One of the most delicate parts of the sales process surround negotiations, and the subsequent anxiety it may cause. Over the course of your sales career, how often has a customer told you that the price must be lowered by 'x' amount, or that you must provide additional concessions in order to gain or retain their business? Most likely, the answer is more often than you would really wish to hear. And the reality is; it is likely that you will continue to face these situations often and find yourself in the middle of another sales negotiation.
Below are some strategic tips to keep in mind, and take to heart, when it comes to negotiating sales.
1) Don't always believe what you see and hear
An integral component of being a top-performing sales professional is to develop the ability to read people and situations at an extremely rapid pace. This also means being adaptable at the drop of a hat - when it gets down to sales negotiations, you have to remember to take everything you see and hear with a grain of salt.
Many buyers are skilled negotiators, and you could very well be the top vendor in your vertical and be able to provide them exactly with the product or service they need, only to receive a lukewarm response from them when you get to the end of the sales process. What the client does and says during a sales negotiation should be carefully and quickly assessed. This includes the full spectrum, from body language to needs communicated to word choice. Many of their verbal and non-verbal clues are designed to make you believe that unless they get that additional concession or discount, that they will go with the competition.
Though it may be difficult to stay objective and not feel pressured, keep in mind that sales negotiations don’t have to be a game of cat and mouse. This is especially important if you know you have made a fair offer that falls in line with average pricing for your goods and services within your industry and fully meets their needs.
2) Keep an eye on the competition
The earlier point ties into this one as well -- know your competition, and more importantly, your product offerings compared to others. The better you understand the marketplace, the players in it, and their offerings, the better you will be able to leverage your position in the negotiation.
This knowledge will take many forms, but customers are a good source of this information. Ask who else they are considering, what they like about other offers on the table, and use that feedback to improve your own position. If a sale did not go through, it might be worth following-up with a win/loss analysis. Though it might be tough to hear at first, it is essential for any kind of long-term professional development.
Moreover, having a clear understanding of key competitive points as well as your customer needs and where your solutions align will directly feed into your negotiation strategy and help you come out stronger.
3) Don't offer your bottom line early on
One of the key points in a negotiation is to hold off showing your hand early. How many times can you recall being asked to "give your best price."? And once you have offered your best, how many times has a customer asked to go lower?
Think of it this way, if you could lower your price by 10%, start out with a 2 or 3% discount to leave yourself some room for additional concessions. The buyer might be satisfied with a 5% discount, thus preserving the other 5%.
4) Be patient
Our final and most important tip? Be patient, seriously. Sales is a quick-paced business, and chances are patience is a commodity that is in relatively limited supply. However, impatience often tends to be palpable, and you may end up pulling the short straw if this impatience shows through during sales negotiations.
If a buyer senses impatience on your part, they may hold off just a little longer...no matter how much you want to close the deal. As long as the buyer is aware that you want to get this sale in the book, and finish out the month strong, they will wait.
Take your time, do not rush or hurry and try not to show your anxiety...and most of all, resist the urge to panic. Sales negotiations are both a process and a game, so use the process to your advantage and play the game. You'll be astonished at the difference that it makes!
To wrap up, keep this final piece of advice in mind: sales negotiations can be stressful and fraught with emotion for both sides – the buyer and the seller. As a sales professional, try to keep your customers’ best interest at the heart of your negotiation strategy but also know your position. Long-term business relationships are built on trust, not who comes up ahead during price negotiations.