The pressure to discount and cave into price pressure has never been higher.
In today’s highly-competitive business world, sales people sometimes forget that closing a deal also means making enough money on that sale to make it worthwhile for their company.
Many of the business executives I speak to and work with in my sales training company express frustration with how quickly sales people offer discounts or make concessions that cost the company money and erode already thin profit margins.
Here are seven strategies that can help your team negotiate more effectively and close more sales at higher profits.
1. Ask more questions early in the sales process
The more information you have the better you can position your offering. The more insight you have about your prospect’s current situation and/or circumstances, the more effectively you can demonstrate how your product will help them.
The key is to ask high-value, thought-provoking questions. Avoid questions that could be answered by a quick browse of their website or by talking to someone in your network.
Your goal is to make the other person think. You want to ask questions that you competitor is afraid to pose. Your questions should also position you as an expert or solution provider rather than “just another salesperson.”
2. Plan your approach
I’m not suggesting that you need to invest hours preparing for your meeting but you do need to think about a few things beforehand. This includes anticipating what demands or concessions the other person may make, how you will respond and the best way to present the value of your offering.
You should also plan what questions you will ask during your sales call and what potential objections your prospect might express.
3. Learn to say, “Let me think about that.”
Too many sales people agree to a concession without thinking about the implication of that decision. Decisions that are made without proper thought — often in the heat of the moment — cost you money. Taking the time to think about the implications can save you money and add valuable profit dollars to your bottom line.
4. Keep a full pipeline.
It can be extremely difficult to walk away from a potential deal when you only have a few leads on the horizon. And that gives your prospect a tremendous amount of leverage that smart buyers will immediately use to work out a better deal for themselves or their company.
Sales people who maintain a full pipeline of qualified prospects feel significantly less pressure to close a less-than-satisfactory deal because they always know they have someone else to sell to.
5. Learn to recognize negotiating tactics.
This is one of the most important aspects of being able to negotiate more effectively. When you recognize tactics such as; The Nibble, The Red Herring, Good Cop Bad Cop, The Vise, and The Flinch you can respond in an appropriate manner.
For example, an unprepared sales person will usually offer a discount when their prospect flinches at their price. And that’s what a flinch is intended to do. However, giving a discount is not the best way to respond. Instead, you need to stand your ground and remain completely silent.
That brings us to our next strategy…
6. Become comfortable with silence.
Silence is either a sales person’s best friend or worst enemy.
Let’s face it, silence can be unnerving and sophisticated buyers and decision makers know this. That means we need to learn how to sit quietly if a prospect is being unreasonable or we are not exactly sure what to say after the other person has just finished answering a question.
Just like any other skill, learning how to negotiate more effectively requires ongoing practice. Some of the concepts and approaches are very uncomfortable at first. When you practice you learn the nuances of certain tactics and discover how to make them work for your own personality.
One of the most effective ways to practice is when you make purchases as a consumer or for your business. I once worked with a top sales performer who negotiated and haggled every single time he made a purchase. He told me that this not only saved him a lot of money but that it gave him more confidence when he was negotiating with his customers and prospects.
During a negotiating skills workshop I was conducting I learned that one participant had more than seventeen years of negotiating experience. When I asked why he was attending my program he said, “I can always learn something new or get a reminder of something I need to start doing again.”
When you develop the ability to negotiate with confidence, you earn more respect than sales people who cave into price pressure. Plus, you will close more sales at higher profits which means you will make more money. And, isn’t that a great feeling?
© MMXII Kelley Robertson, All rights reserved.
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Kelley helps people master their sales conversations so they can win more business and increase their sales. He does this by conducting sales training workshops and delivering keynote speeches at conferences, sales meetings and other events. Book Kelley to speak at your event: 905-633-7750 or Kelley@RobertsonTrainingGroup.com.