Negotiating is a reliable fact of business life. For some sales folks developing the abilities of negotiation are one of the more difficult sales strategies to master.
The greatest misunderstanding regarding the negotiation process is it's adversarial in nature. It does not have to be that way.
Here are 3 powerful sales tips that may help make it easier for you when it comes time for your next negotiation.
Tip 1. Go First . Many sales reps are hesitant to make the 1st offer, because they feel just like they might be setting a fee that is too low (or too high, dependent on the situation). Let's say you have developed an especially compelling value added bundle and need to present a price to your prospect. Although this is going to be the 1st time your prospect is hearing your offer, it makes better sense going into a negotiation presuming that the prospect has a fair idea of the price of your proposal. If you permit them to go first their first offer will invariably be low.
When you make the first pricing offer, you are setting a 'pricing anchor ' for the remainder of the negotiation discussion. According to a Harvard Business School article, when the seller makes the 1st offer, the final price is often higher than if the purchaser made the first offer. The first price sets the 'price anchor'.
Tip 2. Be Quiet. Most sales folk are extroverts and like to talk. When faced with a situation that makes most people nervous, like in a negotiation setting, folk have a tendency to chat more. When we chat, we miss lots of info that is useful to the negotiation. If you make an offer and your customer balks, saying "your price is too high", don't reply immediately. If you remain quiet, your customer will fill the silence with reasons explaining why they feel the price is too high. From the data you gather, you can then continue the negotiation process using the info you have just learned. Be patient and let them talk.
Tip 3. Know precisely what you need. You should always enter into a negotiation with a clear plan of what you are ready to accept and what you aren't happy to accept. Most people go into a negotiation session with one or the other. Some sales people go into a session with a technique of 'hope for the best'. When you have very clearly defined parameters, you have more flexibility in the negotiations process. When you have more flexibility, the negotiations process becomes a lot less nerve wracking.
PS. Never show your strategy to the other party, or you will give them too much leverage.
The greatest misunderstanding regarding the negotiation process is it's adversarial in nature. It does not have to be that way.
Here are 3 powerful sales tips that may help make it easier for you when it comes time for your next negotiation.
Tip 1. Go First . Many sales reps are hesitant to make the 1st offer, because they feel just like they might be setting a fee that is too low (or too high, dependent on the situation). Let's say you have developed an especially compelling value added bundle and need to present a price to your prospect. Although this is going to be the 1st time your prospect is hearing your offer, it makes better sense going into a negotiation presuming that the prospect has a fair idea of the price of your proposal. If you permit them to go first their first offer will invariably be low.
When you make the first pricing offer, you are setting a 'pricing anchor ' for the remainder of the negotiation discussion. According to a Harvard Business School article, when the seller makes the 1st offer, the final price is often higher than if the purchaser made the first offer. The first price sets the 'price anchor'.
Tip 2. Be Quiet. Most sales folk are extroverts and like to talk. When faced with a situation that makes most people nervous, like in a negotiation setting, folk have a tendency to chat more. When we chat, we miss lots of info that is useful to the negotiation. If you make an offer and your customer balks, saying "your price is too high", don't reply immediately. If you remain quiet, your customer will fill the silence with reasons explaining why they feel the price is too high. From the data you gather, you can then continue the negotiation process using the info you have just learned. Be patient and let them talk.
Tip 3. Know precisely what you need. You should always enter into a negotiation with a clear plan of what you are ready to accept and what you aren't happy to accept. Most people go into a negotiation session with one or the other. Some sales people go into a session with a technique of 'hope for the best'. When you have very clearly defined parameters, you have more flexibility in the negotiations process. When you have more flexibility, the negotiations process becomes a lot less nerve wracking.
PS. Never show your strategy to the other party, or you will give them too much leverage.
About the Author:
For more tips on improving your sales negotiation abilities you should come to the site PinnacleSelling.com. The site is a rich source of sales tips and sales systems to help outsell and standout from your competition. Joe Mangano, PinnacleSelling's Founder and Editor specializes in helping sales folk, sales management and entrepreneurs improve their sales performance.
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