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The Easy Way to Prepare for a Successful Sales Negotiation

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Sales negotiations are challenging.

Even the most experienced negotiators can struggle when things get tough. And when the going does get tough, it’s tempting to fold and give the client what they want. At least you closed the deal right?

But what we want is a deal where everyone wins. And that’s not so easy, especially for those of us not in pure sales roles. We’re not wheeling and dealing every day.

The secret to win-win is knowing what to expect.

I am no master negotiator by any stretch of the imagination. I can be convincing. I can be persuasive. But when it comes to the pointy end of the deal, I always feel awkward and out of my depth. Clients have the ultimate bargaining chip; to take their business elsewhere.

But I have learned a thing or two over the years about how to improve my negotiating position.

And one of those things is preparation.

The Easy Way to Prepare for a Successful Sales Negotiation

How to create a negotiation plan

  1. What are the issues? List out all the potential objections, disagreements or conflicting assumptions.
  2. Why are they issues? For each of the issues, write down your perspective and your client’s perspective. There could be differences between what the organization wants vs the individual. The point of this step is to listen and understand where everyone is coming from.
  3. What are the measurable objectives? What do you and your client want? You should be able to express it in value. For example, the clients want 90 days credit, you want 30 days.
  4. Find common ground. Look for similar objectives. Don't focus on differences in the negotiation (that causes friction). Start with where you’re aligned.
  5. Assign relative power. This was a big one for me. I always assumed as a supplier I had no power and the client held all the cards. Not true. There are many sources of power and you may find you have the upper hand on some of negotiating points. For negotiable item, write down what it’s worth to your client and what it’s worth to you.
  6. What’s negotiable? For every item that might be negotiable, ask yourself: 
    1. what it costs you?
    2. what it’s worth to your client?
    3. what’s your best case scenario?
    4. what’s your worst case scenario?
    5. what you want in return if you have to make concessions?
  7. Questions to ask. Make a list of all the information you have, what you need to learn and the questions you want to ask. Remember you don’t need to reveal all your cards. You may have some useful information that’s best kept up your sleeve (for now).
  8. Internal alignment. Make sure you get your manager to agree to your negotiation strategy before you go in hard. Don't get burned like I did. I had a client who called my boss after I dug my heels in on a negotiation. They made some threats about leaving so my boss caved in and gave them what they wanted. Meanwhile, I'm completely undermined and look like a powerless idiot.
A good negotiation is about creating fair value and making balanced compromises so everyone wins.
The Easy Way to Prepare for a Successful Sales Negotiation

5 negotiation tactics that work

  1. Price anchoring. Anchoring refers to our tendency to rely on the first piece of information offered when we make decisions. Every time you see a discount with “$100 to $75” , the $100 is the price anchor for the $75 sales price.
  2. Multiple offers. Clients like choice. Make a few offers, all just as valuable to you. If they refuse them all, ask which they like best. Their answer gives you clues about where to look for value-creating, win-win opportunities.
  3. Contingencies. Contingent commitments often create incentives for compliance or penalties for noncompliance. You might propose paying penalties if service falls short of the agreed levels.
  4. If I can, will you? Always ensure that any concessions you make are an exchange, not a gift. Your client should offer something in return (it doesn't have to be equal value.)
  5. Make the first move. Don't wait for an invitation. Submit your proposal first. You'll establish baseline prices, terms and conditions and control timelines. Plus you'll be firmly in the negotiation driving seat.

Always be slow to say “No.”

You don’t have to agree on the spot to a concession. In fact clients may be suspicious if you’re willing to crumble so quickly. It makes it look like strategy and you're playing them for fools.

Let them know you need time to think about it - even discuss with senior leaders, before you can make a decision.

The Easy Way to Prepare for a Successful Sales Negotiation

Great book

+ Bargaining for Advantage: Negotiation Strategies for Reasonable People. This book is by the Director of the Wharton Executive Negotiation Workshop. What I liked so much is that it’s not about ruthless negotiations. It’s a very practical guide to identify your personal negotiation style. Lots of tips and great advice plus a step-by-step guide to negotiation success.

I ordered the updated edition because it has new insights on online negotiations. There's a discussion on how gender and cultural differences can derail negotiations, too. These are important influences to be alert to in the new world of business.

The Easy Way to Prepare for a Successful Sales Negotiation

Free negotiation course

Successful Negotiation: Essential Strategies and Skills. A free course to build practical negotiation skills. Learn how to use and apply negotiation strategies. Created by the University of Michigan, and offered by FutureLearn. Suggested time is 2 hours a week over 7 weeks.

Disclaimer: I’ve not taken the course but 22, 426 people have and it has a 4.9/5 rating. Worth checking out.

The Easy Way to Prepare for a Successful Sales Negotiation

In other news

Program on Negotiation. Harvard Law School blog with snack-sized advice on negotiation skills and conflict resolution. Each article is less than 250 words and always has some actionable information.

A Simple Sales Negotiation Tactic that Works. An article I wrote that digs deeper into negotiation preparation. Also explores price anchoring as a strategy.

Emotion and the Art of Negotiation. HBR article on how anxiety, anger, disappointment and excitement influence deal making. Lots of advice on what to do about it. I especially liked the tips on managing your counterparts emotions.

Active Listening in Sales: The Ultimate Guide. Without credibility and trust, you’ll never close that deal. And the easiest way to earn that is to listen. Sounds easy enough, right? I can tell you from personal experience that we jump to quickly to solution mode, or are waiting for our turn to talk. I’m as guilty as anyone. Learn to use verbal and non-verbal communication to "hear" what your client is saying.

+ The KAM Club. Learn more about the world's most amazing community of key account managers. And get access to tools, templates, guides, coaching and training, like How to Sell More.

The Easy Way to Prepare for a Successful Sales Negotiation

Quote of the week

Let us never negotiate out of fear. But let us never fear to negotiate ~ John F. Kennedy

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Have a great week

Warwick Brown

Warwick Brown


Warwick Brown is one of the leading key account management experts in the world. Through The KAM Club, a global membership community for key account managers, his blog that reaches 20,000 people every month, and a range of training and coaching services, Warwick has helped thousands of key account managers get better results, faster.
Go here to read Warwick's story from key account manager to entrepreneur. If you want to send Warwick a quick message, visit his contact page here.

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