We all know good negotiation skills are the essence of life and not just in the business world. But how much time do we actually put into developing those skills?
You have to do better than that". You’ll almost certainly hear this from any buyer at some stage. And boom – your into the arena of negotiation.
What can you do? You can walk away, you can lower your price or you can face head strong the opportunity to negotiate through objections.
What is important to understand is that an objection from the buyer is not always a bad sign. It can be positive in one way because it shows interest on the part of the buyer. Why would they be willing to take the time to negotiate if they had absolutely no interest in doing business?
So why do buyers negotiate? Buyers have learned that they can usually sweeten their deal by asking the salesperson to make a concession. In other words – they negotiate. They know from experience that when they ask for a better price, many salespeople immediately will lower the price without any further discussion. Buyers negotiate because it works!
Unfortunately, some salespeople have a tendency to set up the buyer up for negotiating by the words that they use. One time I overheard a salesperson talking to a buyer on the phone. The salesperson said: "Your price is $175.00, is that good enough- Now, how do you think the buyer responded? Of course, the buyer asked for a better price! Therefore be careful about how you communicate with buyers when presenting a price. Make sure you don’t give the buyer clues that will lead them to believe that they can get a better price.
In addition, when quoting a price to a customer, never leave the price "all alone". Always bundle the price with the other services you offer. For example: "The price of the file cabinet is $175.00, and that includes free delivery and set-up."
There are numerous tactics a potential buyer might use to gain a better deal for their company. Recognising those tactics is foremost in overcoming objections. The most common buyer tactics are listed in the box. However, there do exist some effective counter-tactics so don’t despair! Negotiation is a skill that can be developed. Of course, there are some people who are more naturally talented in their negotiation abilities. However, most of us can use a little guidance to become more effective. Even those natural negotiators can improve by applying a few of the tactics and techniques listed below.
You need to practice and prepare of course. Are you really ready? When a buyer throws out an objection it can sometimes cause the salesperson to freeze up and not think clearly. To ensure that this doesn’t happen to you, make a list of all the objections you hear on a regular basis. Take time to prepare intelligent responses for each one. And the next time you hear an objection you will be more relaxed and be able to deal with it properly.
Slow down! Buyers know that salespeople are often overeager to make a sale and they use that to gain an advantage in the negotiation. As a seller, slow down and take time to understand the buyer’s position completely before attempting to negotiate. Ask questions to find out why they asking for a particular concession? What is motivating or driving them to ask for better pricing? Do they have a quote from someone else? Do they have budget restrictions? Maybe they want a lesser quality product? You won’t know unless you start digging in and asking questions.
Put aside the issues that polarise you from your potential buyer and discuss the magnetising issues. Sometimes the big issues are easier to handle when the small issues are settled.
Feel out your buyer too. Here’s how it works: "I understand how you feel about that issue, others felt the same way until they found out how much time and trouble our service saved them." Refer to other customers. Utilise referrals and testimonials as a credibility tool for your product or service.
Agreements and promises must be put in writing – this holds true during every stage of negotiation. The written word helps prevent disagreements, forgetfulness and nibbling at the end of the sales process.
It’s also much more pertinent if you can get to the decision-makers. Make certain that the person with whom you are negotiating has the power to make the final decision. Ask them to explain how the decision will be made or if they are prepared to move forward today if we resolve these issues?
Never give a concession without getting a concession. Sometimes it makes sense to give a concession to a buyer. However, if you give a concession without getting one in return, the buyer will become programmed to believe that everything is easily negotiable. You may also damage the trust relationship that you have with that buyer. The buyer will wonder why you didn’t give them the best deal up front? As a seller some logical concessions might be asking for a larger quantity, or longer commitment from the buyer. Maybe you can suggest a different product offering or unbundled services.
Another good one is to ask for new business in an area that the buyer is not supporting your company. The bottom-line is that you want to program the buyer so that they expect to give concession when they ask for one.
Buyers and sellers know that negotiating is part of business. But what happens when a buyer does not want to negotiate and uses a stall? Let’s investigate the following example:
Buyer: "I would like to think about it. Give me a call later."
The sale could die at this point if the salesperson accepts the buyer’s stall tactic. You, the salesperson, must be prepared for any objections that your potential customer might have. Let’s take another look at the stall tactic from a top performer’s perspective:
Buyer: "I would like to think about it. Give me a call later."
Top performer: "I apologise. Obviously I left something out of my presentation that is stopping you from making a decision, do you mind telling me what it is-
The top performer in the second example prepared – before the meeting – for possible objections and took a detour miles before the buyer attempted to squelch the presentation. The top performer heard the buyer’s objection ("I would like to think about it"), and responded with an appropriate counter-tactic ("I apologise…I left something out").
There is not one aspect of the selling process that is easier than another aspect. Prospecting requires research and patience. Uncovering hidden needs requires asking the right questions and listening. Presenting solutions requires creating a viable solution based on what the potential buyer told you (and based on what you understood). And negotiating requires a salesperson to pool all of his/her selling skills and provide intelligent responses to a potential customer’s objections.
Remember that excellent objection handling and negotiation techniques do not make up for poor selling skills. You can’t win the sale through negotiating if you didn’t do an effective job in the other parts of the sales process. You are your biggest asset when you reach the negotiating table!