working together. Immediately giving in to a prospect’s requests won’t do you any good. Instead, consider how you can explore other possibilities or, as Schultz recommends, trading.
Trading, he writes, is all about reciprocity: asking for something in return when a prospect makes a request. It also can mean proactively making a request when offering something to the buyer. Essentially, trading involves both the buyer and prospect conceding a bit yet both still getting something of value.
Plan to win
Once again, mindset matters. Go into each sales negotiation with the mindset that it will be successful. Being positive boosts the chances of your desired outcome. As Rachel Cagle wrote for SalesFuel, “Optimism in the negotiation process is just as important as confidence. Don’t go into a sales meeting feeling as if you’re going to get pushed around and settle for a price lower than what you wanted. If you do that, you’ll likely bring that result upon yourself.”
Schultz recommends reps boost their confidence and create a positive mindset by preparing thoroughly for negotiations. According to RAIN’s research, 52% of top sellers prepare beforehand. These findings align with SalesFuel’s own research about what buyers want. The Voice of the Buyer survey revealed that the top attribute buyers want in a seller is knowledge about their products and how to use them to solve their business problems or achieve their goal.
Go into each and every negotiation prepared by doing ample research about the prospect and their business, as well as preparing your strategy, readying yourself for potential questions and objections, and other aspects of negotiation.
One more thing: empathy
And make it clear that you want the prospect to be happy with the negotiation outcome and that their satisfaction matters. As Cagle writes, “Nothing destroys a negotiation faster than if a prospect believes that they're working with a selfish, money-focused sales rep.” Additionally, show patience for the process; you both are in it together. This show of empathy can do a lot to boost your profile in the prospect’s eyes.
Photo by Gabrielle Henderson