Common sales negotiation strategies
Best practices in sales negotiation strategies include both arming yourself with workable options for reaching a mutual agreement and maintaining a flexible approach.
For example, while many sales pros recommend making the first offer during a negotiation to anchor the discussion in your favor, using this tactic might depend on where you are in the sales process.
If your prospect has requested the meeting to negotiate the terms of a contract or sales proposal you’ve already presented, letting them speak first provides an ideal opportunity to investigate their concerns (see “being a good listener” in the sales negotiation skills section).
A word about price strategies
Many sales negotiation strategies revolve around price. But that doesn’t mean you should immediately assume budget is your buyer’s biggest concern.
If you do determine that offering a sales discount is the right way to go, try to avoid:
- Suggesting a discount range. No buyer will opt for 10% off when 10-15% has been placed on the negotiating table.
- Jumping straight to splitting the difference. Immediately meeting your prospect halfway on price deprives you of important wiggle room.
You should also remember that while offering your prospect a discount might help push the sale, it can also cause them to undervalue your product.
Other techniques to manage sales deals that may work equally well to price reductions in the right situation include:
- Providing more favorable payment terms
- Ramping up your customer’s buying commitment in stages to generate trust
- Offering a similar, but repackaged option as an alternative
Here are three more common sales negotiation strategies you can practice, along with their pros and cons.
1. Emphasize what your prospect stands to lose
Loss aversion is the idea that losses usually make a much bigger psychological impact on us than gains of the same size do. During negotiations, try framing your sales offering as an opportunity to avoid losing revenue, credibility or competitive ground, rather than as a chance to save money, improve their reputation or gain a competitive edge.
Pro: Your sales pitch is more likely to result in a deal when you emphasize the downside of not signing.
Con: Take care that prospects familiar with cognitive biases like loss aversion don’t feel you’re trying to manipulate them.
2. Mirror your prospect to foster cooperation
According to former FBI hostage negotiator Chris Voss’ book Never Split the Difference: Negotiating as if Your Life Depended on It, a good first step to getting better at negotiating is getting comfortable with mirroring.
Subtly mimicking a prospect’s speech or physical gestures has been shown to build rapport and empathy during the selling process and help negotiating parties find common ground.
Pro: Mirroring encourages buyer and seller to reach similar conclusions.
Con: It may feel (and look) contrived without practice.
3. Use independent standards to bridge gaps in price, terms or conditions
Much like an impartial referee, introducing independent, unbiased information standards like past contracts, industry benchmarks and credible third-party references into your sales negotiation can help you bridge large agreement gaps in a way that feels fair to everyone.
Pro: Independent negotiation standards are an effective way to objectively support the details of your offering.
Con: Don’t make the mistake of using these as a tool for pointing out errors in your customer’s thinking.
Speaking of tools, let’s take a brief look at some must-have gear that will support your performance as a sales negotiator.