In the Boiler Room, a great movie about the sales profession, Ben Affleck’s character gives a speech on closing deals in which he says:
“There is no such thing as a no sale call. A sale is made on every call you make. Either you sell the client some stock, or he sells you on a reason he can’t buy. Either way, a sale is made. The only question is, who’s gonna close: you or him?”
While this is an absolute truth, you probably have a much longer route to closing a sale than the average Wall Street trader.
Nevertheless, negotiations do boil down to who can find check mate the quickest. You’re standing your ground while your customer stands theirs. You’re locking horns over the most minute of contractual details and breaking a sweat trying to get this deal over the line.
Entering into the negotiation stage of your sales process can be daunting enough, let alone when you don’t really know how to approach them successfully.
The end goal of most sales negotiations is the same: to bring your prospect around to your way of thinking and get their signature on a dotted line.
But, as we all know, this is far easier said than done. Some negotiations can be bloodthirsty, drawn out battles, so here are 7 easy ways to negotiate your way to sales superstardom.
1. Do your homework
Before you enter into any kind of sales negotiation, as with anything, preparation is vital. Do your research into your customer, know how much they value what you’re offering and lay out what your alternatives are if they don’t agree to your initial offer.
If you know your customer inside out, their motives and challenges, you can play to your strengths and those of the product or service you’re trying to sell.
If you know they’re struggling like crazy with their sales performance and you know your software can really make their life easier, your negotiations will likely be less agonizing and a ‘yes’ should come easy.
2. Take it easy
Negotiations are, by nature, uncomfortable, so getting flustered is only going to make you even more uncomfortable.
As your negotiations heat up, it’s easy to dive headfirst into making incentives or offers without even being asked. Take it steady, there’s a time and place to start refining your deal; the second you walk through their door is not that time.
Any time you’re being asked questions you might not know the answer to, go and check with a colleague or your boss and get back to your prospect.
There’s no point in agreeing to something you’re not 100% certain of or agreeing some woolly terms and conditions, just to get a deal. Check and double check before you sign off.
3. Don’t discount
An absolute no-no. You may as well beg your customer to sign. Not only are you instantly dropping the value of your product, it’s a dated negotiation tactic. If you can offer your product at 20% cheaper, why aren’t you selling it at this price to begin with?
Going in with a discount can sometimes be a sure-fire way to cause your customer some concern or lose their custom altogether.
For example, my car breakdown policy came up for renewal a few weeks ago, I rang my provider and asked why it had tripled in price when I hadn’t claimed and they instantly dropped the price by 50% with very little effort on my part.
I simply asked why the price had gone up. Safe to say, I cancelled the policy and switched to their competitor, purely out of principle.
4. Add value
Now that discounting is off the table, you should be adding value where you can. Offer a complimentary training package, some freebies or a more favorable contract if you can.
Money isn’t everything and if your customer is truly interested in your product or service, they’ll be willing to pay for it and stick with you.
Good aftercare and customer service is often worth far more than any kind of discount is, make sure your customer is aware of that.
Think about the last time you received some really outstanding customer service. I can almost guarantee that you’ll go back, won’t you? So why aren’t you using this kind of tactic in your negotiations?
5. Stay cool
It’s easy to get swept up in the heat of the moment when negotiating, but staying cool will keep your eyes on the prize and your head in the game.
Don’t get confrontational or pushy with your customer. You can’t force them to agree to a sale, no matter how many incentives you offer.
Body language is king here. If you’re sat with your arms folded, a furrowed brow and you’re rolling your eyes at every comment your customer makes, you’re never going to get anywhere. We’ve got another blog post written on body language, which you can find here.
Be kind, accept their point of view, take the time to understand their concerns and don’t push or trick them into a sale. This will only lead to dissatisfied customers, poor feedback and bad reviews. Bad word of mouth can spread like wildfire and one badly closed deal can often be to the detriment of your next 10. And your customer will cut ties as soon as they can, too.
6. Stand your ground
Any smart buyer will go in asking for more than they really need or expect to get.
Don’t be lured into the trap of saying ‘yes’ if your customer drops the line: “I’m only willing to pay X amount for what you’re offering.” So they’re willing to spend money with you? This means they’re interested in what you’re selling and pretty close to closing, they probably expect to shake your hand in this meeting, they just need a little benefit-focused push to see the true value.
Be confident enough to counter-negotiate with a more viable offer that’s acceptable to you and your company. If they’re nit-picking or voicing their concerns, be ready to reassure them. Find out what their concerns are and quash them.
Get them to elaborate at every opportunity, this can often lead to them sharing more than they intended to and can play into your hands.
Stand your ground and share your passion in whatever it is you’re selling. Listen to your customers’ opinions and don’t assume you know everything. No two customers are the same and tarring them with the same brush will only work against you.
7. Test the waters
“Mr Prospect, if we can agree on XYZ, would that be enough to get your go ahead?” “If I can offer you this incentive, would you be able to push forwards with a 2-year contract?”
Using these kinds of questions will start your prospect thinking about what they’re willing to agree to. It will also give you some indication of where your terms need to be in order to close a deal.
These kind of questions make doing business together seem like a win/win for both of you. While your prospect is rewarded with an incentive, you’re getting a deal or an extended contract.
But don’t be afraid to say no to your prospect if the deal they’re trying to cut isn’t acceptable. Refuse the price reduction they’re asking for and their demand of 24 months for the price of 3. Be willing and able to protect your company’s values (and bottom line).
Authors of ‘Getting to Yes’ Fisher and Ury put it very well: “The more easily you can walk away from a negotiation, the greater your capacity to affect its outcome.” Get comfortable with being able to say ‘no’ and walk away with your head held high.