by Richard McCandless, Regional Director – Scotland & Newcastle
Negotiation is a vital skill in sales, and the power of negotiation in sales can make or break a deal. A salesperson who is skilled in the art of negotiation can close more deals, generate more revenue, and build stronger relationships with customers. On the other hand, a salesperson who lacks negotiation skills can lose deals, leave money on the table, and damage customer relationships.
In this blog, we will explore the power of negotiation in sales, including the key principles of negotiation, common negotiation tactics, and strategies for negotiating effectively.
The principles of negotiation in sales
Negotiation in sales is not about winning at all costs or taking advantage of the other party. Instead, it is about finding a win-win solution that benefits both parties. The following principles are essential for successful negotiation in sales:
- Preparation: Preparation is the key to successful negotiation. Before entering into a negotiation, it is crucial to research the other party and understand their needs, wants, and priorities. It is also important to know your own goals and limits and prepare your arguments and counter-arguments.
- Communication: Communication is critical in negotiation. Both parties need to be able to communicate their needs and want clearly and effectively. Listening is just as important as speaking, and understanding the other party’s perspective is essential for finding a mutually beneficial solution.
- Flexibility: Negotiation requires flexibility and a willingness to compromise. Both parties need to be open to different solutions and be willing to make concessions to reach an agreement.
- Creativity: Negotiation often requires creativity and out-of-the-box thinking. Sometimes, the best solution is not obvious, and both parties need to work together to find a solution that meets their needs.
- Patience: Negotiation can be a long and sometimes frustrating process. Patience is essential to staying calm and focused throughout the negotiation and finding a solution that benefits both parties.
Common negotiation tactics
In sales, there are several common negotiation tactics that buyers and sellers use to achieve their goals. Some of these tactics can be aggressive or manipulative, while others are more collaborative and constructive. Here are some common negotiation tactics to be aware of:
- Anchoring: Anchoring is a tactic in which the first offer sets the tone for the negotiation. For example, a seller might set a high price for a product to anchor the buyer’s expectations, even if the seller knows they will ultimately accept a lower price.
- Mirroring: Mirroring is a tactic in which one party mirrors the language or behavior of the other party to build rapport and establish trust. For example, a seller might mirror the buyer’s tone of voice or body language to create a more positive connection.
- Flinching: Flinching is a tactic in which a party reacts strongly to an offer or proposal, either positively or negatively, to create leverage in the negotiation. For example, a buyer might flinch at a high price to signal that they are not willing to pay that much.
- Good cop/bad cop: Good cop/bad cop is a tactic in which one party takes a friendly, cooperative approach while the other takes a more aggressive or confrontational approach. This tactic is often used in negotiations between a buyer and a sales team.
- Walk-away: Walk-away is a tactic in which one party threatens to end the negotiation or leave the deal if their demands are unmet. This tactic can be effective if the other party believes the deal is in jeopardy.
Here are some effective negotiation strategies that salespeople can use:
- Prepare in advance: Before entering a negotiation, it is important to research and gather as much information as possible about the other party, their needs, and their budget. This preparation can help you anticipate their objections and better position your product or service.
- Listen actively: Active listening is an important skill in negotiation. It involves paying close attention to the other party’s needs, concerns, and goals. By doing so, you can identify areas where you can offer solutions that benefit both parties.
- Focus on value: In negotiations, it’s important to focus on the value of your product or service rather than just the price. By highlighting the benefits and unique features of your offering, you can help the other party see the value in what you are selling.
- Make concessions: Negotiation is a give-and-take process, so be prepared to make concessions to reach a mutually beneficial agreement. However, it’s important to be strategic about your concessions and ensure that you are still getting a good deal.
- Stay calm and professional: Emotions can run high during negotiations, but it’s important to stay calm and professional throughout the process. This can help you maintain credibility and build trust with the other party.
- Have a backup plan: Negotiations don’t always go as planned, so it’s important to have a backup plan in case things don’t work out. This can help you avoid making concessions that are not in your best interest.
By using these strategies, salespeople can negotiate effectively and secure profitable contracts for their companies.
So, let’s get your sales engine back on track and chugging happily toward success!
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