Historically, negotiation was seen as a confrontational, nasty game left to politicians and greasy car dealers. However, sales representatives can enter into win-win, interest-based deals where you do not have to give in but you also do not have to resort to combative techniques.
Here is how to set yourself at an advantage and close any deal:
Qualifying your prospects
“It’s too expensive,” “Your competitors are selling at a much lower price,” “I don’t have that kind of budget.” Sales representatives often face these common price concerns. Overcoming price objections is arguably the most difficult aspect of the negotiation process. One way to maneuver price objections is to focus less on selling the product and more on selling the solution. In a sense, successful negotiation is less about the hard sell and more about fully understanding your client’s needs. This requires you to inquire about their pain-points, goals, dreams, wants and values to help you understand how the client perceives their issue. Having solid facts about your client puts you at an advantage because you are able to persuade them that your offer will solve their problems once and for all.
Leveraging the power of emotion
There is a reason why car dealers are incredibly effective at persuasion—they simply know how to pull on a customer’s heartstrings. Traditional wisdom dictates that the process of sales should never be tainted by emotions. However, Lee Miller, author of UP: Influence, Power and the U Perspective—The Art of Getting What You Want, affirms that negotiations always happen within emotional contexts. The most successful salespeople understand the role of emotion and anticipate the customer’s emotional tactics even before they start the negotiation process. For example, say a customer responds to your counter-offer with anger, instead of responding with anger or giving in to their emotional ploys, you could use their annoyance to show them what they have to lose if they walk away from the deal. A salesperson who does not understand the contextual role of emotions will likely not tolerate an overly emotional customer, thereby losing the deal or closing too low.
Asking for more
In negotiation, you need to have as large of a maneuvering berth as possible. One way to enlarge your negotiation space is asking for more than you actually require. This technique gives you the advantage of negotiating downwards in a way that will make your opponent feel as though you have offered them a good deal. For example, say your target price for a central vacuum cleaner is $1000; for starters, you could offer the shopper a higher price of about $2000, giving yourself a wiggle room of $1000. Surprisingly, sometimes when you ask for more, you just might get it.
The best alternative to a negotiated agreement
As a salesperson, you need to have the power to walk away at the right time. But, walking away from a deal requires that you understand yours and your client’s best alternative to a negotiated agreement (BATNA). This simply means weighing in on the risks and rewards of not making a deal against the backdrop of other possible alternatives. So for example, say you know that your competitors are selling their central vacuum systems at a lower price than you are and there is a possibility that your potential customer could find you too expensive and opt for the competitor. Your customer would have a good reason not to close the deal and to walk away if you do not offer a conducive price point. On the other hand, if you know that you are offering the best price on the market and what your customer is offering is too low, your best alternative to a negotiated agreement is to simply walk away and negotiate with a customer at a larger budget.
Banal as it may seem, arming yourself with as much information about your opponent is your best bet to placing yourself at an advantage and winning at any negotiation. Also, don’t be afraid to deal with emotions; master negotiators know how to play along with psychological tactics of their opponents.