Sales negotiation can be a source of dread for salespeople. It’s especially painful when a rep thinks they’ve closed a deal and then the prospect surprises them by wanting to “talk about the details.”
With the right sales negotiation strategy, even this part of the sales process can remain warm and result in a win-win outcome for all parties.
Here are 9 sales negotiation skills your salespeople need to master to avoid price concessions and protect your profit margins.
1. Talk to the Right People
Nothing is more disheartening than settling on a deal with someone, only to find out they don’t have the final say in the decision-making process.
Help your salespeople reduce the odds of this happening by coaching them how to identify and reach decision makers early in the sales process.
[Learn how to identify the 5 characteristics of a qualified prospect in this blog post.]
2. Establish the Customer’s Pain
Prospects who understand their own pain will be more motivated to alleviate it, and less likely to push back on price.
Skilled sales professionals identify customer pain early, bring it to the prospect’s attention, and quantify its financial and emotional cost out loud to the prospect.
3. Build the Relationship
Buyers are far less likely to “play hardball” when they’re negotiating with someone they view as a trusted partner.
Teach your sales reps to establish trust and build the relationship early in the sales process to reduce negotiation friction later.
4. Quantify the Value
When a prospective client clearly understands the value of a solution, they are much more likely to be willing to pay what it’s worth.
Help your salespeople learn to clearly identify and, when possible, quantify the value of the solution as differentiated from competitors.
There are great questioning techniques to accomplish this, including the 3-deep strategy.
Using a 3-deep questioning strategy, the conversation with a prospect to quantify value might go something like this:
Sales Rep: So, you’re having delivery issues with your current supplier. How does that translate to your business?
Prospect: It’s delaying our delivery to hospitals and ambulance drivers who need and expect the products on time.
Sales Rep: What impact does that have on your efficiencies and bottom line?
Prospect: We spend a lot of time, energy, and money negotiating the returns and tracking down deliveries. It’s cutting into our profit margin substantially, not to mention it creates a ripple that ultimately affects patients.
Sales Rep: What would it mean to you to have guaranteed quality products delivered on time?
Prospect: We really want to partner with a high-quality company that can deliver on time, every time. We spent over $5,000 last year alone on issues relating to returns.
5. Know Your Bottom Line
Sometimes, following steps one through four can eliminate the negotiation process altogether.
If the sale does go into a negotiation process, teach your reps to be thoroughly prepared by knowing in advance exactly how low they can go and still result in a win-win situation for all parties. This will ensure they don’t make promises in the heat of the moment that they later regret.
You can also motivate reps to avoid price concessions by the way you structure their sales compensation plan.
The Sales Negotiation Training program will teach your sales reps the negotiation skills needed to overcome objections and sell more at premium prices. Watch the video below to learn more.
6. Stay Calm and Act Like a Partner
Prospects can smell fear from a mile away. After all, prospects are people and people pick up on non-verbal communication.
Teach your salespeople to stay calm, confidently stand their ground, and maintain a partnership approach to the conversation—even if the prospect takes an adversarial stance. Remember that the goal is to develop long-term relationships that benefit both parties.
7. Listen to What the Prospect Really Wants
Sometimes, the other party will ask for a price discount when what they really want is not a cheaper solution, but more value, less risk, or simply the feeling that they’ve gotten “a good deal.”
Faced with a negotiation, sales professionals should step back and listen carefully for what the prospect really wants. Coach them to ask probing questions and to pick up on both verbal and non-verbal communication in order to get to the true cause of the prospect’s hesitation.
8. Look for Alternatives
Price is the most commonly negotiated item in a contract, but it’s not the only way to find a win-win outcome.
Teach reps to look at other options, such as:
- Starting with a smaller initial commitment in order to build trust
- Taking something away from the package to lower the price, or
- Providing more favorable payment terms
Many times, sales reps will find the prospect concedes after alternative solutions have been made, as they feel it’s their job to at least try to get the best price possible.
9. Be Prepared to Walk Away
Sometimes, even the most skilled sales negotiations go awry.
If a prospect makes unreasonable demands and won’t budge, or if they simply can’t be adequately served under the terms they need, then it may be time for the rep to walk away.
In many cases, being prepared to walk away from a bad deal will motivate the prospect to step up and accept a more favorable solution. In other cases, it just means the salesperson avoids stepping into a situation that they’ll later regret.
Sales negotiations can feel intimidating for a sales rep. With the right training and coaching, however, your reps can feel empowered to hold their ground and create a win-win solution for all parties involved.
You may also enjoy this short webinar.
Published on August 29, 2018