Are your negotiating skills working for you or could they use a little brush-up? Everything you want is either owned or controlled by someone else! Think how many times in a day you are negotiating for something in life -whether in a sales role negotiating with a smart buyer, trying to receive a better price on a Tory Burch handbag or negotiating with your three-year-old to take a bath. We negotiate daily. Let’s look at some terms and concepts used in negotiating and what you can do to improve your negotiating skills:
The fact is we spend a lot of time negotiating with others. In a business environment, outside the USA, many cultures expect to negotiate as a part of the selling process. As I wrote in a blog on Errors Sales Manager Make (but don’t have to), I mentioned this is where sales managers can bring their training and leadership to help and support their sales teams.
What are some definitions and concepts? Legacy selling is getting your price on your terms and conditions. Negotiating is modifying your price or term in some way to get an agreement. In traditional selling that has failed, salespeople typically justify their cost by stacking enough features and benefits with the hope; the buyer sees value. This methodology undermines the value of your product or service. However, what do some buyers do to try and gain an advantage?
Here are some examples if what some smart buyers will attempt to “stack the deck” in their favor by:
- The buyer is compensated on the percent off the list price (that you agree to give him).
- You uncover there is the preferred “A” list of vendors, and you are not on that list.
- The buyer will pre-negotiate and re-negotiate whenever he wants. She may not ask for everything up front but spreads his requests out over time.
- Some buyers will do things to throw you off balance. As an example, bring their lawyer to the first meeting.
- Some unqualified buyers are not the end user of your service. Their purpose is to pretend to be qualified only to get the best price.
- Other buyers create urgency or act rushed and therefore push you for an immediate commitment.
Here are a few negotiating steps you can take now to reinforcement your position and counter some of these tactics used against you:
- The smart buyer will want to ask you all the questions but may not be open to being asked questions. How do you know where the buyer is on the buyer’s journey unless you ask questions? Some buyer’s use tactics to mislead you on the purpose of the meeting. This is why salespeople need to know the agenda and the reasons for having a meeting. Other tactics used are to intimidate by indicating there are plenty of other capable vendors besides yourself and you may not qualify. Another typical smart buyer’s tactic is never to let you know where you stand in the negotiating process and the buyer threatens to take the deal away from you at least once. A widespread practice, which I experienced is the customer’s expectation of free consulting as a prerequisite for a promised future business arrangement that never materializes. Do you have a plan for each of these standard practices?
- One negotiation tactic may be obvious to some salespeople. The majority of all purchases are made on emotion and justified, later, intellectually. A critical step in any selling process is to understand the buyer’s pain and know your solutions will solve their pain. A buyer buys for their reasons and not for the seller’s reason. Do you regularly ask questions of the purchaser to get clarity, provide education as a value and look for compelling emotional reasons for the buyer to do business with you?
- If you answered the above questions, then do you, when appropriate, make certain you have had a discussion about money and decision making. If the buyer is in the decision-making step in the buyer’s journey then it is important to know if there is a budget set aside for your product or service? If they do, is the person you are negotiating with the decision maker? Both questions may be hard to ask, but for clarity sake, you need to know. In the world of business negotiations, the subject of money and finding the decision maker needs to be addressed openly and freely.
These are just a few beginning steps you can take to improve your sales performance, provide quality responses to demanding buyer’s tactics and improve your negotiating skills. How about you?
What are some of your most difficult buyer tactics?
Are you well prepared to engage with the most demanding customer?
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