Successful Negotiations: Why it’s Critical Not to Lose Sight of the Big Picture
“Are we negotiating?”.....“Always.” That succinct bit of dialogue from the 1997 movie “The Devil’s Advocate” serves as a good reminder for sales professionals to heed when selling to prospects or existing accounts.
Don’t take for granted that it is a mere formality or confined to the period leading up to inking an agreement. You are constantly negotiating and should not only realise this, but practise their approach.
Negotiating is certainly about prices and fees, but also about so much more. What’s negotiable? Pretty much any aspect of a sale can be negotiated from delivery date, warranty, and payment or service terms to product features, account team, and the like. What’s important to realise is that each bit of dialogue and revelation throughout the sale process enlightens both seller and buyer alike with information that will influence this deal – or the next.
It’s the tail end of the contract building process, but as the quote above suggests, negotiating really starts at the beginning of the relationship and continues long after the deal is done. Off-hand comments, questions, and observations made by your clients can cue what they’re thinking about when the time comes to re-up. How you approach them can either shore up or undermine the chances for future success.
Ingredients of Successful Negotiations
When negotiating, keep these points in mind to avoid derailing while strengthening your relationship:
- End-game. Have a clear image of the end. What do you want to achieve as a result of the sale? What does a successful agreement look like for you? For your buyer?
- Dialogue. Negotiating is an art that requires a delicate but effective touch. Realise that even when the deal’s done and the ink has dried that further negotiations are happening. The trick is to keep a checklist of variables and factors that could change or impact the deal, but don’t waive it in your client’s face at every opportunity. This gets old fast and makes you seem like you’re constantly keeping score and not focused on the big picture. Rather, focus on a fluid dialogue that recognises variables and addresses them more naturally between contracts and more directly when negotiating an agreement. All dialogue should happen in a friendly, relationship-building manner.
- Flexibility. You don’t want your sales professionals to be pushovers, so you must train them where they need to stand fast and where they have wiggle room. Always maintain some area of flexibility and manoeuverability. If you’re completely inflexible, then your buyer might assume that you’re not even making an effort to meet their needs or requests.
What Not To Do: Successful Negotiations Do Not Look Like This
There are several things that you should not do when negotiating in order to avoid torpedoing the deal and thus your relationship. Here are a few examples:
- Don’t be adversarial or combative or try to get one over on them. If you’re adversarial in negotiating, you risk blowing up the deal and relationship. That’s akin to winning the battle but losing the war.
- While you don’t want to be unfair to your clients, you also can’t go back to your boss and say that you’ve given away the store. Your company is in business to make a profit, which is not unreasonable. Don’t allow your desire to please your client undermine your ability to be effective.
- Don’t weigh deals down with goods or services that are unwanted or needed. This “bloatware” will go unused, will be unappreciated, and cause the buyer to feel like they overpaid for the value they received. If something is truly necessary, then make sure that the end users know what it is, why it is important, and how to leverage it. Otherwise, they’ll be skeptical and resent it making future sales or renegotiations difficult for you.
The Ultimate Goal: Create Value and Build Trust
Both parties in a negotiation have priorities: the buyer to receive something of value for a reasonable price, the seller to deliver services or goods for a reasonable profit. The key elements in this exchange are value and trust. If either is missing, called into question, or obviously deficient, then closing the deal becomes more difficult (and could cause the relationship to falter).
Encourage your sales reps to structure deals in a manner that highlights the value that you will bring to your buyers and the trust you hope to instill in them by delivering as per the terms of the agreement.
At the end of the day, your goal should be for the long-term success of the relationship you’ve developed and cultivated. If your mindset is focused on a transactional sale, then your goals and motives are one-sided and clearly not in the interest of your buyer. Sellers with a lock on the market might be able to get away with that for a time, but as soon as a viable alternative appears, what respect have you shown by taking advantage of them?
Negotiate for the sake of the relationship, not the deal, and both parties will win.
Get industry insights and stay up to date, subscribe to our newsletter.
Joining our community gives you access to weekly thought leadership to help guide your planning for a training initiative, inform your sales strategy, and most importantly, improve your team's performance.