The likelihood of someone signing the first draft of a sales contract is slim.
If you are on the receiving end, it’s crucial to look over every detail of that contract and get back to the offeror with any changes you think need to be made to reflect your original agreement. If you are on the offering end, you should expect the same behavior from the recipient.
In the context of sales, this back and forth discussion is referred to as a negotiation, and it’s a key step in the contract management process. These bargaining conversations involve both parties getting as close to what they want as possible while also appeasing the others involved.
Business negotiations can instill stress in even the most experienced sales professionals. Depending on the experience, stubbornness, and sales savvy of the other party, it can be an extremely difficult sales tactic to master.
10 sales negotiation tactics
If there’s one thing to remember as you start sales negotiation training, it’s to never walk in without preparing and never underestimate your customer (who, at this point, is sort of acting as your opponent).
When you’re so close to closing a deal, you’re going to want to do everything you can to bring home the bacon. Practicing these sales negotiation skills is a good place to start.
1. Get ahold of decision-makers
Negotiations aren’t going to be the first step in your contract approval process. To reach this stage, it’s likely that you’ve already had multiple conversations with your prospect.
So hopefully at this point you’ve figured out who the key stakeholders are in the decision-making process within your customer’s organization. There’s nothing more discouraging than going back and forth in a tireless conversation with someone who ends up having no authority to make buying decisions.
Train your sales team on how to properly identify any decision-makers early on in the sales process. While this isn’t necessarily a negotiation tactic, it will pay off immensely when your reps do finally get to that stage. Before any move is made to sell to your prospect, do research to pick out the most influential parties within the business and target your outreach toward them.
2. Remember your bottom line
Before you walk into a negotiation, you need to determine your bottom line and engrain it in your brain. Your bottom line refers to the lowest point you’ll go in the negotiation while still considering the end result to be a win.
While some asks that a customer presents might not seem too bad in the heat of the moment, you don’t want to commit to something that will end up doing more harm than good for your business.
Define any and all concessions you are willing to accept before the conversation starts. Establish the most you’ll give or take off of things that a typical customer might ask for, such as price discounts, freebies, or add-ons. Make these clear so reps don’t promise unrealistic things in the heat of the negotiation.
3. Identify their pain point
This one is another pre-negotiation tip, but incredibly important nonetheless. As you initiate discussions with your prospect, make sure that you identify the pain point that your solution will aim to resolve. And don’t you forget it.
Ask them questions about problems they are facing with the solution they currently use and how those issues are affecting their bottom line. To really drive it home, challenge them to think about what it could mean for their business to eliminate that pain point altogether (potentially with your company’s solution).
Throughout your sales negotiations, keep your customer’s pain point top of mind and connect it with the benefits of your solution during your conversation. This will come in handy, especially when implementing the next tip.
4. Quantify the value
You can only say “my solution will help your business save money/increase revenue/improve organization” so many times. That might work when you are getting customers to bite the hook, but it might keep you from successfully reeling them in.
With your customer’s pain point in mind, find an associated benefit that your solution offers that can resolve it and then quantify that value. This can prove difficult for businesses, especially when the immediate value and benefits of a solution are hard to convert into numbers.
A good way to quantify value is by reciting statistics from previous deals. Here are some examples:
“Our solution helped Fake Company 500 save $10,000 in spend a year.”
“Our solution provided Fake Company 600 with the tools they needed to increase revenue by five percent year over year.”
5. Focus on the relationship
At the end of the day, the goal of your sales negotiation is to make a sale. But what about your goals as a sales rep doing their best to help customers find solutions that can help their business?
During your sales negotiation process, keep the conversation focused on the relationship you are trying to build with your customer. While closing a deal offers instant gratification, the long-term value of a mutually beneficial business relationship is always going to be more important to your company.
The same goes for your customer. The second they notice that you are more focused on making a sale rather than providing them with a valuable solution, they will start to feel undervalued, pressured to buy, and disconnected from you. All of those things put together will result in them walking away and you losing a customer.
Negotiating isn’t always about playing hardball. Building trust and understanding in your customers is crucial in making the discussion about becoming a partner, not an annoyance. While it’s important to keep your eyes on the prize, focusing on being helpful is equally important.
6. Highlight losses
Sometimes, what’s even more effective than making the value of a solution apparent is stressing the loss that a business can experience if they choose not to invest.
It’s easy for businesses to simply keep on keepin’ on and do things the ways they've always done it. A new solution might not seem necessary for them at the moment. Bring it home by stressing what their business is risking by not investing in the solution.
7. Don’t make it all about money
The most commonly negotiated part of a sales deal is almost always going to be money. And going back and forth about the price and discounts of a solution isn’t a part of the recipe for negotiation success.
Remember that price is tied directly to the value of the solution you’re offering. Customers aren’t paying for the product; they’re paying for that associated value and satisfaction.
Think about other benefits like add-ons and any freebies that you can afford to offer. An important feature that new customers will look for is guaranteed customer support. Anything that will make their experience buying, using, and optimizing your solution for their business is a win.
8. Listen to the customer
Even though you’ve gotten to this advanced stage in the sales process with the customer, it’s possible that you’ve lost sight of what they want out of this business relationship. In your head, it might be a solution for their business. But what they really want is something that will help them reduce costs, increase revenue, boost organization, and more.
Use your active listening skills to carefully identify exactly what the prospect wants. Don’t walk into a negotiation assuming you’ve got it all figured out. Things change, and so do a business’ needs. Ask the right questions to identify what the customer is looking for and find a way to deliver.
9. Find alternatives
With your bottom line in mind, you might have to settle for the best alternative to a negotiated agreement to keep your customer happy. There are plenty of ways to reach a win-win situation. That might include you starting with a shorter-term commitment than you anticipated or removing a feature from the deal to lower the price.
Again, the chances of you walking away from a sales negotiation thinking that the end result was the best case scenario are slim. It’s best to have a few alternative situations in mind that will still make you feel satisfied.
In the same arena is making sure you get something in return for your concessions. Healthy customer-business relationships require respect, so they won’t work if one party feels as if they’re making adjustments to please the other without getting anything in return. Make the alternatives about trading, not caving.
10. Know that you might have to walk away
If you really love them, you might have to let them go. Before any effective negotiation, it’s important to consider an undesirable outcome: walking away.
While closing a deal is important, there are some demands that just can’t be met. And that’s okay. Your goal is to help the customer, but the negotiation needs to reach a mutually beneficial agreement for that relationship to remain productive.
If the prospect is requesting things that are unreasonable, unprofitable, or impossible, walk away. If they aren’t seeing value in the offer as is, it’s likely that they’ll become dissatisfied later on, making your efforts an unfortunate waste of time, energy, and resources.
Establishing a bottom line is incredibly important in determining when it’s time to call it. If you’ve tried everything and reached your bottom line and the prospect still won’t budge, you can walk away knowing you’ve given it your best effort.
Give it your all
As you become more experienced in the art, your sales negotiation skills will improve. You never know, you might have a unique secret weapon that customers just can’t resist. But if you remember a few things, let them be this: you are in the business of helping your customers, and it’s okay to walk away.
Mary Clare Novak is a Content Marketing Specialist at G2 in Chicago, where she is currently exploring topics related to sales and customer relationship management. In her free time, you can find her doing a crossword puzzle, listening to cover bands, or eating fish tacos. (she/her/hers)
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