Before you close a sale, you’ll have to sit tight through the negotiation phase. In sales, negotiation is one of the real tests of whether your company can work in the long term with another company.
But how do you ensure the negotiations will bring in the business your aiming for? Here are six ways to make negotiations go more smoothly.
Set a schedule
Whether you need a series of meetings, or just one specific meeting, schedule it as soon as the opportunity arises. Nobody has time to waste in business. So you’ll find that the company you want to work with should be receptive to the idea of scheduling time for negotiations. If there is some resistance, don’t be afraid to ask what is holding them back.
Ask lots of questions, and then listen
One of the major mistakes people in sales make is not understanding the prospective client’s needs. If you don’t get all the information you can before negotiations start, then tricky questions on their side wont get the answers from you that will seal the deal. So before you even get to the negotiating table ask as many questions about what the prospective client wants from your product or service.
Be flexible
Sure you want to close a deal with the best outcome for your business, but don’t push so hard for concessions you scare away the prospect. Doing business is a reciprocal arrangement. You’re helping them out with a (hopefully) superior offering, they’re keeping your business going by buying that offering. Any reputable business looks for a win win scenario. This ensures a long lasting business relationship where both parties gain something worthwhile.
Know your bottom price
Everyone likes to get a good deal, but you need to know what your permitted bottom price is before walking into negotiations. The difference between knowing your bottom price and not knowing is the confidence it gives you. If you don’t know where you draw the line, that insecurity could jeopardise the deal. It also prevents you from making a deal based on a price your company cannot make a profit from.
Know your extras
When making a deal you’ll have some extras up your sleeve to sweeten the deal. Don’t go for gimmicky extras, they have to be real and add a sense of worth to the deal. These can be lower prices over a certain volume of orders, or a particular after sales service that companies normally pay for. Don’t forget to highlight how great your normal standard of customer service is. Sometimes what seems like normal to you can seal a deal – the customer may not be used to your high level of customer care.
Don’t be afraid to walk away
Of course the deal is important, but is it really worth it if you have to concede too much? Remember your bottom price? That’s the number where you are still making a reasonable profit from the deal. If the other company demands so many concessions that you exceed your bottom line, the deal isn’t good for your business. At every stage during a sales process you should be asking yourself whether the deal is worth pursuing.
Negotiating in a sales environment shouldn’t be daunting. Your job is to find a happy middle ground where both you and the customer walk away happy with the deal you’ve struck.