As a sales professional, it is vital that you have regular negotiation training in order to overcome the many objections and problems you will encounter during your career. It has been said that strong negotiation skills can easily add an additional 10% to sales revenue. Through strong negotiation, your commission, profit, or whatever you want to call it, could be 10% more than it is right now. If you currently earn $10,000 a quarter in bonus, then the free negotiation training that follows can help you earn at least an extra $1000 for not a whole lot more work.
For sales managers, good negotiation skills will reduce staff turnover, lower recruitment and training costs as a result of less staff leaving, and improve your teams quality, motivation, consistency and competitive advantage. These are the key features that will be the difference between success and failure in your business.
Please note: This article is written from sales negotiation view point. Having said that, this negotiation training can be modified and adopted to debt negotiation, salary negotiation and even buying negotiation.
Modern Sales Negotiation
Sales has become far more consultative in it’s approach in modern times. The days when confrontational, winner-takes-all selling was effective are almost completely number. Today, the aim of sales should to find mutually beneficial collaboration, where both parties get exactly what they want. Therefore, modern negotiation training should focus on creating new ways to achieve this win-win outcome by thinking creatively and cooperatively.
With that said, it is still worthwhile to understand and master the more traditional negotiation tactics as you will undoubtedly come across the old style, confrontational approach by people who are firmly committed to their style of business.
Free negotiation training, tips and strategies
Before you can even think about trying to negotiate with the opposite party, you must first make sure than you are positioned correctly to deal with any objections. How you approach the situation and at what stage are far more beneficial than any negotiation tactics you could ever learn.
Always have an alternative.
When you are selling to a prospect and you know that you cannot walk away from the deal, no matter what terms they want you to agree to, then you are obviously at a serious disadvantage. If, on the flip side, they believe you are the only viable option or that you have the best product and/or price, then that puts you at an advantage. It is so important to stress here that the more you need to secure the deal, the weaker you become in the negotiation process. If you have an alternative buyer, the more the better, then your negotiation style will be more relaxed and the onus is on the buyer to decide how badly they need the product.
Also, remember that the buyer will be give you the impression that they too can and will look elsewhere, even if they can’t or don’t want to. What this means for you is that when selling you need to create a unique selling proposition for which there is no alternative supplier. By making your product or service unique, your buyer has no where else to go and this puts you in a very strong negotiating position.
Establishing uniqueness (or a perceived uniqueness) is the single best negotiation strategy you have. If the product isn’t unique, then you must ensure that you are unique, giving the impression that the value you add to the deal is something they cannot get elsewhere. Obviously, denying uniqueness is the most powerful tactic used by the buyer, so be aware of that when you are negotiating.
Only negotiate once the sale is agreed
You will find that very often, buyers want to negotiate terms before giving you any commitment. Do not let them. If you get drawn into negotiations before you have an agreement to do business, you will lose ground to the customer and it instantly puts you on the back foot. What this means is that the pressure is then on you to get the customer to commit and you will find yourself making more concessions to secure the deal.
One of the best ways to get the customer to conditionally commit to a deal is by using a conditional close. A good choice would be the “If we can…will you…?” close. For example, “If we can agree the details will you place an order?” Always word it as we or us, because as previously stated, the best results from negotiation are gained through a partnership of the buyer and seller.
Also be aware that the buyer will be trying to do the exact opposite in the situation; trying to negotiate concessions before committing to buy. If you’ve ever tried this yourself as a buyer then you know just how much you can secure without making any agreement in return.
Aim for the best possible outcome.
Although it shouldn’t really be the case, many negotiations end up being a split-the-difference deal, because the underlying psychology and expectation is already present before the deal is done. For this reason it is highly important that you set yourself up for the best possible outcome you can get. If you would be happy with an order of 1000 units, go into negotiation by asking for an order of 2000. That way, if you do end up splitting the difference, there is a good chance you will get the order quantity you wanted. In addition, there is also a possibility that you get the order for 2000 units and are thus in a better position than you would have been had you just asked for 1000 right off the bat.
If you get the option to hear the other sides offer first, make sure you do so. It is a law of negotiation that the side who makes the initial offer is at a disadvantage. The buyer can, and often will, disregard your offer and ask for a better deal. By prompting you to make your offer first, they avoid the risk of making you a better offer than you were prepared to accept.
This is why as the seller you will very often get a much higher selling price, or larger order volume by listening to what the buyer is prepared to offer first.
Prepare a list of requirements.
Before you go into any kind of negotiation, you first need to know what the other party needs. This extends not only to the product or service you are selling, but also the emotional and personal aspects too. Everything has a cost and anything that is related to the deal should be included too. These factors can include, price, discounts, product color, product size, lead time, contract terms, delivery dates, training, cooling off period and many more. These variables will all affect the cost and must be factored into the negotiations.
The buyers personal requirements cannot be overlooked either. Often they will be buying for a company in which they are employed rather than own and this means you need to determine who makes the final decision, who speaks to who within the organization, time taken for meetings, lead times for decisions, future opportunities etc.
When selling to someone in an organization, they are staking their reputation on you and will not sign off on the deal lightly. They will want to make sure all their bases are covered before agreeing terms. With this list of requirements you can then fully map out your plan for negotiation to ensure the best possible outcome.
Only give when you receive
A fundamental rule you should always follow in any negotiation is that you do not make concessions without receiving something in exchange. If you give something away without something in return, you are no longer negotiating; you’re conceding.
A simple written agreement to secure the deal is one of the most powerful concessions you can receive in exchange for something of relatively low value (in your terms). Use this agreement to close the sale and both parties come out happy at the end.
Take extensive notes.
Accurate note taking is a wonderful negotiating tool. Firstly, make sure the buyer is aware you are taking notes, since it shows an attention to detail and so that facts can be quoted later.
Taking notes allows you to control the negotiation, ensuring that nothing is forgotten, misunderstood, or misinterpreted. It also makes you appear more professional and allows you to quickly summarize and assess the deal continually.
Misunderstandings can make or break the deal and damage the rapport and trust that may have been built up during the initial proposal. By continually summarizing and clarifying points this can be avoided.
Another underused reason for summarizing is the psychological affect it has on the buyer. Getting positive agreement throughout the negotiations eases them into a buying state of mind.
Once negotiations are complete, a final summary is essential to provide clear and written confirmation of the deal.
When not to negotiate
Sometimes buyers just can’t say no when they don’t want to do a deal. To avoid your time and theirs, you can learn to identify these signals and prevent unnecessary negotiations from happening.
“I’ll see what I can do.”
“I’ll let you know.”
“I’ll find out.”
“Head Office have more authority than me.”
It is also hugely important that you learn to walk away from deals if the concessions asked for by the buyer are not possible, too commercially demanding or simply don’t make enough revenue to warrant the time input. In these cases, focus your energy elsewhere on clients that are not so demanding and will offer a mutually beneficial agreement.