Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
Many sellers do not recognize their role as negotiators. This is a big mistake because selling is negotiating. It is critical for sales professionals to know how to negotiate—it directly affects how much money they earn. Sellers who know how to negotiate maintain higher margins, increase personal and corporate profitability, are better performers, earn higher commissions, and are more successful in general.
Sales-Side Negotiation Rules
If a seller understands fundamental rules of negotiation and follows simple guidelines, it will help alleviate many of the stresses associated with negotiating. Strategic negotiators utilize three primary negotiation rules:
- Sell First. Negotiate Second
- Ask Questions
- Focus on Solutions
Sell First. Negotiate Second
The most common negotiation mistake sellers make is negotiating too soon. Sellers who are not proficient or who are not confident in their selling abilities often start negotiating at the beginning of the sale by offering discounts. They do this to initiate interest or compensate for poor selling skills. Discounting becomes a substitute for selling. Negotiating early in the sale is a mistake for multiple reasons:
It detracts from the purpose of selling—building value.
It lessens the impact of the negotiated concession.
It sets a precedent and encourages buyers to negotiate additional concessions.
Negotiations inherently focus on price, not value. By negotiating early in the sale, sellers distract buyers from focusing on solutions and benefits. Don’t distract buyers by introducing negotiation issues early in the sales process.
Many negotiation experts believe asking questions is not just one of the most important negotiation skills, but THE most important negotiation skill. The seller’s most important job is to uncover buyer problems to solve. Once buyers have a clear picture of the seriousness of their problems, and how a seller’s goods or services resolve the problems, they associate value with the proposal.
Questions also divulge critical account information and equip sellers with the data needed to negotiate. Very often, when negotiations reach what is referred to as a deadlock, asking effective questions is the only way out. Remember that negotiation is an art of persuasion. Persuading a counterpart to a mutually beneficial agreement is the purpose of negotiation. People are persuaded much more by effective questions than they are by statements.
Focus on Solutions
Focusing on solutions seems like an obvious negotiation skill, but it isn’t. In fact, my negotiation experience has been that focusing on solutions isn’t as simple as it sounds. Why? Sellers are easily distracted. They are thrown off course by prospects who are focused on limitations and problems rather than solutions. In sales-related negotiations, seller strength flows from focusing on ways to benefit customers. By zeroing in on solutions and benefits, sellers keep limitations off the table, and value on the table.
For more in-depth negotiation tips and strategies