Do’s & Don’ts for Negotiations in Sales
It’s been a while I wrote on Medium! I am glad that my last article around value based selling received a lot of appreciation & helped people in gaining few insights based on my hands-on experience :)
Today, I am going to focus on the art of negotiation in sales. Most of the pointers that you are going to see from this time forth are based on my interaction with varied industry leaders & learning from them, along with my hands on experience in dealing with clients across the globe and reading varied articles / books!
As someone rightly said — Treat negotiation as a partner dance where the Lead-Follow roles are switched frequently in order to arrive at a Win-Win solution in a harmonious way. I completely resonate with this thought process, especially the harmony part :) As a person who has often been on the receiving end of the sale, I am glad that we don’t always let our minds speak and instead have a filter (saner mind prevails :P).
Anyway, let me directly jump to the agenda of the article! As per my understanding, I am dividing the negotiation pointers in four broad parts:
- Preparing for negotiations
- During the negotiation
- Closing a negotiation
- Follow-up to negotiations
1. Preparing for negotiations
Do’s:
A. Obtain as much background as possible about the person from the client side.
B. Assess the client’s strengths, weaknesses, perceived needs & negotiating strategies
C. Determine your bargaining range and your best option in a negotiated agreement.
D. Prioritise & determine the cost of the concessions that you are prepared to make.
E. Prepare for price or other objections in advance.
F. Develop a negotiating strategy & plan of action.
Don’ts:
A. Enter into negotiations without preparation.
B. Develop negotiating strategies based on assumptions
Remember two things — Success in negotiations is 80% preparation & 20% interaction And, A negotiator cannot be over-prepared, only under-prepared.
2. During the negotiations
Do’s:
A. Adopt cooperative tactics but be ready to use a competitive approach when warranted.
B. View negotiation as an opportunity to build a rewarding working relationship that is mutually beneficial over the long term.
C. Project confidence, credibility & professionalism.
D. Search for common goals, interests, needs.
E. Know when to listen; ask well-conceived questions & maintain two-way communication.
F. Give explanations when rejecting an offer.
G. Refer to the price quotations with qualifiers such as: about, approximately, roughly and in the range of, as it sends a message that your offer is open for negotiation.
H. Summarise regularly the agreed items to ensure that they are understood by both sides before proceeding to other issues.
I. Ensure that the other party / client participates fully in the negotiating process & feels “ownership” of the options being discussed.
J. Keep personalities out of the negotiations. Concentrate on the problem!
Don’ts:
A. Underestimate the other side.
B. Rush into hasty decisions & calculations.
C. Make concessions, even minor ones, unless you ask for something in return or wish to encourage a more cooperative approach from the other side.
D. Make too many concessions in the early stage of negotiations.
E. Make final, best or non-negotiable statements in the early stage of negotiations.
3. Closing a negotiation
Do’s:
A. Anticipate last minute demands when planning your negotiating strategy & tactics
B. Agree to an agenda that reflects your objectives & set realistic deadlines.
C. Listen to the other side’s objections & ask why they are not agreeing.
D. Emphasise the benefits to be gained by the other side by accepting your proposal.
E. Make your “Last Offer” credible & with conviction.
F. Take notes throughout the discussion, including your concessions & the ones made by the other side.
Don’ts:
A. Be in a hurry to close.
B. Make large concessions at the last minute.
C. Rush into costly concessions at the last minute.
D. Push your advantage to the point of forcing the other side to leave the negotiations.
There are two things that I have learned through my own experiences: One, Nothing is agreed until everything is agreed. Second, Not all negotiations lead to the closing of a deal — sometimes no deal is better than a bad deal.
4. Follow-up to negotiations
Do’s:
A. Deliver what has been agreed to.
B. Maintain regular contact with the other side.
C. Follow up objections and seek mutually agreeable solutions.
Don’ts:
A. Consider your involvement finished after the agreement has been signed.
Always remember that the negotiation process does not end with the agreement; instead it is the beginning of a business relationship that should create more opportunities to grow the account for future.
These are few of the mantras that I have been trying to follow during deal negotiations. Hope this helps you all in a small way :) As I always believe, there is so much more to learn, it never stops!
Let me know your thoughts :)
