(reading time: 3 minutes)
Salespeople must develop a wide range of skills in order to succeed, but one of the most overlooked skill in sales is the ability to negotiate. Lots of sales training tends to gloss over this part of the sales process, even though negotiations happen throughout every transaction. Adding even more complexity is the fact that people tend to believe that they’re better negotiators than they really are, which is true for both buyers and sellers.
So, we’ve decided to put together six tips to help you become a better negotiator:
1. Stop trying to be ruthless
No matter how many blue shirts with white collars you own, you’re not Gordon Gekko, nor should you aspire to be. It’s a common misconception that you need to be ruthless in negotiations to get ahead. As a salesperson, buying into this myth will only hurt you. Negotiating isn’t about pulling one over on someone else. Rather, it’s about coming to a mutually beneficial agreement. As a salesperson who is presumably looking to build long-term relationships, that’s what you should always aim for.
2. Set an “anchor”
Negotiations are heavily influenced by the first relevant number in a negotiation, known as an “anchor.” Studies have shown that when the seller makes the first offer, the final price ends up being higher than if the first offer was made by the buyer, because they’ve set the anchor higher. Of course, since you’re a salesperson representing your company (which likely already has pricing in place), this part is easy. But make sure you’re working off of a starting number that you’ve set – or your anchor.
3. Stay calm, be quiet, and listen
In movies, negotiations usually involve one (or both) of the parties screaming into the phone or banging their fist on a conference room table. In reality, calmness, sensibility, and the willingness to listen to the other side’s perspective should rule the day. When negotiating, be courteous, stay calm, and let the other party say everything they want to say. Not only will it show them that you’re taking their perspective seriously, but it will also give them an opportunity to tell you exactly what it is that’s most important to them and why, which will provide you with a road map on how to close the deal.
4. Focus on the other side’s needs and pressures
We have a natural tendency to worry more about our own problems and what we want and need rather than about the problems of others. Maybe this is the deal you need to hit your sales goal, or maybe your sales manager is getting on you about making sure it closes. In a negotiation, however, it’s critical that you focus on what the other side wants and identify what pressures they’re under. It’s your job to figure out what they want, and why they want it. Once you’ve uncovered these things, use them to your advantage when negotiating.
5. When you give, try to get something in return
When negotiating, the prospect is likely to ask you to do something for them. They may ask you to reduce the price, or to throw in something extra. If you agree to do this, you should always try to get something in exchange. For instance, in exchange for a discount, get the prospect to commit to a longer term contract or to pay for a whole year up front. Or agree to throw in something extra, but only if they move forward immediately. Whatever it is, use their requests as leverage to get something favorable on your end.
6. Be willing to walk away
This is perhaps the most well-known piece of advice for becoming a better negotiator. In sales, your ability to walk away depends on your company’s needs and how far they’re willing to go to close a deal. But, it’s important to remember that everyone has their limits and sometimes it’s best to simply move on. Some prospects have unrealistic expectations during negotiations and nothing you say or do can change those. So if the other side isn’t negotiating in good faith and a deal seems impossible, don’t be afraid to walk away from the negotiating table.