In the perfect world, a seller makes an offer, sets a price and the buyer is happy with it and accepts it without any second thought.
In reality, however, things are a little bit more complicated.
As a salesperson, sooner or later you come to a point when you need to negotiate, and there’s no wiggling out of this imminent and dreadful necessity.
Indeed, studies confirm that negotiations are often met with anxiety and stress, and salespeople find this process unpleasant and petrifying.
So is there a way to boost your negotiation skills and become more confident and stress-resistant? Yes, the answer is lots of practice and learning from others.
However, if you’re not satisfied with this answer and you are looking for some solid value-adding negotiation tips and strategies, you knocked on the right door.
In this blog article you will find out about:
- Why negotiation is important in sales.
- Fascinating sales negotiations stats.
- Effective sales negotiations tips.
- Winning negotiation strategies.
Let’s get it started!
Why is Negotiation Important in Sales?
Good negotiation skills are not that common to come by. That’s why salespeople who have an extensive experience in the field and boast high-level negotiation abilities are very highly-esteemed and are always in demand.
Being able to take a strong stance in the negotiation process and understand the power of leverage is what makes a successful deal in sales. You need to be able to take the dominant position with your client and work your way through all possible objections to generate higher revenue and meet your quota. Therefore, conceding and caving in is just not an option.
Let’s have a look at these sales negotiation statistics to better understand the nature of this complicated process and what it means in sales:
- Top sales performers and negotiators are 3 times more likely to achieve their quota and target deal size. Additionally, they are 12.5 times more likely to be completely satisfied with the deal's outcome.
- Most salespeople give in under pressure and concede to less satisfactory deal sizes, even though most buyers admit to being able to afford to pay more.
- The main factor that separates top negotiators from the rest is understanding the power of leverage in sales negotiations.
To differentiate yourself from the rest and become an invaluable sales professional, you need to find one thing that will make you special. Could it be your excellent negotiation skills? Learn these tips and strategies and give it a try!
Effective Sales Negotiation Tips
We don't have negotiation skills imprinted in our genes. Usually, we learn how to negotiate by observing others and their behavioral patterns. And if you’re willing to learn and aren’t scared to meet some resistance, you can develop negotiation skills, no matter your age, background, education, or zodiac sign.
Sales negotiation principles are not that complicated to comprehend but will require an extensive “trial and error” phase. So let’s start with some basic but highly effective sales negotiation tips.
Tip #1: Plan it out
Any sales negotiations require thorough prior preparation. To make things easier for yourself, and feel more confident, find some time to make a thorough plan of actions.
Here’s a quick sales negotiation checklist that will help you get ready for any negotiation:
- Outline your objectives for the negotiation and consider possible objections.
- Think about trade possibilities.
- Identify your reservation price (the least favorable deal to which one of you will agree), and your BATNA (best alternative to a negotiation agreement).
- Think about your negotiation opening.
- Reflect on your leverage and how powerful it is. How much do your buyers actually need or want your product/services?
Tip #2: Prepare an Agenda
A clear agenda for your negotiation will help you focus on important meeting details and stay on the right track even if the conversation derails at some point.
If you’re the one responsible for the meeting agenda, you have more power over the negotiation process. Therefore, take this task seriously and account for the following:
- Objectives at each stage. Decide what you want to achieve at every stage of negotiation and stay consistent with this plan during the meeting with the client. Additionally, ask the buyer about their goals and what they would like to accomplish.
- Issues to be addressed. Make a list of relevant issues that need to be addressed during the negotiations. This way, the buyer will have fewer opportunities to hijack the conversation and take control of it.
- Confirmation from the buyer. Confirm the contents of your agenda with the buyer to make sure you’re on the same page.
Tip #3: Open with the Offer
Making an offer in the opening part of the negotiation allows you to have an anchoring effect.
Anchoring is a sort of cognitive bias that makes your buyer believe that the first information they hear or see is the most favorable one. This information becomes “an anchor” of a conversation and every subsequent evaluation is based on it.
It’s been observed that sellers who close deals with the desirable outcome use the tactic of the opening offer.
Tip #4: Facilitate the Process and Provide Help when Needed
Be the one in charge of facilitation as it offers you a much more favorable position in the negotiation process. This way, you can make sure that the conversation doesn’t get derailed at any given moment.
Ask questions and listen to the buyer at every step of the way to build deeper, more meaningful connections with them.
Tip #5: Be Ready for Trading
Depending on how cooperative your buyers are, you need to prepare yourself for the possibility of a trading situation. Maybe you will have to make some concessions, but when faced with this dilemma, make sure to squeeze out the most out of the deal for yourself, too.
Therefore, before the meeting, think of all the trading options and scenarios so you don’t come unprepared.
Tip #6: Ask for A Budget If It Makes Sense
Now, making an opening offer is a great tactic, but sometimes it does make sense to ask for the buyer’s budget first and make adjustments, especially if you’re trying to compete against another big seller.
Top 4 Winning Negotiation Strategies
Now it’s time to turn negotiation tips into winning negotiation strategies.
When dealing with any kind of objections, some salespeople tend to give up and settle on any price just to close the much-needed deal and be done with it. It all stems from the fear of losing the client. For most people in sales, it’s better to make a smaller deal than no deal at all.
However, top sellers know very well that a creative and value-adding approach can convince a potential client to accept a higher offer.
If you show your client the real value of your product and try to dive into their pain points to extract some helpful insights into their objectives and goals, you can almost always push for a higher price.
Lead the Process
Top negotiators are always responsible for leading the conversation and setting their own tone and pace for it. That’s why preparing an agenda for the meeting and making a plan is so important.
Go forward with an opening offer when it makes sense, set the objectives of the meeting, suggest ideas, and consult with buyers.
Negotiate with Emotions
Sales negotiations are always emotional. Before you make any deals with the client, you often need to build rapport with them.
Connecting with your buyers on an emotional level is an important part of any successful negotiation. You need to be able to sense their moods and act accordingly.
One thing that will definitely help you come through to your buyer is trust and open communication.
Assume the most favorable position
One of the most popular strategies among top-performing sales negotiators is showing the buyer that you’re ready to walk at any given moment. Indeed, not all salespeople can afford such a luxury. However, it’s not about actually saying no (unless buyers push for the price that’s below your threshold), it’s about showing that you have nothing to lose.
Never let the buyer think that you need them more than they need you. They will sense your desperation and push for a less favorable deal size. Radiate confidence and the buyer will respect you enough to accept your initial offer.
Negotiating is a Skill Worth Developing
Being a successful negotiator is without any doubt extremely rewarding. That’s why mastering this art is crucial for any high-level sales professional. When you know how to negotiate successfully, everything in your life becomes much easier: from acing an interview to landing a great bargain.