Getting the Most Dollars Out of Each Sale
How To Avoid Getting Chewed Up
in the Negotiation Process
Your negotiation skills will make or break you as a sales professional.
Even if you make more deals than anyone else in your company, if your deals are negotiated poorly, you will perform poorly overall. At the end of the sales cycle, it will not be the number of deals that you have won, but the overall cash value of your deals that will matter. This makes having top negotiation skills essential to not only your success as a sales professional, but to your very survival.
Here’s what you can do to improve your negotiation skills and make sure that the money you win on each deal is commensurate with the level of effort you put in:
Proper preparation is always what makes the difference between a well negotiated deal and a flop. This means that you need to be ready for every possible contingency before you even start talking. First of all, this means being continually educated on effective selling methods by reading books on sales, checking out online resources like SalesRoundup.com, and having regular conversations with pro sellers in your organization.
But second, this means doing the proper research and planning that is necessary to understand both your own company’s needs as well as the needs of the customer. Following the five guidelines listed below is a great way to start.
1. Know Your Organization
Be aware of what types of compensation and discounts are acceptable to your corporation in a deal of this magnitude. Have this information worked out before you start talking. You don’t want to tell your customer that you can give them X discount only to withdraw this offer later because it violates your company’s selling regulations.
2. Know When to Walk
If the customer is simply not willing to give a price that will make you and your organization happy, it might be time to walk. More often than not, the customer will recant their objections at this point and be willing to compromise, if only to bring you back to the table. If the customer knows that they can force you to give them the deal no matter how low they make the price, they will never stop badgering you to give them more and more discounts.
3. Know What Your Starting Price Is!
Never start negotiating without having this number worked out. The initial number that you state should be considerably higher than the minimum that you are willing to accept, because it is only going to come down from this point.
4. Know Your Customer
Know before hand what your customer’s needs are. If they have a policy stating that they only accept deals once they have gotten a 10% discount, make sure that you are prepared for this. Make them fight for this discount. If you just give it to them off the bat, they will only want more.
5. Get Something for Everything that You Give
Never make concessions without getting something in return. If the customer demands a discount, tell them that you can give it to them only if they are willing to do something for you (e.g. agree to close the deal earlier, increase the total order quantity, etc.).
This post was inspired by the SalesRoundup Podcast episode titled “Let’s Make a Deal – Behind door number one Principles of Negotiation”
We did this show before we changed our website, so you will need to scroll three quarters down the site to find Episode 74 “Let’s Make a Deal – Behind door number one Principles of Negotiation”
Mike & Joe