The ability to negotiate is critical for all B2B salespeople. This goes beyond handling objections. When a buyer begins negotiating with you, they are demonstrating they truly want your product or service. They are not objecting to your offering, they simply want to see if they can obtain more favorable terms. If you don’t understand the difference, you can confuse things and blow the deal.
We offer a sales negotiations workshop where we teach salespeople and executives the difference, as well as tips for success. But read on, because I am going to give you a few pointers you can use right away.
According to Roger Fisher and William Ury in their book “Getting to Yes,” there are three styles of negotiation. These are:
Soft. Very friendly style which seeks agreement through trust and making concessions. Think of how most diplomats operate.
Hard. This is an adversarial style, with a “winner take all” attitude. Donald Trump embodies this style, and it is used by very dominant people in general.
Principled. Seeks a win-win for all. Rather than attack the opposite side, negotiators who use this style tackle the problem and try to reach the most efficient and amicable outcome possible.
Of the three, the principled negotiation is the one favored by elite salespeople in most situations and the one we emphasize in our sales negotiations workshop. However, they won’t hesitate to soften their approach in certain negotiations, while digging in their heels for others.
Regardless of which style you prefer personally, you can employ the following tactics during your next negotiations to help win the sale with favorable terms for you and your company.
Position for easy acceptance
Sometimes, negotiations will deadlock at the last moment. The buyer’s side refuses to budge, yet the deal makes perfect sense. When there is no clear reason, it is likely the buyer’s ego is getting in the way. If they say “Yes,” they will feel like you beat them. Many deadlocked buyers can be overcome if you appease their ego. Let them know they have driven a hard bargain and offer a very small concession as an act of good faith if they agree to move forward right now.
EXAMPLE: You sure are a tough negotiator. Unfortunately, I cannot drop my price any further. But there is one last thing I could try to do for you. If I get approval from headquarters to add a dozen free batteries to your handset order, would you approve the paperwork today?
This makes them feel like they have squeezed extra from you, and it’s very easy for them to say YES.
WARNING: Only offer the concession on a truly deadlocked deal, when you are about to walk away. You will know it because you have been grinding away and there is no longer any logical objection. If you offer a concession too soon, you will encourage the buyer to continue “nibbling” until they get more and more from you.
Discover their price
Another thing we teach in our sales negotiations workshop is that buyers know whoever offers “their number” first is usually at a disadvantage. You as a seller have a figure in mind, and the buyer has their own, which they try to keep secret. They want you to talk price first so they can flinch and get a better deal – even if the price you offered was below what they were originally willing to pay.
On the flip side, if you can discover the highest price they are willing to pay, or at least the range, you have power. You can avoid giving up margin via concessions and might also make more money by adding services or products to your original offer.
The first way to discover their price is to straight out ask them: So that I can better advise you, what’s your budget for this? It’s a direct question which, if answered, creates an easy starting point for negotiation – even if they lowball you. Try that first.
If they act coy, or otherwise refuse to name a price, you can use some humor like: Great, since you are holding your number close to the chest, may I assume you have an unlimited budget? Pitch them your most expensive offering with all the bells and whistles, and they will usually give you a more down-to-earth range.
You can also try: Look, some clients can go as high as $50,000 for a package, while others can only do $10,000. For me to have an accurate idea of your needs, please tell me: around where does your budget live?
Take it away
In our sales negotiations workshop, we teach a method for overcoming a buyer who keeps trying to talk you down. When a buyer asks for a lower price, remove a feature or service when presenting the discounted offer to them.
First of all, this teaches them that each concession has a cost – they can’t just keep nibbling for free. Second, they tend to think more about the items you removed than the discounted price.
If you have been following our work on emotional intelligence, you know that our brains place more importance on avoiding pain than seeking pleasure. Therefore, a discounted price is pleasurable to the old brain – but the pain of losing all those great benefits is greater!
EXAMPLE: It’s hard, but I can possibly knock $5,000 off the invoice. In order to make that work, we will have to remove the warranty and you’ll have to set up the equipment yourselves. Of course, if you hit a snag, you can pay for us to come out and do it for you, but that might end up costing more than $5,000 if your technicians have damaged anything. Does that still seem worth it, or should we leave the deal as-is for your peace of mind?
After one knows the ropes via sales training and on-the-job experience, the next step for every salesperson should be a sales negotiations workshop. You can literally give yourself an instant pay raise if you negotiate with a buyer wisely!.