I am often asked by clients about best practices to avoid having to negotiate. My answer is you don’t! Don’t avoid it and don’t fear it. World-class sales reps have a negotiation strategy and are skilled at executing the tactics to be successful. With confidence, they welcome the opportunity to negotiate since it is an integral part of the sales cycle that leads to closing business.
At ValueSelling Associates, we coach our clients on how to negotiate more effectively. Here are a few tips that will sharpen your skills to strategically negotiate.
- Timing: You may be armed with incentives to offer your prospect, hoping to create urgency and expedite a signed contract. Perhaps this incentive is an introductory price, discounted service agreement or embellished deliverables. Whatever the incentive, how and when it is communicated is critical.
We advise sales professionals NOT to negotiate before the prospect is a fully qualified. Negotiating before the client is sold is rarely successful. Throwing out incentives that are premature or irrelevant can damage the relationship and do more harm than good. In the ValueSelling Framework®, the qualification process has multiple dimensions. There are four questions you need to confirm with the prospect to adequately qualify the opportunity:
- Should they buy this from you?
- Is this worth it to them?
- Do they have the authority to purchase?
- When will they execute on the decision to buy?
Offering incentives before a prospect is fully-qualified will diminish your credibility as a sales professional and potentially devalue your offerings in the buyer’s mind. It can be perceived as very self-serving and only in the best interest of the sales person, not the prospect.
- Empowerment: As a sales professional, are you aware of your negotiating parameters? Every organization draws a line in the sand for what’s considered negotiable. What are you empowered to negotiate? What is non-negotiable? To be a successful negotiator, you must understand where your authority lies and when escalation is required. Also, it is important to realize that there are always multiple terms to negotiate on. Price is never in a vacuum, and while many prospects attempt to focus the conversation solely on price, the negotiating-savvy sales professional will expand the discussion to include terms and deliverables to create potential tradeoffs.
Overcommitting or making promises that you are not authorized to keep will lead to problems both internally and externally down the road. Instead, be empowered with the knowledge of what you are prepared to negotiate.
- Mutual Understanding: The key to a win-win negotiation is simple—both parties must have a positive outcome. For a mutually positive outcome, it is essential to understand what needs to be in place for both sides. You already know what you need, but thoroughly understanding your prospect’s intentions is key to creating an effective negotiation strategy.
Ask yourself, what is valuable to the other party in this negotiation? How can I make sure that all needs are satisfied as thoroughly as possible? With that end in mind, prepare your strategy and approach to the negotiation. A mutual understanding of end-result intentions will lead to positive outcomes for both parties involved.
Is negotiating a strategy or skill? It’s both, and certainly not a predicament to be feared. Successful sales negotiators know when to negotiate, what is negotiable and how to execute a solid negotiation strategy.
Sell with Value!