For a deal to close, you need successful negotiations with your prospects. That said, the process can be delicate. It’s full of unspoken rules dictated by psychology and bias, and it’s different every time. There are several pitfalls you can face in a negotiation, even if you think you're playing your cards correctly.
These five negotiation skills are essential to having a strong foundation in negotiation:
It is important to internalize and practice these negotiation skills from the very first meeting with your client until the long-term follow-up with them.
Here we go.
It is imperative to demonstrate to your clients that you understand their industry's challenges at the start of your meeting. Richardson Sales Performance says this not only shows the client you know how to solve their issue. It also “primes” them to view you and your proposition more favorably.
To convince your client you're giving them the best deal, introduce and then refute an alternative to your offer during negotiations.
Studies have shown that giving clients the chance to consider information that countered your first offer may help them overcome the anchoring effect.
Rather than focusing on scarcity and limitations, consider the idea of expanding the pie, in which both sides will benefit from the negotiation.
If you were able to lower the price per item or service, you could increase the size of a client's order.
A Harvard Law School report on "Sales Negotiations" suggests saying "I will make that concession if you become more flexible on another issue." as an alternative to granting the concession.
It is common for a negotiation to be centered around the price, and often the price is fixed on your end. In fact, sales reps can overlook other factors that may be important to a client's decision-making, such as delivery schedules and payment terms, if they over-fixate on price.
You don't have to stop negotiating with your client once you sign a contract with them. In several studies, it has been shown that trust and confidence are more effective than formal contractual arrangements in building relationships, according to MIT Sloan Management Review.
To summarize, make sure your clients are satisfied with the outcome of your negotiations and develop a relationship beyond the deal with them.
While negotiating, keep three principles in mind: you know more about the industry than your client does, every negotiation should be seen as a compromise, not a strong-arming, and your relationship with your client doesn't end when the deal is signed.
When you use these tactics, you'll feel confident that you understand what clients are looking for and that you can deliver on their demands.