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Principles & Strategies for Modern Sales Negotiations

Too often, we think of selling and sales negotiations as two separate ends of a timeline. In truth, they exist together on a spectrum. Every moment of selling involves some amount of negotiating. Therefore, every conversation places another brick in the road toward closing a sale. Effective sellers keep this in mind by shaping the customer’s perception of value. Keeping this approach in the context of the customer’s needs and priorities creates negotiations that are mutually beneficial rather than an exercise of blunt force. The result is a handshake — not an arm wrestle.

How Consultative Sales Negotiations Are Different

A consultative sales approach to negotiating seeks to understand the deeper needs of the customer as the finish line comes more clearly into view. This collaborative engagement rises above the adversarial dynamic that many associate with the word “negotiation.” However, being consultative doesn’t mean relinquishing ground. In fact, consultative negotiators understand how to control a negotiation and arrive at a mutually-beneficial outcome. They win by carrying out these strategies:

  • Strengthening relationships
  • Emphasising the value that they’ve created
  • Applying current research on how people make decisions
  • Transforming an adversarial mindset to one of collaboration
  • Guiding the negotiation to a mutually successful result
  • Increasing trust and growing the potential for future business

Executing these sales negotiation strategies is more difficult than ever. Pricing pressures, competition, and technology all create challenges. That’s why sellers need a consistent set of practices that form a path to the sale. The power of such a framework is its applicability across various negotiations and customers.

Effective Sales Negotiations Principles

Consultative negotiating serves four key objectives: increasing deal size, reducing discounting, improving win/loss ratios, and realising greater value. How do effective, skilled sales negotiators keep their goals? By following the principles below:

  1. Use preparation to prime: Priming is the basic principle of prompting a person to think a certain way. Influencing a customer’s decisions begins with the first conversation. Effective priming helps customers change their mindset from “someone is trying to sell me something” to “this solution can get me to where I need to go.” Priming is trust building. The seller is helping the customer become comfortable with sharing information from their side of the table.
  2. Lead by opening:  Effective opening starts by recapping common ground. This negotiation strategy helps reassert the relationship while ensuring that the seller is up-to-date on all relevant information. The seller is setting the stage for the crucial next step: being the first to position the offer.
  3. Control by converting demands to needs: Once the seller has made the offer, it is important to adhere to the negotiation principle of controlling, or protecting, the position. In many cases, a seller, upon hearing a request for a lower price, will protect their pricing by suggesting a reduced solution. However, this strategy doesn’t represent control. Protecting the seller’s position means maintaining the scope of work and the pricing. Many negotiators move to trading too soon without a full sense of customer demands, needs, and priorities. As a result, they do not have a fully informed trading strategy and, after offering a trade, may witness the customer coming back to nibble for more.
  4. Trade to protect: Effective trading is a key negotiation tactic meant to protect essentials without unilateral concessions that leave money on the table. Sellers make this work by first understanding how trading is different from concessions.
  5. Seek commitment to close: When sellers move to close, they must start by reinforcing perceptions of value. Summarise what the customer gains, then check that the terms match the customer’s understanding. This is a crucial part of the conversation because maintaining momentum is what brings the deal to a close.
  6. Act to solidify: The seller must reinforce trust and credibility, even when sales negotiations are complete.

Consultative sales negotiations are not just about the give-and-take of terms. They are also about how the equitable exchange of information builds relationships. With a collaborative approach, sellers gain more information, allowing them to satisfy the customer’s needs without “thinning the deal.”

Employing effective sales negotiation principles and strategies, like those above, pays dividends. By placing equal focus on deal outcomes, relationships, and trust, a seller can close the deal they want to close while forming a foundation for future business. Mutually beneficial outcomes can only be reached when both sides take the time to understand needs rather than simply issue demand. The path to the sale is in the customer’s words. Keep listening.

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