Negotiations – they’re a part of life. As salespeople, we need to be great negotiators to be successful. So how do we approach the process? Two things are extremely important when it comes to negotiating – the outcome and the relationship.
When it comes to outcomes, there are five possibilities:
- I win – you lose. Compete. This is not beneficial for a long-term relationship.
- I lose – you win. Accommodate. You are not operating from a position of strength.
- I lose – you lose. Avoid. This is the weakest outcome.
- I win/lose some – you win/lose some. Compromise. Picking your battles is good, but still not ideal.
- I win – you win. Collaborate. This is the most desirable outcome!
So how do you position yourself to get to the fifth outcome? Negotiations start from the very moment you begin talking to a prospect or customer. Trust must be built. Without trust, there is little chance that your sales relationship will work.
There are basically four levels of sales relationships. The lower-level sales relationship categories are “Seller” and “Vendor.” With these relationships it’s difficult to negotiate effectively because everything is based on price. Price is the lowest form of negotiation and at least one party will lose.
If someone does try to push you to a lower price, don’t just automatically discount. Pause and ask them two questions. First question: “May I ask, what price did you expect?” Wait for the answer. Second question: “How did you come up with that number?” You want to hear the story. They might not be comparing apples to apples when comparing your pricing to the competition’s pricing. If they won’t budge and you decide to discount in order to get the deal, make sure you always take something away from the original offer to show the value of your offer.
The higher-level sales relationship categories are “Supplier” and “Partner/Trusted Advisor.” With these relationships you have the ability to negotiate more successfully because you have built a level of trust. Price alone is rarely the debate. They want to do business with you. There is a collaboration of ideas and strategies to make sure the final outcome benefits all parties.
Here are some tips for negotiating at the Supplier or Partner level:
- Focus. Ask great questions and be an impressive listener.
- Be prepared with more than one good option.
- Be empathetic. Show your feelings, if appropriate.
- Keep things simple. Sometimes presenting too many arguments can backfire.
- Don’t let your competitive nature cloud your thinking. Be open to walking away if an agreement is not in the cards this time.
When it comes to closing a deal, practice makes perfect. Good selling and good luck with all of your negotiations, big and small!