Having polished negotiating skills will enable a sales person to sell more, at a higher price, give away less, and make more money. Becoming a master of negotiating will allow you to not only control the situation but gain the advantage of the outcome. You may be a great sales person but without a solid understanding of negotiating tactics you may be underselling your product or service.
When was the last time you sold something but you had to take a discount? Have you ever sold something and your paid commissions weren't worth the time you spent closing the sale? What about, have you ever dealt with such a hard bargain prospect that you needed your manager's special approval to get the deal signed?
Those days are over if you practice these negotiating tips. Remember, just like sales, negotiating is something that must be studied, learned, and practiced in order to gain a mastery of the skill. It will not happen over night. There is no set formula to follow. A negotiation is a discussion between two people or groups of people which will result in an agreement between the two parties. Practice, practice, practice. You will only get better at negotiating if you practice.
- Be prepared. The person with the most information will have the advantage and since you are the sales person you should be an expert in your product or service. There should nothing a prospect can say about your product, service, or competitor that you cannot rebut, in a nice way of course. If you get hit with a question or objection that you cannot overcome on the spot you have already started to give up ground.
- Listen more, talk less. This principle is practiced in the overall sales process and is one of the golden rules of sales. A sales person who talks to much will sell less than the sales person who talks less but listens more. The 80/20 rule, listen 80% and speak 20%. Learning to actively listen will allow you to uncover the prospects true needs and wants and ask the right questions to discover their pain points. This helps you link benefits and value to your pitch.
- Start high. In negotiations you usually do not want to be the first to offer, but as the sales person you will not be able to avoid this so start high. This seems so obvious but many in sales get scared to frighten the prospect with a high starting point. Don't be. Your price will be linked directly to the value and benefits of the prospect as well as the pain they are experiencing from not having your product or service. You must realize that the prospect is going to do the same and start low or will ask for more than what they expect to get.
- Focus on value, not price. Focus on the value your product or service will bring to the prospect. This will help deflect and minimize the discussion on price. Remind the prospect of the pain they are experiencing by not having your product or service and the benefits you will bring as a partner.
- Know your bottom line. There is no reason why you shouldn't know your bottom line before getting into the negotiation phase of your deal. Getting a deal by going below your bottom line is not acceptable because as a sales person we make money from our commissions and going below our bottom line usually means it is not a profitable deal.
- Don't react to the prospect flinch. The flinch is a negotiations tactics that will be employed by the buyer where they will flinch or react negatively to price or something within your negotiations. Buyers do this to try and beat you down on price or scare you that they won't do the deal and that is exactly what they are trying to do. Scare you. Don't be afraid, you are the subject matter expert of your product or service. Remember point #1, be prepared. Respond in a calm and professional manner that explains why your price is such. Remind them of the value and benefits your product or service will bring to the prospect and how you will eliminate their pains.
- Ask for help. This will often soften up the prospect and their view of you as someone who is trying to help solve one of their problems. By asking for help the prospect will see you as part of their team and not as someone trying to sell them.
- Don't make your prospect look bad or uneducated. Sounds very harsh but so many sales people are A+ personalities that when we are faced with objections we can turn overly aggressive. A good sales person and negotiator walks a fine line with being able to control the conversation as well as allow the buyer to FEEL like they are in control. Don't ever respond with, "Nope, that's not right" or "No you're wrong."
- Know when to walk away. Maybe as important as any of these tips. Determine a point before hand that you will walk from the deal. This point is often linked to a price or commission payment. Just like in a game of poker, know when to hold them and know when to fold them.
This past year I have been living in Lima Peru where just about everything is negotiable. I have applied these tips and have been able to negotiate more effectively from taxi fairs to consultant fees.
Start practicing today and you will be sure to gain more control and effectively control the outcome of your next negotiation.