5 Negotiation Mistakes to Avoid

Author: 
Mike Schultz, President, RAIN Group

Negotiation is everywhere: in selling, setting salaries, getting the labor union back to the table, figuring out where to go out to dinner...even getting your kids to go to bed.

Since negotiation is everywhere, so is negotiation advice. Harvard professor Steven Pinker once said, “Much of the advice from parenting experts is flapdoodle.”

We feel the same about sales negotiation advice. Not only is it flapdoodle, but also often directly the opposite of what a seller should do.

A lot of “experts” and those who believe themselves well-versed in negotiations take the liberty of sharing all kinds of recommendations for succeeding in sales negotiations.

What should you not do in a negotiation?

Here are five of the most common bad pieces of sales negotiation advice we hear:

1. Let the buyer make the first offer.

Research shows that final negotiated prices correlate more closely with who establishes the price range. If the buyer goes first and offers a low range, the price may be lower than what could have been achieved.

Instead, sellers should go first with price. This will anchor the price and qualify the buyer.

2. Keep emotions out of negotiations.

This sounds right on its face, but it implies sellers should completely dismiss the role of emotions in negotiation in favor of cool logic and analytics.

When sellers take emotion out of negotiation, they miss a huge opportunity to connect with and influence buyers.

Sellers should not react emotionally and rashly in the heat of the moment, but instead inspire and manage the emotions of the buyer throughout the sales process.

When buyers feel connected, engaged, respected, and valued, sellers achieve the best negotiated outcomes.

3. Always use a win-win approach.

Sellers with an exclusively win-win approach who come in contact with hard-nosed negotiators may find themselves vulnerable to negotiation tactics.

Always try to focus the conversation on creating value but realize when that isn’t possible. When it’s not, or when the other party is simply trying to maximize their interest at your expense, shift your approach so you don’t get taken to the cleaners.

4. Always get what you can.

Sellers who take the mindset of maximizing what they can get at the expense of the buyer create mistrust and lose the opportunity to collaborate.

Always try to get the best outcome that puts you in a position to get repeat business and more referrals. Maximizing personal gain in the form of maximum prices and wringing out every last concession is often not the path to a successful negotiation or long-term relationship.

5. Always hold your ground on price.

When sellers blindly hold fast to their original price, they often miss the opportunity to find out why a price objection was raised in the first place.

It’s appropriate for prices to shift if the shifting corresponds with changes in scope and deliverables of a particular sale. Sometimes it’s appropriate to change prices to beat a competitor. The key is to find out what’s behind the price objection and respond appropriately.

Avoid these sales mistakes and you should succeed in your sales negotiations. For every negotiation you encounter, you’ll find at least 10 different pieces of advice telling you 10 different ways to handle the situation.

But guess what? Negotiation advice isn’t universal, and some is flat-out wrong. Apply the wrong advice to your sales negotiations and you’ll drive down margins, slow the sales process and lose deals you could have won.

Mike Schultz is a bestselling author of “Rainmaking Conversations” and “Insight Selling,” director of the RAIN Group Center for Sales Research, and president of RAIN Group, a global sales training and performance improvement company. Follow Mike on Twitter or connect with him on LinkedIn.