Boost Your Sales Commissions 5 Negotiating Tips to Increase Your Deal Size

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:

Be Prepared

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”

Good Selling
Mike & Joe
SalesRoundup Podcast

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4 comments for “Boost Your Sales Commissions 5 Negotiating Tips to Increase Your Deal Size

  1. ChuckfromDallas
    February 4, 2009 at 10:40 pm

    Joe and Mike:

    You need to dive deeper than knowing your customer’s needs. What problem are you solving for this customer? How much is this problem costing the customer now versus what you will save him or her? If you can determine these key things during the process and you save the prospect a ton of money there probably won’t be a need for much negotiation. If what you sell does not save money but helps them make money that also gives you leverage. If you don’t save them money or make them money you’re a sitting duck at the negotiating table. What are you even doing there?

    ChuckfromDallas

  2. February 5, 2009 at 6:52 am

    Here Here Chuck! Gone are the days that customers are buying “nice to have” products or services. I couldn’t agree more. Even in our sales approach we must shift the discussion to increase revenue or decrease cost vs … well the typical feature base approach.

    Mike and I are working on a show to help sales people develop a business case for their solution. It should be out in a few weeks. The basis of the show is the value proposition.

    Joe

  3. Tim
    February 6, 2009 at 7:26 am

    I have had to negotiate more on deal now then when the economy was good. There aren’t that many institutions that can lend money but in our market its also not just about the loans. Customers are very much focused on safety and soundness for deposits as well.

    We have had to negotiate on things that I would never have thought of before. Fee’s are higher because Earnings Credits are down so we have the Asset and the Liability side of the balance sheet to look at. What we have gotten good at is looking at the entire ROI of a transaction. What are we saving you with our Remote Deposit ($3,000/year) etc etc and tying all that into the transaction. This has really made us better as sales people since we have had to learn what the customer is going to focus on and what their hot buttons are.

    Thanks for the coaching guys.

  4. April 15, 2011 at 4:20 pm

    Let me explain something. The link below will direct you to to the most powerful sales manager tool which uses your Excel commissions spreadsheet.

    http://www.oneclickcommissions.com/sacp.html

    Seeing as how the visitors to your site are seeking some form of professional improvement, it is important they be made aware of this tool.

    This benefit to you (asides from eternal gratuity from said visitors) will be the general enrichment of your site.

    Tell you what I’m willing to do- I will let you keep this post just so long as you continue promoting your site. Better yet, when this product reaches its final release, you may even be allowed to write a review of it for your blog.

    OK.. How did I do? Hopefully I didn’t overlook tip #2.

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