Negotiation. The word strikes fear into the hearts of some salespeople, gets other reps geared up for a fight, and excites still others who love a good tête-à-tête.
Regardless of your reaction, negotiation is a non-negotiable (pun intended) part of the sales process. You might think the hard work is over once a mutual fit has been determined, but that’s when the wheeling and dealing really begins.
Negotiation doesn’t have to be painful, but unfortunately many salespeople follow flawed best practices and advice that introduce unnecessary difficulties into the process.
If you’re doing any of the 11 things below, it’s time to change your mindset and your negotiation strategy.
11 Sales Negotiation Mistakes You Might Be Making
1) Treating negotiation as a zero-sum game
Some salespeople treat negotiation as a battle with one winner and one loser. This is a terrible mindset to have.
Thinking of deals as adversarial will poison your entire sales approach. To close deals and come to successful outcomes, you need to think of your prospects as partners – not enemies. If you’ve done sufficient discovery and have demonstrated value, a negotiation is a discussion about what you’re able to deliver to your prospect and when you can do so. Find a mutually beneficial solution for you and your prospect instead of playing hardball to suck every last nickel out of the deal.
2) Not knowing why the prospect would buy
You should know what the prospect’s goals and plans for the product are. If you can’t demonstrate why their product is the right fit to help them achieve their strategic goals, they simply will not buy. It also means your demonstration and pricing calls will be unfocused and not address the prospect’s goals.
3) Not knowing why the prospect wouldn’t buy
When you’re preparing for any negotiation, you should always anticipate objections and reasons why the prospect wouldn’t want to invest in your product. This way, you’ll be able to preempt these objections and answer them smoothly if and when they are raised.
4) Negotiating too early
You shouldn’t start talking about terms and conditions until your prospect’s bought into the value of your product. Nobody wants to talk about the logistics of a project they haven’t agreed to, so they’ll only find your efforts to discuss the nitty-gritty annoying.
Another harm of this approach is that trying to discuss logistical details like delivery date and price will commoditize your product. By all means provide a ballpark figure to determine if there’s a budget fit, but talking about detailed terms will only conflate things like price and implementation with the product’s actual value in your prospects’ minds, making the whole sale seem like a transaction rather than a valuable strategic choice.
5) Negotiating with the wrong person
Don’t propose negotiation terms or offer concessions to a low-level employee who isn’t the decision maker. Unless you absolutely have to sell through an influencer, always try to negotiate directly with the decision maker. Someone who doesn’t control the money won’t be able to give you a realistic sense of what they can and cannot commit, and you don’t want your past conversations to get lost in translation.
6) Treating all objections the same
Objections will usually be surfaced or resurfaced during negotiation. Some are serious blockers to a deal’s progress and should be treated as such, while others are indications that the prospect isn’t as bought in as you thought they were. Learn to spot the difference or risk losing the deal because you dismissed a real objection or gave up when your prospect merely wanted to learn more.
(Not sure where to start? Check out our guides to objections that are really requests for information versus ones that are true blockers.)
7) Thinking price as the only lever you can pull
When salespeople think of negotiation, too often their minds go directly to discounts. But pricing is only one of several areas that can convince a prospect to pull a trigger. Try getting creative and negotiating aspects of the deal like delivery date, payment terms or methods, implementation assistance, onboarding or training packages, or additional services.
8) Giving something away without getting something in return
Remember, negotiation isn’t a zero-sum game. But you shouldn’t be giving things away for free: If you’re going to do a favor for your prospect by compromising on one thing, make sure you’re getting something in return.
Your power in a negotiation is as a gatekeeper to the product your prospect needs to achieve a business goal. Don’t take that role lightly – while you shouldn’t demand more than is reasonable, there’s no reason to give away the store without asking buyers to meet you halfway.
9) Not knowing when to walk away
Your product is priced and packaged the way it is for a reason. Some salespeople fall into the trap of apologizing for price, or delivery terms, or payment terms. But the second you start saying “yes” to the prospect’s every demand, you’re devaluing yourself and your product.
And that’s dangerous. While you’re probably going to have to give away something on every deal, going overboard is bad for you and your company. If prospects start demanding far more than your bottom line can accommodate, walk away.
10) You don’t understand the prospect’s decision criteria
At the start of every discovery process, you should determine what will influence your prospect’s buying decision. What requirements will you and competing vendors have to fulfill before your prospect can become a customer? You should walk into a negotiation with a list of these requirements so you can point to each one and explain how you’ll satisfy it.
11) You take things personally
Negotiations can feel combative and personal, but they’re not. Ultimately, they’re a meeting of two parties trying to determine whether a business partnership makes sense, and the objections and criticisms your prospect raises are not attacks on you. If you get too emotional or take things personally, you won’t approach negotiations with a level head, and risk making unproductive snap decisions or saying something you regret.
What negotiation mistakes have you seen torpedo deals? Share with us in the comments below.
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