Your team of sales reps stands to gain a great deal from developing a thorough understanding of the art and science of sales negotiation. However, as an esteemed employee profile assessment firm revealed to Forbes, over half of individuals working in sales lack the essential skills necessary for success. So, how can you ensure your sales reps have the tools they need to further your bottom line? First and foremost, by identifying critical sales negotiation skills and putting them into practice.
Here are the top sales negotiation skills your reps must develop to help your organization stay successful.
Skill 1: Be Prepared
While the importance of preparing for sales negotiations may seem obvious, with the rise in social selling and virtual sales in the past twelve to eighteen months, it’s no surprise many sales reps no longer feel certain they have the information necessary to prepare for negotiations. Unfortunately, B2B clients are noticing – in fact, over 80% of them felt that sales reps entered negotiations unprepared even before the recent increase in virtual sales.
Sales reps should begin sales negotiations with a clear idea of what they want as the result of the negotiation process, as well as the needs of the client. In addition, it’s crucial to set boundaries for any concessions that may come into play before negotiations begin. Clearly defining goals and thresholds in advance allows reps to not only set hard limits for any compromises but helps set the stage for a mutually satisfactory deal.
Skill 2: Keep Communications Two-Way
As mentioned above, in many areas of business, face-to-face negotiations that end with a handshake are giving way to virtual negotiations. While it’s critical for your reps to engage in sales training to build the skills necessary for each negotiation arena, it’s just as important to maintain a personal touch during the negotiation process. For reps, this means limiting negotiations that are unable to take place in-person to video chats or phone calls instead of email. Facilitating a live, back-and-forth negotiation is critical to avoid miscommunication, maintain power, and expedite the negotiation process.
Skill 3: Negotiate With the Right Individuals
While developing an end goal for the negotiations process is critical, all the preparation in the world is rendered ineffective if your sales reps aren’t negotiating with the right individuals. Reps should be targeting the decision-makers – those with the purchasing power and the authority to back it up. Negotiating with intermediaries not only forces reps to begin the negotiation process anew, wasting valuable time but often results in the beginning at the lower price point arrived at during the earlier interaction.
Skill 4: Discuss Budget and Pricing Early, but Not Too Early
Price is one of the most critical points of contention during any sales negotiation, and it’s simply good sense to ensure both parties are clear regarding the budget early in the process. However, data suggests that careful timing of your price point conversation is key. Research by gong.io shows that sales negotiations are most likely to be successful when the rep discusses the budget during the first negotiations session, at around the 38-minute mark. The bottom line? Reps should be discussing the value proposition, then transitioning into price talks.
Skill 5: Listen to the Lead
If your reps have thoroughly prepared, entered negotiations with the decision-maker, and have presented potential terms of the deal, it’s time to take a breath and allow the lead a chance to further the negotiations. While the lead will undoubtedly counter with a lower price point, it’s important your reps listen to the offer and calculate where it may align with pre-determined goals and concessions. If the rep is quick to offer a concession or price adjustment before the lead has the chance to present their own concessions, they risk missing an opportunity to arrive at a more favorable deal.
Skill 6: Avoid Ambiguity
Both your sales rep and your potential clients have presumably entered negotiations with a clear idea of the final goals and concessions that are acceptable for a win-win deal, and it’s critical to maintain that clarity throughout the negotiations process. For example, when presenting a price point or discount concession, the rep should avoid creating an ambiguous range – when offered a “10 to 15% discount,” the client will always choose the steeper discount. Similarly, conceding to meet in the middle will often lead the client to assume the rep intends to offer a concession that reaches at least halfway, which may be more than the rep is willing to give. Instead, the rep should be specific and provide a concession that much more closely matches the initial sales goal – it’s a discount many clients will be willing to accept, as well as a comfortable starting point for further negotiations.
Skill 7: Expect Something in Return
Of course, the negotiation process should not focus solely on the concessions your sales rep is willing to make. A true win-win negotiation indicates requests and concessions by both parties to arrive at a mutually beneficial arrangement. Encourage your sales reps to make a reasonable request in return for every concession made to ensure your organization receives maximum benefits from the final deal.
Skill 8: Reserve the Right to Walk Away
Data shows that the close rate of qualified leads hovers well below 30% in most sectors. As such, while closing a win-win sale that boosts your bottom line is the obvious end goal of any sales negotiation process, your reps must still reserve the right to walk away when it’s clear the client will be the only one benefitting. Ending negotiations after unreasonable demands, minimal profits, and other red flags can help your organization avoid a negative experience once the lead becomes a client.
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