Negotiations can be tough, even if you’ve been doing them for years. Sweaty palms, racing thoughts, and an overwhelming sense of dread can come with the territory.
But for Sanket Shah, enterprise account executive, it’s just another day at the office. Shah has been in the sales industry for a decade and has learned a few things about how to handle difficult prospects during a negotiation.
Sales Negotiation Tips
#1: Take Control and Be Prepared
There’s a very good reason 36% of sales reps report closing as the most difficult step in the sales process. After all, negotiation is the one point in the sales process that determines the fruit of your efforts over several days of nurturing your prospect.
Whatever the scenario, a successful sales negotiation involves a mix of the same elements—preparation, enough knowledge of the value of your product, empathy, managing emotions, and a willingness to listen.
It helps to have a sales negotiation checklist to help you prepare, including questions like:
- What is the value of my product to my prospect?
- What does my prospect want out of this negotiation?
- What do I want out of this negotiation?
- What are my strengths and weaknesses in this negotiation?
- What is my BATNA (Best Alternative to a Negotiated Agreement)?
- What is my prospect’s BATNA?
- What is my walk-away point?
#2: Keep Your Options Open
Having alternatives in place when you can’t reach an agreement can be incredibly helpful.
In addition to knowing your BATNA, you’ll also want an idea of your Zone of Possible Agreement (ZOPA). That’s the overlap between the lowest amount you’re willing to accept and the highest amount your prospect is willing to pay. You’ll know you’ve found the right deal when it falls within the ZOPA.
#3: Consider How You Communicate
Finally, show confidence in your product and in yourself. Study up on your prospect and use that knowledge to personalize your negotiation style. Empathy and body language can also help you build trust and understanding between you and your prospect.
By following these tips, you’ll be able to navigate sales negotiations with ease, even when the going gets tough.
Sales Negotiation Scenarios and How to Manage Them
#1 Your Prospect Requests a Lower Quote
As mentioned in these tips for sales negotiations, it’s always best to have your Best Alternative to a Negotiated Agreement (BATNA) at hand. However, BATNA is only a last resort and there are still a few solutions you can try before resorting to it.
One of the most common rebuttals to a price objection is to emphasize the features and benefits of your product and demonstrate the expected ROI from the purchase. This helps your prospect gauge your product’s value and acknowledge their need for it.
Another possible solution is to offer alternative solutions that fit within the lower quote requested.
Note that this isn’t necessarily the same as BATNA because the alternative solution mentioned in this context refers to a more affordable plan or a smaller package, as opposed to the full-service plan, whereas BATNA refers to offering the full-service plan at a cheaper rate.
Offering alternative solutions instead leaves an opportunity for upsells and cross-sells further down the road.
#2 Your Prospect Points Out a Better Price From a Competitor
This is a common customer negotiation tactic that most AEs have seen a hundred times. Your prospect points out a cheaper quote from a competitor and uses it against you in the hopes of a lower quote.
The best strategic rebuttal is comparing the value of your product versus that of your competitor.
Competitive objections too, like price objections, can be rebutted with the help of value-based selling principles, in which you take on a consultative role to provide value to the customer and help them determine their purchase decision based on the product’s value.
#3 Your Prospect Threatens to Walk Out of The Negotiation
Things may escalate and your prospect might threaten to walk out of the negotiation. They may be adamant in their request for a better price.
The initial protocol when a prospect threatens to walk out or choose a competitor would be engaging them in more conversation. Try to understand what is causing them to seek their BATNA or to walk out.
In addition to value-based selling, other options that can be explored to fix such a situation include:
- Extending the contract term
- Including other services to existing terms
- Leaving out a warranty or service arrangement
- Restructuring payment terms
It’s imperative to note that if all your solutions including your BATNA fail, you should always be willing to walk out as well. This mindset levels out the playing field and removes the leverage the buyer has over you.
Just like a buyer has alternative sellers, you have alternative buyers. In fact, being willing to walk out is the #1 strategy separating most top-performing sales negotiators from the rest.
