Felix Dennis, the late entrepreneur and founder of Maxim magazine wrote that while most people think that they’re good negotiators, very few actually are. He even suggested that if you ever need to negotiate a big deal, you should send someone in your place who is better at it than you are.
Unfortunately, salespeople don’t have that luxury. And while most of us see ourselves as above average negotiators, probability suggests that’s probably not the case. But not to fear, like anything else, negotiation is a skill you can develop with time and practice. Here some tips to help you get started:
1. Let the buyer speak
Have you ever started negotiating and found yourself rambling on and on, to the point where even you’re uncomfortable with what you’re saying, yet somehow unable to stop? If so, you definitely didn’t help your negotiating position. When negotiating, let the buyer speak and keep your side of the negotiations clear and concise. Also, whenever possible, let the customer tell you what they’re looking to get out of the negotiations. The more you know about their position, the more you can use it to your advantage.
2. Always know your bottom line
You need to always be willing to walk away, and knowing your absolute bottom line is key. If a deal can’t be made, there’s no point in wasting your or your prospect’s time any further, so always understand what your rock bottom is. If you’re afraid to walk away, or desperate to make a deal, you won’t negotiate well. That’s why understanding when a potential deal is no longer viable is key since it’ll act as a red line at which point you’re no longer able to do business.
3. Focus on the buyer’s pressures, not your own
As salespeople, we tend to focus on our own pressures when doing business. Will I close this deal? Will I hit my quota? Will my spouse leave me for my best friend if I don’t? But focusing on your own problems is the opposite of what you should be doing in negotiation since it puts you in a less powerful position. Instead, focus on your buyer’s pressures. Ask the right questions and find out what problems they’re trying to solve, and why they need to solve them. Your power in a negotiation comes primarily from the pressures that the person who you’re negotiating with faces.
4. Never give concessions without getting something in return
It’s perfectly normal to give concessions in a negotiation, especially when you’re a salesperson. But try to get in the habit of getting something in return. For instance, if a prospect wants a discount on the price, make it conditional on a longer contract. Or if a prospect wants something else thrown in with their purchase, make it conditional on signing a deal immediately. You can make the arrangement any way you want, but make sure you’re not making concessions and getting nothing in return.
5. Make sure price is always the last negotiation
It’s ok to discuss budgets early on, but don’t ever negotiate the price unless everything else has already been negotiated. This is because money is almost always the only thing your company will ever receive from the buyer, and agreeing on price first can put you in a disadvantageous position if the prospect starts negotiating the other terms of the deal after you’ve already made a price concession. Make sure that you’re only negotiating the price when it’s the last thing standing between you and a deal.
6. Don’t take anything personally
Far too often, we let other people’s attitudes and behaviors cloud our judgment in a negotiation. To be a truly effective negotiator, you need to be laser-focused on the result that you’re looking for, and not on how the process is making you feel, or whether the person we’re negotiating with said something distasteful or with the wrong tone. This is easier said than done but try to detach yourself from the situation and not let anything sidetrack you from a closed deal, and a bigger paycheck.
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