Negotiation Skills – Winning As a Seller

Just as a buyer can employ certain tactics to strengthen her negotiation position and results, a seller can do certain things to benefit his position and results. It is learned negotiation skills that give a seller advantage and the consistent application of them will pay off over time.

In a previous article, I noted how the buyer in a negotiation usually has the upper hand, because there are more things a buyer can do to successfully conclude a deal. The reason for this is fairly obvious: a seller has a product or service they need to sell to make money, and in almost every market on the planet, there is substantial competition for that product or service. Buyers can always go elsewhere and try to get a better deal if they don’t like the one they are engaged in. It’s what makes selling anything a tough, tough job.

But, there are things a seller can do to help his position. Here we will discuss a few.

1. Make it clear you have the buyer’s best interest at heart.

This means be sincere and prove it. Using over-baked, cliche ridden lines about how much the you care for the buyer and will suffer a loss just to make her a great deal – does not cut it. Buyers see through this and it has the reverse affect of what most cheesy sellers are hoping for when they use this method. Buyers want to know the seller is there for something more than simply making money. Buyer’s understand why the seller is selling (to make money), so good sellers reveal to buyers there is more to it than just that. Communicating to the buyer that you love what you do, and giving them specific reasons why, will go a long way toward lessening the buyer’s concern that she will only be sold the most expensive product at the highest margin.

Make it personal. Tell the buyer you sincerely hope she will be coming back to see you on her next purchase because you hope to establish a strong, ongoing relationship. Few people are so hard nosed they will not react positively to a sincere offer of friendship. As a seller, you can make use of the natural human tendency to want more friendships. And if a buyer sees you as a friend instead of a huckster, she will benefit you with a sale and more to come.

2. Take a “Low Key” approach.

A low key approach is self-explanatory. It means “not high key”. A high key approach is talking a mile a minute, asking insincere questions, laughing inappropriately and too often, showing the buyer twice as much product as she needs to see and telling her twice as much information as she needs to know until she buys something… just to get rid of you. Interestingly, most people who go into sales naturally take this approach with buyers. And it usually does not work.

A low key approach is vital for a seller seeking to use negotiation skills to ensure a profitable outcome. This seller reminds the buyer he is there to assist her – not push her. He suggests products or services that may meet her needs and if they don’t, he will gladly refer her elsewhere. He reminds her he wants her to be happy, but not so that he makes a fat commission or profit, but so that she considers him a consultant, someone to whom she will come back to for counsel, or advice.

3. Apply the lever of time.

A buyer can negotiate like a bulldog. Usually a seller cannot. Again, this is because a buyer can usually walk if they are unhappy, whereas a seller must find another buyer if there is no sale. However, a seller does have the issue of time to his advantage.

Everyone has a limited amount of time. Nothing could be more obvious. Well, for a buyer, this has a cost, because if a buyer cannot make a deal work, she must go on to the next seller, and try again. And if that seller cannot make a deal or does not have what she needs, she must move on again. And again.

For most buyers, this a nightmare. Unless they are simply having fun with the buying process (and some people actually do), there is a strong likelihood the buyer simply wants to find the right product or service at the right price and get it done. Negotiating can be tiring and take away from other productive uses of one’s time.

A clever seller keeps this truth in mind at all times. He will engage with the buyer in every way possible, giving her total focus and attention and immersing her in the process of buying as much as he possibly can, for as long as he can, so that she will not be inclined to end the process and go somewhere else and start the whole thing over. As a seller, you remind the buyer how much she has learned about your product or service, how much you have devoted yourself to working through the deal, and how much more you are willing to do to see a beneficial result for both parties.

Now some sellers push this concept by claiming deadlines, such as a sale ending in 10 hours, or competition, such as another buyer who is waiting to make an offer on the same product, but often these are disingenuous methods of pushing buyers to buy before considering further. These methods may work, but if they are false, and a buyer learns of it, you may lose a customer for life. It is better to be straightforward, and tell the buyer about something imminent if it is true, but never use it to push buyer to a decision.

Just as a buyer can make productive use of negotiating skills, a seller can employ methods to give him a greater likelihood of success. Negotiating is a crucial element of buying and selling almost anything, and those who know the principles are most often the ones who realize the profitable deals.

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You Don’t Have to Make Negotiation a Part of Every Sale

I often get requests by sales mangers for negotiation skills training for their sales people when in fact upon further investigation their people usually need consultative selling skills training first. You cannot negotiate effectively if you cannot sell effectively first. Both are processes which need to be learned and applied in the correct order. However over 90% of sales people follow no logical process when selling or negotiating leaving their sales at risk.

Everybody negotiates all the time, at work, at home, and as a consumer and as a sales person. For some people it seems easy, but others view the process of negotiation as a source of conflict to be resisted and avoided if possible.

