During a recent conversation with a friend who was new to sales, he made the following statement – “I met the client, explained the particulars and quoted a price. Everything was going fine and during the meeting, I felt I had the upper hand. But right when I walked out and was sure I had landed the deal, I received an email from the client that they wished to reconsider things before proceeding. They didn’t show any signs of hesitation in person and didn’t even ‘negotiate’ the deal. I was willing to accommodate most of their requests and they said they will get back to me after speaking to the Director. Then why did I receive such an email? What did I miss?”
This got me thinking and I wondered what my friend could have done better or differently.
I spoke to some friends and did my research by speaking to a few sales professionals. They gave me some pointers on the basics of sales negotiation. Here’s what I learnt from them.
Why is negotiation skills crucial for sales?
Sales negotiation skills are vital because you need to arrive at an outcome that everyone is happy with. There is a fine balance between gaining a financially viable deal and accommodating the specifications of your prospect. It helps buyers and sellers to arrive at an agreeable deal without resulting in conflict and unfavourable prices.
Today, buyers are more well-informed and often compare budget specifications before closing deals. As a sales professional, you don’t want to quote something higher than the average market price – at the same time, you must not quote a price that can’t sustain your business. With good skills and a strategic approach, you can build and nurture strong relationships with your customers. Your prospect will feel heard and valued if they can communicate and negotiate constructively.
The 5 C’s that will benefit you during sales negotiations
The solution I suggested to my friend was the 5 C’s – Composure, Control, Communication, Consultation, and Compassion. The idea is to project your brand as an invaluable resource and connect your services or products to the buyer’s pain points.
Project yourself as a trustworthy friend who can offer assistance and expertise. This way, customers don’t feel like they are speaking to an agency that is trying to sell them something. They will open up about their requirements and shortcomings which you can tap into to make a deal. Always remember to stay in control during the discussion. Let’s break down the 5C’s and how they can help every salesperson negotiate better.
COMPOSURE – Use patience and share information to build trust
The key to good negotiation is composure and patience. Listen to your customer and come up with customised solutions to suit them. Stay calm, as negotiations can go back and forth over a period of time. Try to stay composed when your proposals are rejected, or you are unable to commit to the requirements of your customer. One core benefit of discussing ideas and crossing out improbable proposals is that you end up with something both of you agree on without any ambiguity.
Also, do not hold your cards too close to your chest. The social norm of reciprocity dictates that if we want information, we have to offer information. Sharing pertinent and necessary information will build trust and develop a healthy business-client relationship, which will help achieve your goals.
CONTROL – Never enter a negotiation without preparation
To have complete control of the negotiation without looking too dominating, you need to be prepared for the customer meeting. Every meeting is three parts preparation and one part execution. Have a solid grasp of certain key elements of the deal – if you have sales battle cards, try to stay updated on your company’s differentiation and where your competitors are placed. Use powerful words to describe your services. If a competitor has recently launched a product that you already have, project yourself as a frontrunner in the product which has increasing scope in the market.
Study your prospect and understand their business, buying power, market share, pain points, and how you can provide solutions to their problems. As a sales professional, you should also know the clear limits and possible concessions on price discounts, possible freebies, and offerings to attract your prospect.
An important part of maintaining control in a negotiation is to speak to the person who has the authority to make decisions. Do not spend time with multiple people along the chain of command and commit to discussions at the wrong level. This could result in quoting a lesser price at one meeting and having to work your way lower still during subsequent meetings.
COMMUNICATION – Speak clearly and practice active listening
You will always have the upper hand if you choose to listen first. Ask more open ended questions and practice active listening. However, when the customer begins the conversation, avoid jumping in with a discount to accommodate their needs. Instead, take advantage of the Anchoring Bias and make the first offer. That way you are likely to close the deal closer to your first offer. Avoid sounding too eager but at the same time, you want to show the customer that you care about their side of the deal.
Do not use negative language or sound hesitant when you speak. Using filler words like ‘umm’ and ‘you know’ can be distracting and reduces your power and credibility. Speak clearly and keep your statement brief. Pause to check for understanding and make sure you maintain your sense of authority during the conversation.
Never try to make your brand sound better by belittling competitors. Clarity is key. Try to steer clear of providing a range of options while negotiating. Never say, “I could give you a concession of 10% to 20%.” This is a wrong move, as of course your customer would choose the higher value – go for specific figures and avoid vagueness.
CONSULTATION – Look for mutually successful outcomes
A consultative negotiation approach is about focusing on outcomes that benefit everyone. There are multiple styles of sales negotiations, but research has proved that the consultative approach results in a win/win for both parties on most occasions. It works by using the trust already built with the customer and reinforces the value throughout the different stages of negotiation. This negotiation skill also reinforces the relationship.
In consultative negotiation, sales professionals act more like advisors than salespeople. They listen to the customer and watch for the subtle signs that they are giving. They then offer personalised solutions that appeal to the customer’s needs by connecting them to the pain points. This lays the foundation for a productive relationship and offers better recall value if the client requests some more time before making a decision.
COMPASSION – Show the customer you care about their needs
While the main detail you might be negotiating is price, value should be at the front and centre of the discussion. Stay calm and positive throughout the conversation. Try to project yourself as a helpful and compassionate person who cares about more than just the finance part of the deal.
Create value and shape the buyer’s perception and satisfaction of your product or service before moving further. Keep the negotiation natural and situational. Do not disagree with every point. You are aiming for a long lasting partnership, not a temporary sale. If your prospect seems dissatisfied with the offer or does not value your business, then walk away from the deal on good terms.
If you are wondering what happened with my friend- he benefited from these inputs. He realised that he should have been speaking to the Director (decision-maker). He also admitted to not listening closely and being impatient. He chose to avoid getting flustered during his next sales negotiation. He also decided to make his prospect feel valued. He took the time and effort to practice active listening and understand the customer’s issues and to effectively communicate value. Above all, he learnt to remain composed and compassionate so he can thrive in any negotiation and strike lasting relationships with his clients!