Berkshire Hathaway CEO Warren Buffett is one of the world’s most successful investors, with a net worth of $135 billion. He’s also earned a reputation as one of the world’s most skilled negotiators.
Buffet is known for doing his research and preparing for negotiations with meticulous detail. Successful sales professionals must be able to negotiate like Buffett, particularly in complex B2B sales environments.
Sales professionals in every industry face intense competition, changing customer demands, and pricing pressures. Here are eight sales negotiations skills to help your sales team identify value, negotiate favorable terms, and build strong relationships.
What’s the Difference Between Sales Negotiation and Overcoming Objections?
First, a quick overview of the difference between negotiation and overcoming objections. While overcoming objections and negotiating are related, they serve distinct purposes and involve separate approaches.
Overcoming objections is a critical step in moving the sales process forward and gaining the customer’s commitment. The goal is to provide clarification, counter misconceptions, and alleviate the customer’s objections or hesitations.
Objection handling involves addressing and resolving specific concerns, doubts, or reservations raised by the customer regarding the product, service, pricing, terms, or other aspects of the offering. It occurs throughout the sales cycle, from the initial prospecting stage to the final decision-making phase.
Negotiating is a back-and-forth dialogue between the sales professional and the customer, where both parties aim to reach an agreement that meets their needs and interests. The goal is to find a mutually acceptable compromise or solution that satisfies each side’s objectives.
Negotiation often focuses on specific terms such as pricing, delivery timelines, payment terms, or additional services or warranties. It typically happens toward the end of the sales cycle, once the customer has shown interest and is considering the final terms of the deal.
The main differences are:
- Timing: Objections can arise at any point during the sales process, while negotiations usually occur near the final stages.
- Focus: Overcoming objections addresses specific concerns or doubts, while negotiating involves bargaining and finding compromises on deal terms.
- Approach: Overcoming objections often involves providing information, clarifying, and addressing misunderstandings, while negotiating involves a give-and-take process of finding common ground.
- Outcome: Overcoming objections aims to alleviate concerns and move the sales process forward, while negotiating aims to reach a final agreement on the deal terms.
It’s important to note that, while these are distinct activities, they are interconnected.
Effectively overcoming objections throughout the sales process can set the stage for more successful negotiations by building trust, addressing concerns, and demonstrating value. Conversely, strong negotiation skills can help overcome objections related to specific deal terms or conditions.
Top Sales Negotiation Skills to Drive Growth
The most effective negotiation skills in sales are based on a value selling approach. Value-based selling focuses on the benefits of a product or service to a potential customer, or prospect, throughout the sales process. It’s also known as value-added selling or consultative selling.
By embracing a value-based selling approach and incorporating these negotiation strategies into your sales training, your team will be able to position themselves as trusted advisors, differentiate their offerings, and achieve win-win outcomes that drive customer success and long-term business growth, just like Warren Buffett.
1. Define the Value Proposition
Before entering a negotiation, clearly define the unique value proposition your product or solution offers to the customer. Understand their specific pain points, objectives, and desired outcomes. Quantify the potential benefits—such as increased productivity, cost savings, or competitive advantages—to build a strong case for your offering’s value.
2. Believe in Your Value
Conviction in the value you bring is essential. If you don’t truly believe in the worth of your offering, you won’t be able to negotiate effectively. Conduct thorough research, gather customer success stories, and build confidence in your ability to deliver tangible results for the customer.
3. Understand the Customer’s Behavior Style
Leverage tools like DISC assessments to understand the customer’s behavior patterns, communication preferences, and decision-making styles. Tailor your approach accordingly, whether you’re dealing with a dominant, analytical, or steady personality type.
4. Anticipate and Prepare for Buyer Tactics
Be ready to respond to common buyer tactics, such as comparisons to competitors, threats, or quick compromises. Understand the customer’s budget constraints and decision-making dynamics to counter these tactics effectively.
5. Ask Probing Questions
Steer the negotiation by asking insightful consultative sales questions that uncover the customer’s underlying needs, motivations, and decision criteria. This allows you to position your value proposition more effectively and potentially uncover additional opportunities for value creation.
6. Listen Actively
Practice active listening during the negotiation. Summarize the customer’s key points to ensure understanding and demonstrate your commitment to addressing their concerns. This can also help the customer recognize if their requests are unreasonable.
7. Define a Successful Outcome
Understand what constitutes a “good deal” from the customer’s perspective. Align your negotiation strategy to ensure the customer feels satisfied with the outcome—fostering a long-term relationship based on trust and mutual success.
8. Know When to Walk Away
While maintaining a strong sales pipeline is important, be prepared to walk away from a deal if it’s not mutually beneficial. This demonstrates your commitment to value creation and prevents you from compromising on terms that could undermine your profitability or long-term success.
Sales Negotiation Skills Training from The Brooks Group
Find out how sales negotiation training teaches sellers how to protect margins, prevent discounting, and increase profitability.