Negotiation is a process and a skill that can be developed. Negotiation can be described as a process that involves two or more people dealing with each other with the intention of forming an agreement and a commitment to a course of action. In a sales environment, negotiation often involves a series of communications between two parties to form an agreement about the details of a sales solution.

In many cases, it is possible for a proposal to be generated that satisfies the needs of both parties. However, sometimes one or more parties may have to accept less than they had hoped for when they entered the negotiation process. And finally, in other situations, the fulfillment of one party’s wishes may come entirely at the expense of the other party’s.

Therefore, negotiation is the process of navigating your way through each of these alternatives, ideally aiming to come to an agreement that is complimentary to both parties’ needs.

Possible outcomes

There are five possible outcomes of negotiation:

  1. Compete = Win:Lose
  2. Avoid = Lose:Lose
  3. Accommodate = Lose:Win
  4. Compromise = neutral
  5. Collaborate = Win:Win

In my experience when I negotiate I aim for #5 and get either #5 or #4. I know that I do not want #’s 1-3 to happen. However too often I see sales people end up with #’s 2 or 3. This is no good for anyone and can train clients to expect things they do not deserve like unnecessary discounts.

Rule of thumb for negotiation in sales:

  • Unless you have the power or authority to change or modify terms, create new product solutions, you cannot negotiate.
  • Negotiation should never be a substitute for selling. You need to be able to sell well first and foremost.
  • Negotiation is an effective strategic tool that you use ONLY when you need it.
  • The earlier you give away concessions in the sales process the less impact they will have.
  • Be aware of giving sales people the authority to discount. All too often this is a licence to give away your margins too soon and too often. We see this when people ‘cave in’ on price too soon for fear having to deal with potential conflict which usually doesn’t eventuate if the sale is done effectively. However they never let the sale run its course to find out.
  • Discounting is a negotiation tool that should only be applied as a last resort and should have a trade off in it for your business so can you benefit from the deal as well. This is different from volume pricing which rewards people for buying bulk from you.
  • If you postpone tough negotiations whenever possible you will miss learning about new things, getting new ideas, new ways of pulling your offer together as well as creating potential conflict down the track.

You sell when you:

  • Identify clients’ real needs and priorities, create viable solutions that are of value to the client and outweigh the cost of purchase and gain agreement to move forward to close the deal and do the work.
  • Can’t vary the terms. If you can’t vary terms and negotiate and the client won’t agree to move forward with you on the current plan then it is a ‘no sale’. Move on rather than give it away. Giving it away is not negotiating it is just giving something of value away which costs you.

You negotiate when you:

  • Both parties can vary the terms
  • Resources are scarce
  • Agreement and conflict exit simultaneously

Value versus Cost

To help you avoid unnecessary negotiations when selling first of all find out what people really value and what is most important to them.

If you and your sales people are having trouble doing this then you need to improve your and your sales teams’ ability to have quality business discussions with clients and prospects, in particular, their ability to thoroughly understand their customers priorities and business needs and how your products and service can be crafted into relevant solutions that will address specific requirements and create value for the client.

This would include developing their questioning, creative problem solving, up selling/cross selling and solution selling skills.

Effective negotiation in a sales situation requires people being able to:

  • Be Assertive
  • Challenge every assertion
  • Get the real facts before offering up anything
  • Uncover real needs and issues
  • Negotiate late and negotiate little
  • Manage conflict and not take it personally
  • Analyse the situation and the demands and weigh them up appropriately
  • Keep the customers’ needs in mind at all times as well as your own
  • Aim high
  • Respond to demands for concession
  • Develop a proposal with guide-lines and trade-offs (if necessary)
  • Prevent the customer from ‘fragmenting’ your proposal
  • Present a total proposal that ‘adds up’ to a win/win solution
  • Focus on achieving satisfaction for both parties
  • Don’t make the 1st move
  • Don’t’ accept the 1st offer
  • Are willing to walk away
  • Use all their most effective communication skills (listening, paraphrasing, questioning, problem solving, etc.)
  • Apply a process
  • Don’t avoid negotiations
  • Have a ‘negotiation consciousness’

When do you need to negotiate instead of sell?

  • When a client demands an arrangement which is different from what you are able to offer
  • When you are dealing with a tough client who wants to ‘win’
  • When a client and you disagree on some aspect of the proposal
  • When the client will not agree to your initial offer (find out why because some people just like to win and want to bargain as part of the process. This is quite common is some cultures as part of the ritual of the sale)
  • When we are unable to reach agreement, even after many discussions
  • When you can’t move forward unless you change your approach some way
  • When you can’t deliver from you current suite of resources or you need to step outside of what you normally do to win the business (take care as this can be very costly)

I hope this helps put some perspective to selling and negotiation.

Remember everybody lives by selling something.