Negotiating a B2B Sale? Be Proactive versus Reactive

Author: 
Andres Lares, Shapiro Negotiations Institute

A sales negotiation is a process, not an event. Events are reactive; they require you to think nimbly on your feet. Effective sales negotiations, however, are fundamentally proactive. While you must still be able to think on your feet, it is the planning and anticipating of various outcomes that will improve your odds of success. Establishing a process that works for you will allow you to plan ahead, which will not only help to maximize your results, but also your ability to repeat that high-level of performance.   
 
B2B sales are typically more complex than B2C. Consumer transactions are relatively straightforward. Product Z is yours for X price. You are selling to the end user and the purchase price is often small enough that there isn’t a formal decision-making process. But B2B selling is more nuanced. It’s complicated, involving multiple layers of stakeholders in the organization, often with unique priorities and desires.  
 
That’s why proactivity is essential. Taking the time to understand the landscape and key buyers can help illuminate unmet needs and gaps. It starts with a single question:

What should my B2B sales process look like?

It shouldn’t be complicated. Simplicity is critical when it comes to engineering something you can recreate effortlessly again and again. That’s why our ideal B2B sales processes draw on our Three P’s – prepare, probe and propose.
 
Preparation – Study the target business and consider how the process may unfold.

What’s basic value proposition can you offer? Remember, value goes beyond a product or service if it saves time, improves efficiency, or checks another important box for their business. And do your best to tailor the value proposition to each potential client. Your service or product may not change depending on who you are speaking to, but how it is valuable to each potential client can and often does.

Although this transaction is business-to-business, there is still a human element. Some tips to understand your counterpart include reviewing their LinkedIn profile, maintaining notes from previous conversations, or searching for media stories. The goal is to identify their point of view before entering negotiations.

Probe – Focus on deep discovery to uncover goals from your negotiation counterpart.

Ask questions. Gather insights by being direct. Ask plainly: “What is most important to you?” This will illuminate their interests before you advance, ensuring you’re both on the same page. Be careful to avoid leading questions (e.g., “We know growth is a priority, is that important to you?”) or starting at a granular level before seeing the bigger picture. Also, try to avoid making assumptions – as Albert Einstein said, “Assumptions are made, and most assumptions are wrong.”

From there you’ll be able to prioritize their interests (and yours). Think of it as an opportunity to uncover interests, issues, and insights that will fuel how you propose options to move the deal forward, rather than jumping directly to assumption-based solutions. At this stage you are not trying to problem solve, just ask questions, listen, understand, and build a relationship.

Propose – Deliver a proposal with confidence using insights gained from preparation and probing.

This part of the negotiation will be straightforward if you’ve followed the process. Keep in mind that “nothing convinces like conviction,” so be prepared and communicate confidently. Quick Tip: Consider scripting for your meetings – a strong opening, key points you’d like to make, answer to likely objectives, and how you’d like to close the meeting. Try it at your next meeting, you will be surprised by how much more comfortable and confident you feel and in turn how much more effective you are.
 
But does it really work in the real world?

Theory is great, but real-world B2B negotiations can spiral in many directions when you attempt to apply what you’ve learned. Remember, there’s no single path to closing a deal, but having a strategy in mind can help you anticipate, navigate, and let you know where you stand.

Here is one example: “I have a tight budget,” or “I don’t have it in the budget.”

When in a sale or a negotiation, you may receive a deflecting response like this. It’s important to not see this as an immediate refusal. Remember that on average, sales people hear no three to 10 times before yes. Keep the negotiation alive by probing further: “Hypothetically, if you had the budget, is this something you would pursue?” You’ll want to uncover whether it truly is a matter of finance or if there’s a separate, underlying barrier. If so, alternative routes can be explored to find an agreement by reverting to other probing questions, such as, “In an ideal world what would you like to accomplish?” Or, “Have you ever not had enough in the budget to move forward with an initiative you were interested in and still found a way to make it work?”

The biggest impact you can make as a sales manager is to ensure your reps have a defined sales and/or negotiation process, support them with resources, and keep them positive through encouragement. Equipping them with a process like the Three P’s will give them a foundation to learn and improve their sales. After all, who wouldn’t want a B2B salesperson who is well prepared, ask questions, listens to the other party, and then matches their solutions to the potential client’s needs?

Andres Lares is the managing partner of Shapiro Negotiations Institute (SNI). He also has a focus in developing new initiatives such as interactive online training and virtual reality based negotiation simulations, and teaches one of the top-rated classes at Johns Hopkins University on sports negotiation.