Updated: Feb 11, 2021
Sales professionals are rarely involved in deals that comprise a single item with a single price and delivery date and because most selling is concerned with much more complex situations, negotiation if often required.
Negotiation is not confrontation and successfully negotiated deals leave all parties concerned feeling that they reached a mutually agreeable conclusion. This is of particular importance to the sales professional as it forms the ideal relationships that will take your prospect one step nearer to the everlasting client you should aim create.
We will examine some of the key components of sound negotiation techniques as well as demonstrating the traps awaiting the unwary. It prepares you to reach excellent deals that also contain the essential ingredient of mutual satisfaction.
As a basic principle it is a much harder process to get to the point of matching your offerings to the prospect’s needs and agreeing the value, than it is to define the terms under which the deal will be done.
A deal can always be made when each of the parties see their own interests are being met. Whatever it is can be sold once you get the people on the other side of the table to see how the deal works to their advantage.
Because a sale very rarely depends upon a single item with a single price and a single delivery date, much of selling involves negotiation.
Effective negotiation requires that you keep an absolute clarity of overall purpose and stay mentally focused on the objectives you have set. Keeping clarity makes the job much easier.
The first objective is to decide the type of relationship you want with the prospect and just as important is the type of relationship the prospect is looking to build with you.
Sales professionals should always be looking for everlasting clients to build repeat business or new opportunities. There are, however, some situations when the sales professional will make a one-off sale. In those circumstances, you will probably want to drive a particularly hard bargain as there is no future at risk.
In the one-off situations, you can afford to adopt a take it or leave it attitude and stick with it.
When, as is usual in professional selling, you have an objective to build a long-term relationship based on maximum trust and mutual confidence you need to negotiate. For both parties in a relationship to feel trust and mutual confidence, you have to satisfy needs.
But, crucially, be careful not to concede to every whim of the prospect.
In negotiation you must keep the whole deal in mind so try to see the big picture. By the time it comes to the table, you should have your prospective buyer's complete shopping list and all their requirements clearly identified.
These requirements are covered by the What, When, Where, How Exclusive, and How Much? issues that you should have uncovered previously and agreed at the proposal stage.
The details of these items are what you agree during your negotiation.
THE WHAT is precisely what is your offering.
THE WHEN is the delivery or start date of the project of implementing your offering.
THE WHERE is where the job is to be done whether delivery or service.
THE HOW EXCLUSIVE covers how much your ability to sell your offering elsewhere will be impacted by the deal you are about to negotiate. This may cover product exclusivity, industry-wide exclusivity, territorial exclusivity, anything that means your hand will be constrained by this sale.
THE HOW MUCH will, of course, includes money, but is not money alone. It can include time and other support services. Intangibles that still have value and can be powerful negotiation items.
Because, through the sales process so far, you will have uncovered the prospect’s needs and values, you should have a clear idea of how relatively important all the items are.
Through that process you will find on many occasions that the other party's idea of values is higher than the ones that you had in mind.
That's why you have been asking questions throughout, such as:
'If you were to do this and we were to do that, how much could that be worth?'
Or 'Suppose we were to add this and add that, what would be the value to you?'
Nothing comes with a fixed price attached and, in principle, everything is negotiable.
But just because it is negotiable, it doesn’t mean that it absolutely must be negotiated.
The point of any negotiation is to arrive at the situation where the parties acknowledge that they both benefit. At that time, a sales professional will stop. Any further deal making is unnecessary.
Specific agreement isn't needed on every point to reach a deal. Where it is appropriate some items can be resolved in the future.