Let's talk about negotiation... a hot topic but an area that i must say, a skill many people don't truly understand. This is an important skill to master given that many business transactions revolve around the outcome being mutually beneficial for multiple parties.
Here are my top 5 tips on how to sharpen up your negotiation skills:
1. DON'T NEGOTIATE TOO EARLY
Price has started to come up relatively early in the sales process. It's not uncommon for your prospect to ask about costs, contract lengths, and possible discounts on the first or second call. While you shouldn't evade their questions (which will make it harder to earn their trust), be careful not to get pulled into a negotiation until you're ready.
Give the buyer an idea of what the price will be to make sure it's in their budget. If they try to go back and forth with you, use one of these responses:
"I'm happy to discuss our options with you, but I think it would be more helpful to have that conversation after I have more insight into your needs and have shown you how our product/service might be able to help."
*Optional Exercise – List 3 responses to avoid negotiating too early.
Walking into a negotiation unprepared is a surefire way to walk out with a bad agreement. It’s hard to think clearly when you're in the hot seat, so without a defined strategy you might end up agreeing to unfavourable terms or even losing the deal.
First, know your goals. What do you need vs. just want? Where are you willing to compromise? At what point must you walk away?
Next, go through the same exercise from the prospect’s perspective. If you can anticipate their objectives, where they'll be flexible, and where they won’t budge, it’ll be easier to suggest an agreement they’ll go for.
You should also develop strategies for overcoming their objections. Let’s say you’re pretty certain the buyer will ask for a monthly contract. If quarterly payment terms are preferable and you can come up with several reasons this is in your prospect's favour, convincing them so during the actual negotiation will be less challenging.
3. NO NEED TO GET DOWN TO BUSINESS IMMEDIATELY
Negotiations make most people pretty tense, so they immediately want to get down to brass tacks. However, taking the time to build rapport first is crucial.
Research shows that negotiators who chat with their counterparts are more likely to compromise and share key information and less likely to make ultimatums or come to an impasse. In other words, small talk can have a big impact.
4. DO NOT DOMINATE THE CONVERSATION
In negotiations, you actually gain power by saying less. Talking too much is an unmistakable sign of nervousness -- and if the buyer can tell you’re anxious, they’ll be more aggressive than if you seem calm and in control.
Plus, reps who ramble may end up making unnecessary concessions or slash a price. It’s much harder to accidentally volunteer concessions or slash a price when you’re listening more than talking.
5. EXPECT THE BUYER TO TAKE THE NEXT STEPS
Once you’ve come to an agreement, have a system in place so the contract is signed and paid for as soon as possible. After all, right now the deal has the most momentum -- the longer you wait to get the details squared away, the more likely it is the buyer will change their mind about the exact terms.
Some companies will need to have their finance or marketing teams look the proposal over. You should already know whether this is the case, thanks to the questions you asked during discovery. Come to a negotiation prepared with all the materials you need to kickstart their review process.