Ne·go·ti·a·tion: A discussion aimed at reaching an agreement. Though this dictionary definition is technically correct, any sales professional will know that it’s missing an awful lot of nuance.
Negotiation can be one of the most challenging parts of the sales process to master. However, with the right sales negotiation training, you’ll be able to demonstrate value to your prospects and close deals left and right.
Let’s go over the six vital steps you must follow to negotiate like a pro. We’ll also discuss where negotiation fits in the overall sales process and why it’s such a vital skill to master.
What is Sales Negotiation Training?
Before we get into the nitty-gritty details of how to master negotiation, let’s discuss negotiation in broader terms. What is negotiation in sales, and why is it such a vital skill to master? Negotiation occurs when two or more parties try to reach an agreement.
As a sales rep, your prospects and clients will ask for concessions or discounts. It’s then your job to steer the discussion in a way that helps you close the sale without caving to every demand.
RELATED: How To Stop Negotiating With Yourself
You may be tempted engage in multiple rounds of negotiations to edge your client in the right direction. However, you should only negotiate once—after the client has chosen you. Suppose you waste time and energy negotiating before the prospect’s decision has been made. In that case, you may give up ground you don’t need to or open the door to further negotiations.
In short, negotiation is a crucial part of the closing process that every sales rep should master. Let’s dive into my six-step process for running successful negotiations and blowing your targets out of the water.
1. Review Your Research
The first step in engaging in a successful negotiation starts long before you reach the closing table. Negotiation should only take place at the end of the sales process. By that time, you've already had several conversations with your clients, and you'd better have taken good notes because your first step to mastering negotiation is to review everything you've learned so far.
Some of the information you should ensure you understand before entering negotiations includes:
- Key stakeholders
- The current problem or pain point the client is facing
- Your possible solutions and how they’ll bring value to the client
- Your prospect’s budget
The goal of any negotiation is to arrive at a mutual understanding and agreement. To achieve this, you must understand the situation as a whole to help both you and the client arrive at the solution that works best for them and their business—and helps you close the deal.
2. Inventory Your Tools
Once you understand the situation, your next step is to take stock of the tools at your disposal. What resources and advantages are you bringing to the negotiation table? A few things to consider:
- The value of your solution
- Your sales skills and tactics
- Your prospects’ current pain points
- The delivery method or meeting venue
- Points of leverage, including possible value adds, discounts, special service plans, partnerships—get creative with these!
This stage is vital because it’s awfully difficult to set your negotiation plan if you don’t know what tools are available to you. You’d never start cooking a meal without knowing what ingredients you had in the fridge. It’s the same principle here.
3. Create a Plan
Step three of mastering your next negotiation is to create a game plan. Start with an overarching plan that spans the entirety of what you hope to achieve in the conversation, then break that down into individual tactics you can use in various scenarios, should they arise.
RELATED: How To Recognize Your Client’s Negotiating Tactics
What should you include in your negotiation plan?
- Your opening offer
- Following offers
- Potential objections and their counters
- Minimum acceptable deal criteria (AKA: when to walk away)
You may want to consider scripting portions of your negotiation. Having the right language prepared will help build your confidence entering the conversation and ensure that you always have the phrasing you need to advance the sale.
Remember, negotiation isn’t a zero-sum game. The goal is to walk away from the conversation with both parties feeling good about the deal and its terms. Approaching negotiations collaboratively will increase your chances of success in closing the deal and building your relationship with your client.
This step is important because your negotiation plan is your battle plan. You've already lost if you arrive at the conversation without a plan.
4. Open Negotiations
Once you have a plan, you’re ready to open negotiations. Step four is to do just that—start your conversation with your prospect. The most important thing during the opening of negotiations is to begin by exchanging information and establishing trust. You want to build on your existing rapport with your client or prospect to set the stage for a productive conversation.
As the negotiation progresses, you’ll lean on the information you gathered in steps one and two and launch your plan from step three.
Here are a few tips for this step:
- Clarity is King: Communicate your offering, ideas, and terms as clearly as possible. Remember that a confused mind always says no.
- Be Bold: Don't be afraid to go first! It's your responsibility as the salesperson to initiate and move the negotiation along.
- Be Straightforward: If you believe you have a higher price, disclose that information early on. Then, help your contacts recognize the value you bring to the table so they can help you with the negotiation.
Why is this step important for mastering negotiation? That’s self-explanatory. If stages one through three have been preparation, step four is game time.
5. Read Conversational Cues
Once negotiation begins, you need to focus on the conversation itself. As with any conversation, your negotiation is about more than the words you say—it’s also about nonverbal and verbal conversational cues.
Observe your prospect’s body language if possible. If you’re negotiating over the phone, listen for vocal cues. Allow these cues to guide your conversation and help you choose the strategies and tactics you assembled in your toolkit in step two.
Remember, oftentimes, your client will come into a negotiation with their guard up. Focus on what your solution will do for them instead of focusing on the numbers, and pay close attention to their responses.
Some other tips for negotiating in consultative B2B sales are:
- Retain the ability to walk away. If you can walk away from a bad deal, you give yourself power in the negotiation.
- Don’t offer to ask your manager. If you offer to ask your manager for a price reduction, you’ve communicated that you don’t believe the investment you’ve offered is necessary.
- Defend the investment. Don’t hesitate, don’t stutter-step. Reinforce why the client needs to invest the dollar amount in question to achieve the results they want.
Reading cues and responding to your prospect is a vital part of the negotiation process. Without the ability to read conversational cues, you risk steering the negotiation in the wrong direction or jumping the gun.
6. Close the Deal
The last step you need to nail to master negotiation is your close. To close the deal, you need to watch for the right opening, then make your final offer. Ensure that you’re moving forward with a solution that works well for all parties involved.
Don’t make the mistake of thinking that the close is the end of the process, though! A loyal client is worth more than any one deal. Take steps to continue nurturing the relationship post-negotiation.
Step Zero: Before Using Your New Sales Negotiation Training
Following the steps in this guide will help you handle your sales negotiations with the confidence and ease of a seasoned pro. But mastering negotiation is only one piece of the sales skill puzzle.
Before you can negotiate with your prospects, you need to initiate productive, value-based conversations in the first place. Cold calling is a core skill that every sales professional needs under their belt to succeed.
Check out my free resource, the Cold Calling Mastery eBook for actionable tips and tricks to help you approach and nail your cold calls.
