7 Steps to Master the Art of Negotiating in Sales

Negotiating in sales is a skill that can make or break your success as a salesperson. Whether you are selling a product, a service, or a solution, you need to be able to persuade your prospects to buy from you and not your competitors. But how do you negotiate effectively without compromising your relationship with your customers or your profit margin? In this article, we will show you how to negotiate in sales using seven proven steps that will help you close more deals and increase your revenue.

Key Takeaways

Negotiating in sales is a skill that can make or break your success as a salesperson.

Negotiating in sales involves seven steps: do your homework, set your objectives, build rapport and trust, present your offer, ask for the sale, negotiate the terms, and confirm the agreement.

Negotiating in sales requires key skills such as research, planning, communication, persuasion, closing, and follow-up.

Negotiating in sales can help you win more customers, increase your revenue, and build long-term relationships.

Step 1: Do Your Homework

Before you enter any negotiation, you need to do your homework and research your prospect, their needs, their pain points, their budget, their decision-making process, and their alternatives. This will help you understand their situation, their goals, and their challenges, and tailor your offer accordingly. You also need to research your own product or service, its features, benefits, value proposition, and competitive advantages. This will help you highlight how your solution can solve your prospect’s problems and deliver value to them.

Step 2: Set Your Objectives

Before you start negotiating, you need to set your objectives and know what you want to achieve from the negotiation. You should have a clear idea of what is your best-case scenario, what is your worst-case scenario, and what is your walk-away point. You should also have a clear idea of what are the variables that you can negotiate on, such as price, terms, discounts, delivery, warranty, etc. You should prioritize these variables according to their importance to you and to your prospect and be prepared to trade them off if necessary.

Step 3: Build Rapport and Trust

Negotiating in sales is not only about numbers and facts, but also about emotions and relationships. You need to build rapport and trust with your prospect before you start discussing the details of the deal. You can do this by using effective communication skills, such as listening actively, asking open-ended questions, showing empathy, using positive body language, and mirroring your prospect’s style and preferences. You should also demonstrate your credibility and expertise by sharing testimonials, case studies, reviews, or referrals from satisfied customers.

Step 4: Present Your Offer

Once you have built rapport and trust with your prospect, you can present your offer in a confident and persuasive way. You should focus on the value and benefits of your solution rather than the features or the price. You should also use storytelling techniques to paint a vivid picture of how your solution can help your prospect achieve their desired outcome. You should also anticipate and address any objections or concerns that your prospect may have, and provide evidence or guarantees to overcome them.

Step 5: Ask for the Sale

After you have presented your offer and handled any objections, you need to ask for the sale and close the deal. You should not be afraid or hesitant to ask for the sale, as this shows confidence and professionalism. You can use different closing techniques, such as the assumptive close, the alternative close, the urgency close, or the trial close. You should also look for buying signals from your prospect, such as asking about the next steps, agreeing with your points, or nodding their head.

Step 6: Negotiate the Terms

If your prospect agrees to buy from you but wants to negotiate the terms of the deal, you need to be ready to negotiate effectively and fairly. You should not accept their first offer or give away too much too soon. You should also not focus on price alone but consider other variables that can add value to both parties. You should use the principle of reciprocity and offer concessions only if you get something in return. You should also use the principle of anchoring and start with a high but realistic offer that gives you room to negotiate.

Step 7: Confirm the Agreement

Once you have reached an agreement with your prospect on the terms of the deal, you need to confirm it in writing and get their signature. You should also thank them for their business and express your appreciation for their trust. You should also follow up with them after the sale and make sure they are satisfied with their purchase. You should also ask them for feedback, referrals, or testimonials that can help you improve your sales performance and generate more leads.

Tips

Do your homework and research your prospect and your product or service before the negotiation.

Set your objectives and know what you want to achieve from the negotiation.

Build rapport and trust with your prospect before discussing the details of the deal.

Present your offer in a confident and persuasive way, focusing on the value and benefits of your solution.

Ask for the sale and close the deal using effective closing techniques.

Negotiate the terms of the deal fairly and effectively, using reciprocity and anchoring principles.

Confirm the agreement in writing and follow up with your customer after the sale.

How to Negotiate in Sales: A Statistical Report

Negotiation is a vital skill for salespeople, as it can help them close more deals, increase profits, and build trust with customers. However, negotiation is not easy, as it requires a balance between meeting the customer’s needs and protecting the seller’s interests. In this report, we will look at some statistics and strategies that can help salespeople negotiate more effectively.

The Importance of Negotiation in Sales

According to a survey by HubSpot, 38% of salespeople say that getting a response from prospects is the most difficult part of the sales process. This means that salespeople need to be persuasive and proactive in engaging with potential customers and convincing them of the value of their products or services.

