Making a sale today requires a different toolkit from a decade ago. The outbound sale has turned inward—people buy their vacuums at Amazon. Modern buyers do their research and knock on the doors they decide are worth knocking on. When one of those doors is yours, hooray! Your job is to close the sale. But—anxiety!—this is where the conversation turns into a negotiation.
As an inbound seller, learning how to negotiate like a champ will not only improve sales, it will build trust and respect for a long-term buyer/seller relationship. Your end goal is to create a win-win situation.
What are negotiating mistakes, and how to avoid them?
Here are the top five tried-and-true rules of negotiation that will help you sell the way your customers want to buy:
1. Gimmes and gets
Clearly define what things you are willing to give, and what you want in return. Know where you want to swing high, but set your minimums to avoid being blindsided.
The buyer will most likely ask you to work on the price tag. In lieu of whittled profits, expand the conversation beyond the price tag and create a contract both parties respect.
Your gimmes are discounts, freebies, and add-ons. Set your limits and stick to them. If you’re willing to take 30% off the intro price, don’t accept an ask for 50%. Can you offer a better price at a higher volume? Try offering 20% but throw in a valuable freebie or add extended support. Freebies could result in the purchase of more of that freebie later. Extended support feels good to the buyer and doesn’t cut into your margin too much. Remember, the contract must leave both the buyer and the seller feeling good about the negotiation.
Ask for something in return to build respect. A one-sided give-give-give situation leaves the seller feeling like the underdog. Your gets are things like higher volume, premium upgrades, extended contracts, and full price paid up front. If the prospect wants a concession, that’s your opportunity to build trust with a tradeoff. The buyer won’t feel like they’ve lost something but instead gained value. Added value creates a feeling of fairness.
2. Silence and patience
Don’t go first! Let the buyer go first.
If the prospect wants something, make her ask for it. Don’t feel the need to fill the air with an offer to hook the buyer. Maybe the buyer didn’t want a discount but, after it’s out there, they’ll take it.
Listen first. Find out how what you’re selling can help the buyer. Then respond with an appropriate tradeoff. Remember, people don’t want to buy your thing. They want your thing to solve their problems. So position your product or service to best solve their problem.
When the gimme and get is complete, draw up the contract. Don’t waste your time revising the items of the sale during the back and forth. It may be the case that the buyer will shoot down one part of your proposal only to accept it later because of a revision to the concessions. Be patient. When the deal is done, write it down. And not before.
Silence is golden, and patience is a virtue (in life and sales)!
3. Splits and ranges
You shut your mouth, and the buyer started the conversation. He asked for a discount. Prepared, you offer to take 10% to 15% off the sticker price.
No! Don’t do that!
Pick one number, not a range. The buyer only hears the higher amount. No one goes for the lower discount in a range. Stick to your guns with one figure and if you feel the need to throw the word “between” into the negotiation, kick yourself under the table.
The same goes for splitting the difference. This is not Kijiji! Meeting halfway doesn’t create respect, it cuts your margin by too much. The mutual benefit dies when you split the difference. Instead, offer the buyer something he considers high-value that won’t cut into your profit. If the buyer wants you to swallow the cost of support for the first year, don’t counter with free support for six months. Offer a reasonable discount on support, or extend support beyond the year by a few months. That's fair, and your contract won’t feel like it got kicked down the street.
Remember, the end goal is to arrive at a sale that pleases both the buyer and the seller. Give some things and get some things, so you both feel good about the deal at contract time.
Tell splits to split.
4. Once not twice
Negotiate with the right person. If you're not dealing with the decision-maker, you’ll have to negotiate all over again. Only next time, you'll start with the concessions you already made and renegotiation will create a better outcome for the buyer. That leaves you, the seller, feeling less than pumped—a big-time B2B negotiation mistake.
To get to the decision-maker, ask qualifying questions. “What is your budget?” “What is the deadline?” If you’re talking to the decision-maker, you’ll get answers. If not, encourage your first prospect to bring the decision-maker to the table.
5. Talk and walk
Don’t forget to keep your tone upbeat during the negotiation. When you reach an agreement and make the sale, you become partners with the buyer. So protect that relationship.
In the same way, if your gets aren't going to equal your gives, the sale won't make you happy. Keep it light but walk away. If you have to do something drastic to make the sale, you won’t trust the buyer in the future. Prevent a sour deal by respectfully closing that door.
And there you have it! A list of common negotiating mistakes, and a pocket full of tips to hone your negotiating skills, build trust with your buyer, and convert leads to mutually-beneficial sales.
Whether you’re an aggressive B2B seller ready to charge into negotiations or a timid solo entrepreneur who would rather talk to a plant than other people, you're prepared! Follow the rules of negotiation to avoid negotiation mistakes, seal the deal, and win the day.