I plead guilty to enjoying a cold beer or two, and I’ve watched with amazement as the decade-long bull market in the craft beer industry shows no signs of abating.
If you’re engaged in the sales process, then you’d better be using effective negotiation strategies for every qualified lead – from discovery until the final agreement. If you wait until it’s time to close the deal, you may fall way short of your goals and your chances of building a long-term client relationship will quickly fade away.
Ask the right questions in discovery
As a sales professional, you recognize the importance of knowing the prospect. But the challenge is to understand the issues from the customer’s perspective. So be curious, from the moment the discovery process begins. Learn all you can about the person’s (or group’s) goals, intentions, motivation, limits, areas of flexibility and other relevant factors. Ask these types of questions:
Listen - and summarize
When your prospect speaks – responding to your questions, explaining fact or opinion or ranting about a pet peeve – pay close attention so you don’t miss anything. Then, at points during the conversation, summarize the individual’s point of view back to him or her out loud to ensure that there are no misunderstandings. This may also help you uncover some hidden agendas or recognize that they’re ready to close.
By employing these strategic negotiation skills in discovery process, you’ll gain a richer appreciation of what’s important to those on the other side, including what motivates them and how to satisfy their most critical needs. Everything you learn during discovery with the customer sets the stage for a productive negotiation process, which should include these steps:
Steps to effective negotiation - and better outcomes
Prepare – Define your objectives develop wish and concession lists, while anticipating which items will be on the prospect’s lists.
Argue – Rehearse your opening statements, ask questions and listen to the answers (as you did in discovery) and exchange additional information.
Signal – Be alert to the prospect’s verbal and non-verbal signals, which may reveal true needs that you didn’t pick up in previous conversations.
Propose – Begin trading with the prospect with the goal of securing specific and realistic items of greater value to you (e.g. favorable contract terms, price, non-monetary items, delivery or implementation) while conceding items of lesser value.
Package – Give those on the other side what they want – on your terms – and shape your proposal based on the uncovered needs.
Bargain – Always set a price for the prospect’s demands. Put conditions before offers with this type of statement: “If you agree to sign a three-year contract, then we’ll reduce prices another 5%.”
Close – Consider trial closing with a question such as, “Are you saying that if I agree to free service and delivery for the first three months, you’ll sign a two-year contract?” This will encourage the prospect to reveal up any hidden issues and, hopefully, allow you to bring the negotiation to a conclusion.
Agree – Clear up any ambiguities, and confirm that terms of the agreement are acceptable and can be implemented by both parties.
Linking negotiation boosts sales $7 million
One major apparel manufacturer, drawing on what was learned in the discovery process with a retailer, effectively linked sales and negotiation by getting its account management team to create robust wish and concession lists. At the top of the team’s wish list was a means for retail outlets to support the company brand—critical for long-term success. Once the deal was made, the manufacturer was able to capitalize on the stepped-up retail support and devise new strategies that boosted sales $7 million in just months.
Integrate negotiation so both parties win
I win, you lose. That should not be the goal of your negotiations. When you’re able to connect with your trading partner, both sides get what’s important to each, like a favorable contract, flexibility in deliverables and more revenues. And you’re on your way to building a meaningful long-term relationship.
Marty Finkle, CPT, CEO of the Parsippany-based Scotwork North America, is a renowned industry expert who leads the team of negotiators who serve more than 100 companies in various industries. He is one of fewer than 1,000 Certified Performance Technologists worldwide. Reach him at email@example.com.