Businesses with expert sales teams sometimes find themselves on a mystifying string of bad luck. Their sales professionals identify and qualify promising leads, even have a series of discussions with these prospects—only to end up with nothing to show for it.
One possible cause for the inability to close a deal might lie in a tactical misconception of what “negotiation” means.
Engaging with a prospect and finding ways to secure an agreement can be complicated and easily derailed. That’s why every salesperson should thoroughly grasp the idea that negotiations “are termed successful when real and perceived differences are adjusted while preserving credibility, customer value, and profit margins.”
So how can you master the art of negotiations and make the sale that’s so important to your business? Here are tips for salespeople to keep in mind:
Establish value in the prospect’s mind. Your would-be customer will be more receptive if you’ve already laid the groundwork of value. Long before actual talks begin, send the prospect valuable content he or she might not otherwise have, as well as information on how your product or service can dramatically benefit that person’s company in the long run. Establishing value beforehand generally makes a prospect more willing to enter into sincere negotiations.
Know what you’re prepared to give up. It’s fruitless (and can be self-defeating) to enter a sales conversation without knowing your bottom line. Don’t rely on spontaneously offering an exclusive discount or some other “value-added” concession in order to seal a deal. You may end up giving away more than your business can hope to get. Prepare with “strategic concessions” in mind before talks begin.
When offering a concession, ask for something in exchange. It’s not much of a negotiation if you offer key concessions and get nothing in return. As the back-and-forth talks proceed, ask for more favorable payment terms, a bigger initial order or arrangements for repeat business. What appear like significant concessions at this initial stage might yield greater opportunities for up- and/or cross-selling at a later time.
Always remember, negotiations aren’t personal. Just as you enter negotiations with clear-cut business goals in mind, so does the person on the other side of the table. Just like you, they’re looking for the best possible deal. Therefore, getting too defensive or emotional will harm your chances of achieving the desired goal. Focus on being patient and being willing to see things from the other person’s perspective. Business is business, and the prospect’s demands “do not reflect on you as a person.”
Don’t be afraid to say “no.” A salesperson’s instincts generally tend towards always being agreeable with the prospect. But saying no is an integral part of every negotiating session. Of course, it’s vital to do so at the most appropriate moment, and in the most courteous way possible.
Be prepared to walk away. As much as you may want to close a particular deal, there are times when negotiations end up in a place that can negatively impact your business. A prospect who’s too demanding or unwilling to budge from a specified price might not be worth your company’s efforts in the long run. As HubSpot notes, “A customer who only agreed to sign if the contract was radically amended or the price was drastically dropped is bound to cause problems down the road.”
Negotiations aren’t easy. They demand maturity, self-control, strategic preparation and an ability to listen closely. Salespeople who cultivate these traits will see their success rates go up as they become better practitioners of this delicate craft.
Want to learn more about sales and negotiations? Find out if a TAB Board is right for you!