Inevitably, when I hear that a salesperson has trouble negotiating or closing there are two main causes, neither of which is negotiating or closing (these problems are relatively easy to solve compared to their root causes).
Let’s look at both of the root causes.
If a salesperson believes in their hearts that their price is too high, they can’t negotiate and capture value. The reason they struggle is because they don’t truly believe that they’re creating more value than their competitors.
These salespeople believe they’re not different enough to command a higher price. I find that this is rarely true. Most of the time the companies that struggle to capture value create it but have trouble conveying the value of that differentiation.
Unless you believe that you are worth paying more you will always struggle to negotiate. You’ll also struggle to ask for the business. You’ll pull your punches. If you don’t believe, your dream client won’t believe either.
No Value To Capture, Nothing to Close
The second reason salespeople struggle to negotiate or close is because they didn’t create any value in the first place.
Most of the time, the salesperson got to the opportunity late, after the buyer was deep in their process. They were not there to develop the buyer’s needs. They didn’t develop consensus around their solution. They didn’t work with stakeholders to understand their individual needs and modify their proposal to make it easy for these buyers and other stakeholders to say “yes.” Where no value has been created, none can be claimed. Without creating value, it’s very difficult to get a “yes.”
How does this happen? The salesperson is brought in late, oftentimes to respond to a request for proposal. Sometimes the buyer initiates the process and invites a number of vendors, already having some vendor in mind to be their future partner. In these cases, the partner they have in mind helped them write the A column. The salesperson is having trouble negotiating and closing because they started from a poor position from which to do so.
In order to capture value you have to create some. The earlier you enter into the sales process (or your buyer’s buying process) the greater the likelihood that you can create value and differentiate your offering in a way that makes you worth paying more to obtain.
Get Rich Quick, Lose Weight Fast, and Other Lies
When I hear these complaints about negotiating and closing, it sounds to me like a man attending a wedding and deciding that he doesn’t fit in his tuxedo. He want to lose 30 pounds in the next 48 hours. The time to begin losing those 30 pounds was six months earlier. And the time for you to create value was six months earlier, too.
There isn’t any way to cram success, and it’s impossibly difficult to win opportunities from behind. You win from in front because you create value from in front. That’s how you really improve negotiating and closing.
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Filed under: Sales