However, persuasion alone is not enough to close a deal. Salespeople also need to be able to negotiate with prospects, especially when they face objections, requests for discounts, or competition from other sellers. Negotiation is the process of finding a mutually beneficial outcome for both parties, where each side makes concessions and compromises to reach an agreement.

Negotiation is important in sales for several reasons:

It can increase profits: Negotiation can help salespeople avoid giving away too much margin or losing a sale altogether by offering alternatives, incentives, or value-added services that can justify their price or differentiate their offer from competitors.

It can improve customer satisfaction: Negotiation can help salespeople understand the customer’s situation, needs, and goals, and tailor their solution accordingly. By showing empathy, respect, and flexibility, salespeople can build rapport and trust with customers and make them feel valued and satisfied.

It can show product value: Negotiation can help salespeople demonstrate the features, benefits, and quality of their products or services, and how they can solve the customer’s problems or improve their situation. By using numbers, testimonials, or case studies, salespeople can provide evidence and credibility for their claims.

The Strategies for Negotiating in Sales

Negotiation is not a one-size-fits-all approach. Different situations may require different tactics and techniques. However, there are some general principles and best practices that can help salespeople negotiate more effectively. Here are some of them:

Negotiate with influencers and decision-makers: Salespeople should identify who has the authority and influence to approve or reject their offer, and focus their efforts on convincing them. They should also try to understand their motivations, preferences, and pain points, and address them accordingly.

Probe the prospect by letting them speak first: Salespeople should ask open-ended questions to elicit the prospect’s needs, expectations, objections, and concerns. They should also listen actively and attentively to what the prospect says, and use paraphrasing or summarizing to confirm their understanding.

Quote a single figure discount, if needed: Salespeople should avoid giving ranges or percentages when offering discounts, as they may invite further negotiation or devalue their offer. Instead, they should quote a single figure that is within their acceptable range, and explain why it is fair and reasonable.

Explain product value through numbers: Salespeople should use quantifiable data to show how their product or service can help the prospect achieve their goals or solve their problems. They should also compare their offer with the alternatives or competitors, and highlight how they provide more value or benefits .

Take note of non-verbal cues: Salespeople should pay attention to the prospect’s body language, tone of voice, facial expressions, and eye contact, as they may reveal their emotions, attitudes, and intentions. They should also use positive non-verbal cues to convey confidence, interest, and sincerity.

Use prospect’s timeline as a negotiating tool: Salespeople should find out when the prospect needs or wants to make a decision or implement a solution, and use it as leverage to create urgency or incentive. They should also set deadlines or expiration dates for their offers to encourage action.

State requests in return for discounts: Salespeople should not give discounts without getting something in return from the prospect. They should ask for commitments, referrals, testimonials, or other forms of value that can help them close the deal or generate more business.

Negotiation is a crucial skill for salespeople that can help them close more deals, increase profits, and build trust with customers. However, negotiation is not easy, as it requires a balance between meeting the customer’s needs and protecting the seller’s interests. To negotiate more effectively, salespeople should follow some strategies, such as negotiating with influencers and decision-makers, probing the prospect by letting them speak first, quoting a single figure discount, explaining product value through numbers, taking note of non-verbal cues, using prospect’s timeline as a negotiating tool, and stating requests in return for discounts. By applying these principles and best practices, salespeople can improve their negotiation skills and outcomes.

Frequently Asked Questions

Q: What is negotiating in sales?
A: Negotiating in sales is the process of reaching an agreement with a prospect on the terms and conditions of a sale.

Q: Why is negotiating in sales important?
A: Negotiating in sales is important because it can help you win more customers, increase your revenue, and build long-term relationships.

Q: What are the key skills for negotiating in sales?
A: The key skills for negotiating in sales are research, planning, communication, persuasion, closing, and follow-up.

Q: How do you negotiate price in sales?
A: To negotiate price in sales, you need to focus on the value and benefits of your solution, use anchoring and reciprocity techniques, and trade off other variables if necessary.

Q: How do you handle objections in sales?
A: To handle objections in sales, you need to listen to your prospect’s concerns, empathize with them, provide evidence or guarantees to overcome them, and ask for the sale.

References:

http://psych.cf.ac.uk/home2/manstead/Van%20Kleef%20et%20al.%20%282006b%29.pdf

http://www.psych.nyu.edu/gollwitzer/771.pdf

https://deepblue.lib.umich.edu/bitstream/2027.42/26263/1/0000344.pdf

https://www.forbes.com/sites/ianaltman/2018/01/02/10-essential-negotiation-skills-for-salespeople/

https://blog.hubspot.com/sales/sales-negotiation-skills

https://www.saleshacker.com/negotiation-skills-salespeople/