Achieving success in the field of sales depends in great part on your ability to successfully negotiate with vendors and customers. Skilled sales professionals rarely approach the negotiating table blindly. They arrive prepared to overcome their counterpart’s objections and know which incentives to offer to entice a prospect to proceed with a purchase. Below are five tips for successful sales negotiations.
1) Outline your negotiating goals and your limitations in advance
Prior to your meeting with your counterpart, it is wise to determine exactly how much you are willing to compromise during the negotiation process. For many salespeople, this means identifying the absolute lowest price you are willing to accept from a buyer and then vowing not to entertain offers that are any lower. This will help ensure that you stay on track with your sales goals.
2) Do your homework on your counterpart before you negotiate
Entering into negotiations without knowing anything about your counterpart is like visiting a restaurant buffet with a blindfold on and hoping that you serve yourself the food you would like. Here are some suggestions to help you learn about your counterpart and lay the foundation for successful negotiations:
- Know what makes your counterpart tick. For example, does he or she voice a preference for eco-friendly products on social media?
- Uncover your counterpart’s pain points. For instance, is the prospect facing an upcoming inspection for which the product is required?
- Conduct a little background research. Knowing your counterpart’s favourite university or sports team can be a useful conversation starter.
3) Anticipate your counterpart’s objections and remove them right away
“Objections are the hurdles that keep sales people a step away from closing. The swift removal of objections invariably leads to the closing of the sale. Only the well prepared sales person succeeds in removing the objections in a convincing manner.”
– Doug Dvorak, The Sales Coaching Institute
Anticipating your counterpart’s potential objections before you begin negotiating will help increase your odds of closing the sale. For instance, if you are accustomed to new clients referencing the lower price of a competitor’s model, you can exhibit transparency by pointing out that discrepancy right away and then highlighting the reasons why your product and service are superior.
4) Remember that you are setting a precedent
Unless you are certain negotiations with your counterpart will only occur once, you should consider your future relationship with your counterpart when negotiating. Remember that you are setting a precedent and your customer could very well demand the same price – or lower – next time you meet. Accordingly, make sure that you do not offer a price that will be impossible to approximate when your customer needs to reorder.
5) Do not be afraid to walk away
“In business, knowing when to walk away is key – whether it means deciding against an acquisition that on paper would create significant synergies, saying no to a deal when the price is becoming unreasonable, leaving a toxic workplace, or simply leaving for a better atmosphere altogether.”
– Herta von Stiegel, Founder and Executive Chair of Ariya Capital Group Limited
Sometimes even the most seasoned negotiators are not successful in their persuasive efforts. You may also encounter a situation in which your counterpart is simply unwilling to budge, or tries to insist on a price that is lower than the bottom threshold that you set. In these cases, you need to be able to recognize that some deals do not produce sufficient revenue to justify the expenditure of resources and have the confidence to walk away from the negotiating table.
The Bottom Line
Successful sales negotiations do not unfold by accident. They are the result of strategic planning and a strict focus on negotiating goals. We invite you to contact us to learn more negotiating strategies. We look forward to helping you achieve your sales goals with skill and confidence!