What is Negotiation?
Sales negotiation refers to a conversation between a sales rep and a decision maker, where both sides outline their expectations and what exactly they’re willing to provide for a sale to be finalized. Negotiation typically happens over multiple conversations as both sides come to a realistic agreement.
Why is Negotiating Important?
The negotiating process can be stressful and difficult, but it’s extremely important. A sales rep wants to close out a deal and generate revenue, but their sales prospect wants to ensure their needs are met and budgetary restrictions are respected.
It’s essential that the final terms are agreeable on both sides so each party is happy, respects the other, and is excited to continue their business relationship in the future.
Members of the sales team can’t show their stress; they must remain calm and composed. This is important as it ensures the process goes smoothly, and unnecessary tension isn’t created. The negotiation process should be as smooth as possible.
Tips for Sales Negotiations
Negotiation is an invaluable skill for any member of a sales team. Experience will help guide your process, but there are many tips to remember and incorporate as well.
Be Prepared
Never walk into a negotiation without a plan. Do your research beforehand, and get ready to deal with potential sales objectives, detailed questions, and requests for additional information related to your product. Anticipate the needs of who you’re selling to and be prepared to provide answers.
Practice Active Listening
Always listen to what your buyer is saying. A negotiation meeting is not the time to let your mind wander. Pay attention to their questions, what they’re hesitant about, and any concerns they may have. They may not be upfront with their questions, so read between the lines to determine what exactly they’re saying.
Know Your Limits
A buyer may be pushing for a hefty discount, and if the negotiation period has been dragging on you may want to give in. Don’t. In hindsight, lower prices can become an issue, especially if it leaves you further away from your revenue targets.
Know exactly what you can and can’t offer during a negotiation. Some wiggle room can be given but stand firm when needed.
Talk to the Decision Maker
Don’t waste your time talking to the wrong person. Ensure you’re speaking directly with the decision maker when it comes to negotiating, as they’re the one with the final say. If you’re talking to an intermediary, communication can get messy, details can be lost, and the process becomes frustrating for everyone.
Focus on Product Quality (It’s Not Just About the Money)
A lot of potential buyers will try to negotiate for a lower cost. Again, know your limits and stick to them. If you’re already offering the lowest price possible, focus on the product’s quality, its unique features, and remind the buyer how it will help them achieve their goals. It’s easy to get caught up on prices and forget how beneficial a product is.
Don’t Panic
Do your absolute best to stay calm during the negotiation process. Ask others on your team for advice and tips, and ensure you’re composed before joining a call or meeting. It’s ok to take breaks and collect your thoughts before proceeding, especially if your buyer is asking for additional information.