"Jacob, tell me about your product and pricing in detail. You’ve been discussing this with Emma for months now and she seems convinced. So, today we are here to close the deal.", said Olivia, CTO of the client’s company. This was Jacob’s only chance to win the deal. It hasn’t been easy to fix this one meeting. Jacob went on to tell the pricing that Emma had already negotiated with him. The product was far better as compared to its competitors. There were unique features that weren't available with anyone in the market.
“Jacob, the pricing of your product is going way beyond our budget. There are similar products available at half the price.”
“But we provide features that none of our competitors do.” Jacob, further, went on to explain the value of his product.
“We don’t need such an extensive product. Many of your features aren’t even useful for us. Do you have any alternative plan at a lower price?”, asked Olivia while explaining her exact requirements.
Jacob wasn’t prepared for this. He presented the existing solutions but Olivia rejected all of those.
“Jacob, if there’s a plan suited exactly for the business that can fetch us maximum ROI, fix a meeting next month. Emma will take this ahead.”
The meeting lasted for around 45 minutes. And he felt like he’s back to square one. This situation is an everyday story of salespeople. Their life revolves navigating around immediate situations and escalated matters. Sales negotiations aren't easy to execute, and a very rocky domain to drive a car with incompatible tires made of lazy tactics. There are a lot of ups and downs, and one needs to be “nearly perfect” to sail through it successfully.
Sales negotiation strategies are continuously evolving. And a salesperson needs to keep updating their skills as they move ahead. But there are a bunch of sales strategies that remain constant, which can elevate one’s sales negotiation skills. So, if you’re a salesperson, take a look through some of the distilled areas in sales negotiation to elevate your conversion rates and become well-equipped to get into the boxing ring of sales.
Sales negotiation strategies that always work
1. Be positive throughout the sales negotiation process
It’s not just you who’s willing the deal to be successful. Your client wants it as much as you do. People always come with an intention to buy your product not to reject it. Consider the customers as your partner instead of an opponent in a debate. So, be confident and keep yourself positive throughout the sales negotiation process. Your positivity reflects in the tone of your voice, your body language, your responsiveness and every bit of conversation you do with the prospect. While making sales, actions speak louder than words. Your non-verbal body language speaks more than your tongue. So, the first war to be won is the battle inside you yourself against defeatist thoughts.
2. Research, practice, and prepare yourself:
This is the most crucial step in any sales process. Research your clients thoroughly. Their history, past problems, existing pain points, competitors, and other sensitive information. The more information you have about the other party, the better position you’ll be in to negotiate. Let’s take a few examples:
i) If you’re involved in B2B sales with a startup, and you know that the startup has recently received huge funding, it’s clear that its paying capacity is better than a bootstrapped one.
ii) If the client’s demand is being generated due to any major change in government policies, it’s certain that he/she will buy the product/service within a certain time frame. In this case, you need not explain to the customer the basic functions of your product/service. Rather, just focus on the reasons why your product is better than your competitors and is best suited for the
client. After you’re done with your research, prepare your pitch. Customize the offers if possible. And finally, practice it. Being spontaneous doesn’t always work. So, practice the conversation that’s likely to come up.
3. Know the best and worst outcome:
Don’t be upset if things don’t go your way. Be prepared mentally for anything that comes up. Sales negotiations take the most unexpected turn when you’re least expecting it. Also, being aware of the highest and lowest expectations from the other party helps you reach a middle ground smoothly. It’s like knowing what your client likes and dislikes, and then presenting a mix of both the items on their plate.
4. Present your thoughts in an articulated way:
Persuasion is the most important thing that drives sales. When you believe in what you’re saying, you become more capable of convincing the other party. So, believe in what you’re negotiating for, and you’ll shine. Next thing is, you must know how to present your thoughts. Articulate your thoughts in a way that makes others see value easily. There are two ways you achieve this. Be direct and clear when presenting a situation. Be honest about what the client should expect. And discuss ways to achieve the same. While you discuss implementing your solution, also tell your clients the impact that it will make on them or their business. Talk about the benefits your client will get once they buy your product or services. They will be far more interested in listening to you.
5. Smaller wins LEAD to bigger wins:
Don’t get disheartened if things didn’t go your way. Very often, the client doesn’t say yes to everything that you’re offering. This is where sales negotiation plays a big role. When you hear a ‘no’, give an offer that the client can say ‘yes’ to. Negotiate for lower hanging fruits and take small orders. Offer your prospects free trial, proof of concepts, or smaller monthly packages instead of bigger annual plans. This helps you prove the value of your products/services, earn credibility, and build a positive relationship with the client. For a salesperson, getting a foot in the door can be the start of long-term profitable partnership opportunities.
