There are No Shortcuts in Negotiation

How would you rate your negotiation skills? What is your approach? Do you rely on your experience and wing it as it comes? Or are you consciously accessing sources to gain more knowledge on how you can improve your negotiation performance?

This is the latest blog post in the series of sales negotiations. If you missed the previous ones, review them here:

1. Don’t give discounts
2. Weak pipelines lead to discounts
3. Small commitments lead to bigger deals
4. Have you moved on from old sales tactics?

Skill or method?

Is negotiation a skill, a method, or both? Are there tactics that will give you the upper hand in negotiation situations? These are questions I have for you, but you probably also have asked yourself. I have read many sales books on negotiation, followed sales gurus like Jeb Blount and Anthony Iannarino and reviewed their recommendations. In addition to that, I had the privilege to talk to industry-leading Procurement Experts. They all come to one conclusion:

There are no shortcuts in negotiation

It is a strategic mindset.

If there are no shortcuts, then the opposite must be true: It is strategic. This means you must consider long-term objectives to achieve the desired outcome.

In this blog post, I want to help you see the trees from the negotiation forest. Sales negotiation is, above all, a mindset. The more you are aware of this and how you can turn it in your favour, the better you will be positioned at the customer’s negotiation table. I call this negotiation mindset PULL.

• PROCESS to eliminate ALTERNATIVES
• URGENCY drives CONCESSIONS
• LEVERAGE to INFLUENCE
• LEVEL up your VALUE

1. Trust your Process to eliminate alternatives

Customers make many attempts to negotiate early in your discovery meetings. I am sure you recognize these:

• Give me a better price, and I will consider you
• Your competitor is waving these surcharges
• Send me your proposal, and I will discuss it with my manager
• I am reviewing all options right now. Send me your best deal.

What do these have in common? The customer still has alternatives. The fewer or no other options the customer has, the more power you have at the negotiation table. The number one rule to remember is you should never start negotiating before you have a verbal agreement that you are the best fit for what the customer needs.

The only way to do that is to trust your Selling with the Buyer’s Perspective sales process. Research claims that sales closing ratios can double if you kick-start the buying process and take multiple stakeholders through Why Change?, Change to What? , and Change to Who? Phases. Then, get verbal approval before negotiation can start. Trusting your sales process is the way to eliminate alternatives for the customer.

2. Urgency drives Concessions

The one who wants the deal the most will give in to concessions first. Sales negotiation is like an emotional chessboard. Urgency is linked to motivation and desire. As Jeb Blount beautifully describes:

At the sales negotiation table, the person who exerts the greatest amount of emotional control has the highest probability of getting the outcome they desire. Mastering sales negotiation begins and ends with mastering your own disruptive emotions.

Blount, Jeb – INKED

Thankfully, there are ways to help you control your emotions. One is to trust your sales process as described above because then you have the upper hand, and two is to ensure you have enough valuable opportunities in your active pipeline so you feel less pressure to win this particular deal. Stakeholders at the negotiation table, in particular trained procurement officers, can sense how much you want their business.

If you give in to your emotions and be the first to grant the customer something they demand, you immediately put yourself in a position of weakness. Offering discounts is often a sign of that. On the other hand, the more valuable you have been with your business ideas to change the customer out of the Why Change? buying phase and collaborated with the customer on what solution criteria they should have in place to drive the business outcome of your idea, the more pressure you have put on the customer to want this deal to work. Their decisions are driven by their desire for business outcomes.

3. Leverage to influence

Think of it this way: The customer has something you want (their business), and you have something the customer wants (the business outcome). Both can be expressed in value. It’s important to understand that what is valuable to your stakeholders might be less valuable to you. Think about customized reporting or access to a key account service desk. These are services to exchange. But, if you give leverage away, you should receive something in return of equal or greater value.

Never give anything away for free.

Always think: If you ask for this, what will you give me in exchange? Leverage is currency, and you should treat it as such to influence.

4. Level Up your value

When you, as a potential buyer, walk around a showroom (of anything) and look at the displayed items, something may catch your eye. Your brain is connecting the potential value of the product to you, and you already have a price in your mind that you are willing to pay for it. Then, you walk to the item to look closer and turn around the price tag so you can read it. Our brains are clever computers; they compare similar products you have seen before in milliseconds and compare the value gap versus something you currently possess or use. Your customers follow the exact process when they hear your price. They hear, compare and react:

• “Your competitor removes this surcharge; we expect you to do the same.”
• “What discount can you give me on that?”
• “You are a lot more expensive than your competitor.”

This is their emotions speaking. How do you react? While controlling your emotions, you pause.

Realize that price is nothing more than a representation of value,

so the customer’s reaction indicates they do not understand the value you offer. Instead of having a price discussion, you level up your value. You go back to your sales process, where you may have lost your customer’s understanding of why they should change or you may need to go back to the business case agreed on at Change to What?

Conclusion

Customers will ask for discounts, concessions and exceptions many times during the sales cycle. Handle these carefully and use PULL as your guidance to ensure you have the best position at the negotiation table. Believe in your sales process, keep your emotions under control and only give something when the customer offers something in return. Price is a representation of the offered value. If that is not clear to the customer, you need to go back to your sales process.