Making it through a complicated sale can be tough and typically requires a big investment of time and effort. There’s no way that every deal you work on will lead to a sale. In some industries, the closing rate for even the best sales executives is very small. Therefore, when you have a qualified customer with a real need, you not only need to close the deal, but also have to get the very best price and terms you can. However, despite the expenditure of so much energy, many sales reps fail at negotiating the best deal possible and will leave money on the table just to get their deal done.
There’s no valid reason why you shouldn’t try your hardest to get the most out of each sale you work on. By following these important strategies, you will ensure you have a profitable negotiation.
- Develop A Strong Value Proposition. Make sure the value you are providing and how your product addresses your customer’s problem is clearly spelled out. If you don’t, you will make it easy for your buyer to say your price is “too high”. You will then be forced to justify your product and price all over again.
- Don’t Reveal Your Deadline Or Desperation. Sales people are always under pressure to perform. However, the person under the greatest time pressure generally loses in negotiations. There’s no need to convey how important the deal may be to you personally or to your company. If you do, your customer will control the negotiation and you will wind up giving up a lot more concessions than you need to.
- Don’t Leave Details Until Later. Work through all of the substantial components of your deal with your customer to establish a baseline of your agreement. Document and share the business terms you agree to after each discussion. This will ensure there’s no misunderstanding and eliminate surprises later on. When ready, you’ll be able to use those pre-established terms as the basis for your contract.
- Never Make Unilateral Concessions. When you give something, make sure to get something in return. Make a big deal of any concessions you make regardless of how small they are. Before conceding to anything, find out all of your customer’s demands and how each compromise will move your deal closer to closure.
- Only Negotiate With People Empowered. It’s crucial to negotiate with people that have the authority to get your deal done. If you don’t, you may have to provide additional concessions to the real power players that will appear on the scene after you thought you were already done.
- Provide More Value Instead Of Lowering Your Price. You should always try to find something else to give up that doesn’t reduce your price. For example, you may be able to provide free training, premium support, future volume discounts or special payment terms. All of these items will provide additional value to your customer, help you maintain your asking price and cost you little or nothing. The key is to be prepared with a list of items you can give before you are in the middle of a negotiation.
- Be Prepared To Walk. Before you start negotiating, write down your wish list and the bottom line number and conditions at which you will walk away. If you never say “no”, or fail to confirm you’ve provided your best and final offer, your customer will continue to ask for more and you will prolong the negotiation. Remember that both sides are under pressure to get a deal done and you should not cave in out of fear. The best negotiators will continue to ask for concessions right up to the time the contract is signed. In fact, 80% of concessions are made in the last 20% of time.
- Negotiate In Person. Whenever possible, you should meet your customer face to face to negotiate your deal. This will enable you to read their body language, get a clear reaction to your proposed terms and simply get more accomplished in a shorter time-frame.
- Reduce Your Price As A Last Resort. If you must lower your price, be sure you get a firm verbal agreement that it’s the last concession needed to close the deal. Nothing is worse than reducing your price only to find out afterwards that there are other concessions your customer wants. To be sure, you can pose a question like “I’m not sure if I can get this price approved for you, but if I can, will you sign our contract by the end of the week?”
Learning the art of negotiation is crucial to maximize your profit in each sale. Utilizing the essential steps above will ensure you’re on the right path to success.
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