6. Develop impeccable listening skills:
Everybody likes being heard, even your clients do. So, while negotiating, keep calm and listen to everything your prospects say. Focus on their major concerns, expectations, and listen carefully. Listen twice as much as you speak. Sometimes, in the spirit of being accommodating, salespeople offer a discount or an adjustment even before the prospect opens their mouth. But you don't know what they're going to say! So, listen carefully if you want to make bigger profits.
7. Put yourself in the customer’s shoes:
When you put yourself in place of your client, you get a better picture of what the other person might be expecting. You begin to feel the pain points of your clients. This helps you refine your pitch and come up with proposals best suited for the prospect. This also makes your potential customers feel more connected because their viewpoints are being considered. This, in turn, helps you in winning their trust and creating a positive impression.
8. Don’t argue. Put forward the number strategically:
Your customer deserves the utmost respect. Your job is to talk to them in the most peaceful way you can. Don’t make your client feel defensive even for a single moment. Never criticize their needs, demands, motives, or behaviors. If you bully your prospect, it will completely block effective negotiation. Moreover, you must create an arena of fairness in mediating discussions about the numbers. It should be done in a mutually beneficial fashion where you don’t settle for less than what is desired.
9. Psychology works everywhere:
Understand how general human psychology
works. Your clients are no exception. If a potential customer senses desperation or neediness in the sales pitch, the salesperson becomes prey to being taken advantage of. So, even if you’re desperate, never show it. On the other hand, if the client is desperate to buy your product or services and you show indifference to that by being relaxed or initiating a delay, it creates psychological tension on the client's end. This eventually results in a better agreement. 90% of the entire sales negotiation process is a purely psychological strategy. Just be the master of your own emotions, and you will definitely nail it.
10. Don’t make promises you can’t keep up to:
One of the worst mistakes you can make as a salesperson is to promise what you can’t keep up to. Sales are mostly target-driven for businesses, and this puts a lot of pressure on sales agents to close deals as quickly as possible. And this is why salespeople end up offering things the company can’t even afford. Never promise extended customer support or an additional 30% discount just in the heat of the moment. See if it’s feasible or not. Make logical negotiations when closing a sales deal. Don’t keep yours and your company’s reputation at stake.
11. Never ever give a range:
Consider a situation when you go to buy a product and start negotiating with the salesperson. If at any point, the salesperson says, “Give anything between 30-40 bucks,” it’s 100% logical that you won’t give a penny more than 30 bucks. Once you know that the salesperson will make a profit even at 30 bucks, your brain starts negotiating for something less than that. So, giving a range during negotiation is a foolish thing to do. Always quote one specific number or figure and then go higher or lower as necessary.
12. Negotiate with the right decision-maker:
This is obvious, isn’t it? But many times, you don’t get to speak to real decision-makers at all. You might lose the deal even before that. So, when you’re speaking to someone who’s just a mediator, your goal should be to reach the right decision-maker instead of winning the deal. Also, when you jump into negotiation with the wrong person, it’s obvious that the real decision-maker will negotiate even further. At this point, you might lose the deal or settle for a loss, which is not at all a great outcome for you.
13. Create a win-win agreement:
Create many different options instead of just one. Be ready with proposals that mutually benefit both parties. The path to a win-win agreement lies in creating a bigger pie, not just dividing the existing pie. Knowing the customer’s major interests helps you achieve this objective. For example, a startup wants a system that automatically addresses customer queries. You’re offering software that keeps customer data in one place as well as resolves the queries based on previous tickets raised by the customer. The client is unable to buy your product due to budget constraints. You can solve the problem by providing customized solutions. You may limit the number of customer queries that can be handled each day. Alternatively, you may limit the number of new customers that can be added to the system each day. So, you must understand the customer's interests in detail if you want to build creative solutions of mutual interest, by carefully building up your negotiation tactics.
14. Walk away if the situation calls for it:
This is something that salespeople learn the hard way. It’s not always about saying ‘yes’. You can even say ‘no’ with all due respect and simply walk away. You don’t need to onboard a customer at your loss. That defeats the whole purpose of making a sale in the first place. If the prospects’ demands become unreasonable and
it’s clear that the deal won’t be profitable or beneficial for your company, it’s better to walk away. Sometimes, walking away can even make the prospect reconsider their position and come back with a better offer.
15. Follow-up is equally important:
You should always follow-up with your prospects after the negotiation is over. Don’t just leave them hanging. Send a follow-up email thanking them for their time and expressing your willingness to continue the conversation. This helps in building a positive relationship and keeps the lines of communication open for future opportunities. Many times, a deal is not closed in the first meeting. Follow-ups play a crucial role in getting the deal across the line.
Sales negotiations are a blend of art and science. They require a deep understanding of human psychology, effective communication skills, and the ability to create win-win solutions. By applying these strategies, you can significantly improve your sales negotiation skills and increase your conversion rates. Remember to stay positive, prepare thoroughly, listen actively, and always strive for a mutually beneficial agreement.