How to Help your Team Improve their Negotiation Skill?
Salespeople come face-to-face with customers of different personalities daily. Some are straight shooters who love appearing confident, while others request discounts to get the cheapest deal. Therefore, a Sales Manager’s job is to train their team on how to negotiate successfully.
As much as salespeople want to break free from negotiations, it remains a vital part of the sales process. After all, it takes you one step closer to the deal. Are your sales team too scared of going into the negotiation room? Was their first attempt a flop that they’ve vowed never to step foot in there anymore? Too bad, because good negotiation skill helps add more zeros to the company’s revenue.
Before getting into the details of effective negotiation strategies you can teach to your sales team, allow me to lay out a few things starting with:
What is Sales Negotiation?
Sales negotiation is the act of using information, power, and time pressure to structure effective communication that helps you gain the favor of people from whom you want something in return.
While this might be a broad definition, you will realize that we have to negotiate through every walk of life to get what we want: request a raise at work, lease an office or make your spouse pick up the kids from school.
Why is Sales Negotiation Important?
Despite not being a requirement when hiring a sales rep, it’s a way of telling clients you will give them something in exchange for their money. Most of the time, clients have a perceived value that clashes with the monetary value of your product and service.
It’s therefore down to your negotiation skill to reach agreements that satisfy both parties and help you go from a “No” to a “Yes” reply.
To be a good negotiator or even teach it to anyone, you need to understand that every negotiation requires 3 core elements:
3 Core Elements of Every Negotiated Agreement
According to Herb Cohen, Author of “You can negotiate anything,” there are 3 elements constant in every sales negotiation:
Negotiation starts with the perception of power. Power is when a client makes a “Take it or leave it offer”. He feels you won’t get a bigger deal elsewhere, or you might lose him to your competitors who are willing to offer him less.
Every salesperson needs to be taught how to escape this trap. After All, they yield the most significant power by virtue of their expertise, industry knowledge, skill, credibility, options, and time.
The time pressure falls on the sales rep, except the client’s business needs an urgent fix. The sales rep is understandably the one under a tight deadline to close the deal, and only he knows the length of the sales cycle.
Knowledge affects your ability to negotiate. What do you know about the client? You should know enough to write a full-page report on them if you want to. Provided your team did their research, they should have every detail about the prospect’s career, current position, options, funding history, struggles, and pain points they keeps them tossing in their bed at night.
And what does the prospect know about the rep in return? He knows that they’re under a deadline, and he’s not. He knows they have a quota to meet and believes they’re in desperate need of his money, which he can read from their body language – assuming the rep is desperately looking to close their first deal.
As you can see, all three factors: time, information, and power are important for a win-win situation. Most sales reps fail to realize that all three factors play to their advantage, provided they play their cards well. Too bad they don’t know it. This makes it the sales manager’s job to open their eyes to these possibilities.
With that said, here are some tricks you can teach your sales reps to improve their success rate:
How to Properly Train your Sales Team to Become Better Negotiators
#1. Separate Needs from Emotion
“Never get angry. Never make a threat. Reason with people” Some wise words from Don Corleone, the Godfather, on the part of negotiating. But should salespeople always reason with the prospect? Not all the time. Sales reps need to learn how to separate the prospect from their emotion and problems.
For instance, if a client asks for a 15% discount (and your company offers 10%), and cites an excuse of being bootstrapped, taking the deal means letting them get into your head.
Sales reps need to avoid getting wrapped up in the person’s shoes; instead, focus on the value of what you’re providing, and never go below your lowest price margin.
#2. Be Far Prepared than the Prospect
Regardless of your negotiating style, sales reps must do their findings, have solid facts, and know the customer inside out. There’s often an imbalance of information in every sales negotiation, and the one with more facts yields stronger power.
The best a client will know about a salesperson is that they earn a salary, a commission, a deadline, and a quota he has to meet. For the salesman, they should know every detail down to the option the client might be considering.
#3. Listen Carefully, Even if It Isn’t Going Your Way
Salespeople come to the negotiation room with a frame. And, once clients ask a question outside their frame, they become unsettled and fumble. The problem? Such reps believe negotiations should be scripted, which should be the reverse.
Like every sales process, negotiations are more of communication with a result. The more you know about the prospect, the stronger your position. Objections during negotiation help you understand the prospect’s interest and why they’re asking for a discount; which could be because your competitors charge less, or their budget could be the restraining power. You will never know if you do all the talking without active listening.
#4. Avoid Desperation With a Fallback Situation
Sales organizations set non-realistic expectations for their sales teams, creating desperation during negotiation. The sales rep sees every deal as a must-close and is too scared to walk away.
The solution? Teach your reps how to picture a fallback position. With a fallback position, your sales reps start to think: If I don’t close this deal, what next? What’s the worst that can happen? For most reps, it’s as simple as moving to the next lead in the pipeline.
After all, continuing with a deal where the client’s proposal is unprofitable will only cause problems within the sales team. However, suppose your sales reps fail to imagine this when negotiation breaks down. In that case, they will begin to pin their future on the possibility of the deal falling through, putting them in a desperate position that the client can read from their body language.
#5. Schedule Role Play
Most sales reps believe role play is harder than actual sales. Possibly. But here’s the good part: during the role play, you can offer sales reps feedback on body language, what they’re getting wrong and what to correct during negotiations.
It’s a chance to access their performance closely before sending them to the negotiation room. The bottom line: If a rep can hold their ground during role-playing situations, there’s a possibility of excelling during the actual sales.
Fortunately, you can schedule a role play with your team members on SalesDeck. This helps you address your team’s lapses in negotiation, and you can have them implement all the strategies listed here while creating a comfortable environment ( something role plays are hardly known for)
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