How to negotiate in sales
What is the purpose of a negotiation? It's about creating agreement between differing parties. It doesn't matter if you're trying to get investment, win a customer over or lower your costs with a supplier. Each negotiation has similar beats you'll see again and again.
So to that end we've compiled a list of negotiation tactics that we've been using successfully as a B2B SaaS startup.
These negotiation tactics come from experience including our own failures where hard lessons were learned.
Fundamentally, it's about providing value, being able to communicate that effectively and knowing what you want.
When you walk into a negotiation you should always have a red line you're not willing to cross. If you're desperate for a sale it'll show and the power dynamics of the negotitation changes. A bad deal that hurts you in the long run is not one worth having. We know this from our own experience.
It's like digging a hole you're going to have to fill back up down the road.
There are times when you're negotiating in person or on the phone when it pays to be quiet. Let the other side reveal their hand and then you have the advantage of more information with which to respond.
Awkward silences are not bad, sometimes they're really useful. We used an awkward silence to turn a negotiation to our advantage and turned a bad deal that was losing us money into one of our most profitable ventures, one that helped pay for the development of RealtimeCRM.
Being able to build a good relationship with a prospect based on mutual respect and trust is critical to negotiating successfully. If they don't trust you then they're unlikely to buy from you.
One of the best ways to cut through any tension is to just come straight out with it and ask “Help me out here”, and in that way you can get the real conversation going. It's a disarming question and one that's informal and inviting. It cuts the bs out as people aren't expecting it.
They don't want to come off as rude so you'll be surprised how often it makes prospects loosen up.
You’ve been working on this deal from the beginning and you really want to win it. You’ve been dealing with the prospect and you know what they want. You know their objections but you think you can get past them. Because you really want the deal the temptation to sweeten the deal is always there. You’re emotionally invested in it because of all the time and effort you’ve put into it.
That’s why you need your team to review the deal. They need to interrogate it and that’s going to be uncomfortable.
Spend any time in sales and you'll quickly meet prospects who pile on the demands of what they want, if you just add this, that and the other they'll sign the dotted line. Often times though this doesn't stem the tide as they might still pile on more demands.
Why would they not? You've trained them that this OK to do. You're going to end up with a really bad deal for you. For them it'll might be awesome unless you've promised more than you can deliver.
Sometimes delaying a sales negotiation is better than charging ahead. Things change, and the negotiating environment may be better tomorrow than it is today for you.
So the question arises how do you know when to delay? We'll explain the concept of BATNA and how we used it to delay a sales negotiation where we went from a position of losing an existing to customer to keeping them, and they're still with us today on a much better deal for both parties.
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