In 2010, I said that “Negotiation is the art of the deal.” And it’s still true today.
You negotiate for far more than the final deal or agreement as a sales rep. You negotiate to get access to speak to a prospect, for their time, for the information you need to advance the sale and to talk to those on the buying team. The whole process is a negotiation to create a win-win situation for your organization and your prospect.
If you cannot negotiate, you’ll find it difficult to advance the sale at each stage. Learning to negotiate is a skill you can use to create value, build trust, and make the final negotiation easier.
In this article, I highlight seven vital negotiation skills you need to create value for your clients and your company, advance sales at every stage, and close deals.
Essentials of Sales Negotiation Skills
If a sales negotiation is a series of discussions that leads to the close of a deal or at least an agreement on how to move forward, the worst thing you can do is leave because you don’t get what you want.
Each person in the negotiation has an idea in mind of their dream outcome, good outcome, and “no way” outcome. It’s your job as a salesperson to navigate this process. Giving up too early is a mistake.
According to Crunchbase, six is the ideal number of calls to win a sale once you’re talking to a decision-maker. How many of those calls will require negotiation of some kind?
Spoiler alert: It’s likely all of them.
However, don’t think that negotiation skills are the only skills you need to win a sale. Before jumping the gun and negotiating, ensure that you provide value first. Negotiations will run smoother if you create and sell value.
Understanding what a selling conversation sounds like when you take a consultative approach and use a value-based pricing strategy to win deals is crucial. Then you approach the negotiation from a position of trust and strength.
One other note; yes, it’s good not to be afraid of some conflict. When both parties are negotiating, neither wants to back down. The temptation is to give an ultimatum. This is a mistake. The best salespeople can temper conflict through diplomacy and move the negotiation along.
1. Listen to Understand, Not Respond
People want to be seen and heard. Once you’ve created value in a negotiation and presented what is changing in their world, a prospect is more likely to be honest with you and air their concerns. Listen. Really listen.
An empathetic listener doesn’t listen to respond; they listen to understand. The more your prospect feels understood, the faster you’ll agree. If you go on the defensive, you’ll create tension.
Is an objection really an objection? More often, an objection is simply your prospect saying, “I have concerns.”
What’s their real concern? Listen carefully and look for cues. Maybe they’ve been burned before and are worried your product won’t live up to their expectations. Perhaps they’re scared of making the final buying decision.
Whatever the case, listen to hear and understand, not respond.
2. Show Them You Know Them
If negotiation is art, prepare like an artist. Artists know their craft. They research, observe, and know their subjects. As a salesperson, you need to know everything you can about your prospects before negotiating.
An intimate understanding of their business and industry helps you create a canvas of their world. You’ll know the challenges their industry faces as a whole. You’ll discover the challenges their company faces and what pains they have.
Through research, you can see their best alternatives and be ready to show why your solution is more valuable to them.
RELATED READ: How to Create a Preference for You and Your Solution
Think of it this way: Imagine your largest daily struggle at work. If I had the solution that you truly believed could alleviate that pain, would you be nickeling and diming me? Most likely not. Give your prospects every reason to say yes.
3. Create Value First
The contest for a client’s business isn’t between companies and solutions; it’s between salespeople. And great salespeople know that negotiation occurs throughout the sales cycle. Before even getting to the final negotiation, you need to maximize the value for both parties.
Notice I said both parties. Successful salespeople don’t negotiate lose-win agreements that only create value for the client (or themselves). Clients know that for a company to do its best work, they have to do so at a profit.
Each interaction with your prospect is a chance to create value. It’s the only way to advance the sale. You can create value and provide solutions by exploring the issues your prospects face. Create value by showing and helping clients understand how best to decide to change and improve their results.
4. Defend the Investment
As I said above, the best salespeople don’t negotiate lose-win agreements. You’re no longer negotiating when you offer or agree to a price concession. If you do give a concession, you need to get something of equal or greater value than what you give.
RELATED READ: Negotiation: The Ability to Create Win-Win Deals
Instead of negotiating with your managers to lower the price, negotiate with the client to help them see the value of your solution. Remember that an objection to price is usually due to a different concern. You need to defend the investment.
5. Stay Calm: You Are In Control
According to this research report, successful salespeople lead negotiations. Top performers set the agenda of meetings, go first when sharing objectives and concerns, and make opening offers. You should be in control.
And prospects know when you’re not. They can tell when you’re not confident. Your body language might give you away, you’re too eager to fill silences, and you offer concessions early on. This comes from a place of fear.
But you can’t be afraid to negotiate. When the client knows you have the solution and wants what you have, you have the leverage. I like to invoke the one-up mindset here.
- I know I’m one-up when I know more than my client.
- I know I’m one-up when I use the client’s time well.
- I’m one-up when I know the trends and forces that harm my client’s results.
Find out where else the one-up mindset applies here.
Stay calm and be confident. You command respect if you stand your ground and communicate as a partner. Even if the prospect takes an adversarial stance, maintain your composure and try to negotiate a compromise.
6. The Higher Price Comes First
If you need to negotiate on price, it might be because you know your solution is more expensive than what a prospect is used to paying. If this is the case, introduce the higher price first. I wrote about this in The Lost Art of Closing: Winning the 10 Commitments That Drive Sales.
As a successful salesperson, you should know your pricing parameters. You need to know how low you can go and still negotiate a profitable deal. You give yourself more wiggle room when you start with a higher price.
RELATED READ: How to Defend Your Price
It’s a mistake to offer a discount range. When you say, “we can give you a 20-30% discount,” your prospect will always choose 30%. Offering a steep discount also undervalues your product. Your prospect will wonder why the price was so high in the first place.
It’s on you to create value and educate your prospect on the investment they’ll need to make.
7. Know When to Walk Away
If a deal isn’t going to progress and create value for both parties, the professional thing to do is to go your separate ways. You’ll know when a sale is dead in the water if prospects make unreasonable demands or refuse to show any interest in reaching a compromise.
Don’t just accept every curveball a prospect throws at you. You weaken your position and show a lack of authority if you concede to every request.
Clients who agree to sign a contract if it’s amended at the last minute will cause problems later on. If they’re only concerned about the cheapest deal they can get, they’ll never see your product’s or company’s true value.
Sales Negotiation Skills: Take Action
If you’re struggling to close deals, before you jump into sales closing training, take a look at your negotiating skills. Remember, you have to negotiate with different stakeholders many times before getting to the final deal.
The negotiation skills I’ve highlighted here are seven of many. You don’t need to use every strategy in every sale. Pick one or two and get the reps in, and use the skills you’ve learned here to close deals.
If you want to enable yourself with negotiation skills, the mindset, strategies, and tactics to close deals and crush your sales targets, get access to our free Guide to Becoming a Sales Hustler today!