When you work in sales, developing your negotiation skills and strategies is, well, non-negotiable. If you want to win more deals, you need to approach every sales negotiation knowing how to prepare and what a win-win outcome should look like.
In this article, we’ll introduce you to some key sales negotiation training techniques, useful skills and commonly used strategies and tools you can use to improve the sales negotiation process. We’ll also share sales tips and advice from negotiation experts that you can share with your team.
What is a sales negotiation?
A sales negotiation is a strategic discussion (or series of discussions) between buyer and seller that ideally leads to a deal being closed. The main goal of the negotiation process is to reach an agreement that’s acceptable to everyone.
In most sales negotiations:
- Buyers and sellers communicate what they need and where they may be able or willing to make concessions
- Compromise is often required to reach an agreement
- Most compromises involve price or contract terms and conditions
Sales negotiations can be a one-time event—after you’ve quoted a price or sent a contract through to your prospect, for example—or they can occur at multiple points in your sales process.
Some sales experts consider negotiating to be an ongoing strategic process that begins with lead generation and lead qualification, continues through the nurturing of those leads down your pipeline, and ends with negotiating and signing a deal.
How long should a sales negotiation take?
There’s no hard and fast rule for how long a sales negotiation should take. Depending on what you sell, how you sell it and your industry or market, it could involve a single conversation (in a retail store setting, for example) or many discussions over multiple days.
If the negotiation is part of a formal RFP (request for proposal) process, it might unfold in one large-scale meeting over the course of a day. The timeframe for navigating a contract bidding process, meanwhile, may look very different from closing a real estate deal.
In his YouTube video series, international sales trainer Victor Antonio says you should expect it to take longer to close a sales deal when:
- The order volume is large
- The price or perceived risk is high
- There are more people involved in the buying decision
In the next section, we’ll examine some key skills that will help you successfully navigate most types of sales negotiations, no matter how long they take.
Key sales negotiation skills
Serious buyers usually come to the negotiating table armed with knowledge, research and certain expectations. While it’s not always easy to predict the outcome of your discussion going in, the more sales and negotiation skills you have, the more comfortable and adaptable you’ll be.
Research from RAIN Group suggests that top-performing sales negotiators aren’t just three times more likely to achieve their pricing target, they’re 13 times more likely to be very satisfied with the negotiated outcome.
Here’s a list of key skills that will help you perform better as a sales negotiator, without being a pushy salesperson.
Go in prepared
Before you negotiate, figure out what your prospect is most likely to want and what you’re in a position to offer.
For example, try to nail down:
- Why your prospect needs what you’re selling (the specific benefits it’s going to provide)
- How badly they need it (the likely financial and emotional costs attached to not buying)
- Their budget and purchasing role (how their buying process works, who the decision-makers are and whether they’ll be present)
Sometimes, new and unexpected decision-makers are introduced late into the negotiation process. Here’s a video on how to deal with that eventuality.
Make sure you also understand your sales numbers and company requirements so you can decide in advance about any price or condition concessions you’ll be willing to offer or accept.
Be a good listener
Being a good listener goes well beyond just hearing your customer’s words. Sometimes when a sales prospect brings up the topic of price, for example, what they’re really saying is, “I have concerns.”
By letting your prospect initiate the conversation, and listening carefully before you ask questions, you may pick up on cues that the real reason they’re in negotiations is because they’re:
- Concerned your product or service won’t live up to expectations
- Worried your company won’t meet their needs long-term
- Uncomfortable with the idea of justifying or taking responsibility for their buying decision
We’ll look at how to handle objections like these in a moment. The point to remember here is that you can’t take steps to alleviate your prospect’s concerns and arrive at a win-win sales outcome if you don’t know what they are.
Learn to handle objections
There are plenty of tips online for dealing with rejection as a sales professional. One big key to handling objections during a sales negotiation, however, is learning to be a problem solver.
While it’s smart to go in prepared with a lower-priced option that meets your prospect’s needs, you should always be on the lookout for opportunities to build value around your original offering instead.
- First, drill down to what your buyer’s objections really are
- Then, make it clear you’re there to cooperate
- Finally, brainstorm with your buyer to find ways in which your original offering addresses and overcomes their doubts
Most sales objections exist because they interfere with the buyer’s objectives. Try steering the negotiation toward ways you and your prospect can meet those objectives together.
Keep your emotions in check
It’s not uncommon for an inexperienced or unskilled negotiator to watch their sales discussion deteriorate into argument. You not only stand to lose the sale when that happens, you may lose the client altogether—and any opportunity to create a mutually beneficial long-term partnership.
No matter the mood of the prospect sitting across from you, do your best to stay calm and grounded and to keep the conversation as light and friendly as possible.
Know when to walk away
Don’t be afraid to walk away from a deal that won’t progress despite your best efforts to reach an agreement.
If you’re trying to decide whether a prospect really values your offering, here are three signs that the person you’re negotiating with may be a tire kicker who’s never going to buy from you, or a difficult prospect who’s all too likely to become a dissatisfied client:
- They make unreasonable or unprofitable demands
- They have needs that can’t be met under your most lenient terms and conditions
- They show no interest in collaborating or reaching a compromise
In the case of some situational sales negotiations, such as the final bullet point above, letting the other party know you’re willing to walk away is enough to earn their cooperation. And if not, it may keep you from getting stuck in an unhappy sales relationship.
As you practice these skills, make sure you’re always working to build relationships, identify buyer needs and offer solutions as part of the negotiation framework.
Most sales managers will agree that, rather than a “winner takes all” situation, a successful sales negotiation is one where both parties leave the table satisfied and looking ahead.
Sales negotiation training techniques for your team
With top-performing sales negotiators more than nine times as likely to receive extremely effective negotiation training (again, according to RAIN Group), you may be wondering how you can train your sales team to advance their negotiation skills.
One of the best ways to improve results in any sales organization is through a strategic, structured training program.
Take some time to think about how you can make the negotiation techniques outlined below part of a program that:
- Takes advantage of e-learning, online seminars and role play
- Uses a buddy or mentoring system to practice and share knowledge
- Includes regular, one-on-one feedback sessions
It’s wise to keep in-house sessions short and field practice long during your sales negotiation skills training. And don’t forget to praise and acknowledge your sales reps’ performance as it improves.
How low can they go?
To understand how low they can or should go when making concessions during a sales negotiation, your team needs to thoroughly understand their costs and pricing parameters. CRM pipeline sales metrics and other data are especially helpful for this.
Show your reps how to access and utilize information about their:
Knowing what each deal means from a time, cost and profit perspective will give your team a solid foundation to negotiate from.
Identifying the decision-makers
You can help your team achieve greater success by equipping them to find a company’s decision-makers early in the sales process.
According to Gartner, the typical buying group for a complex B2B solution involves between six and 10 decision-makers. So encourage your reps to save any serious deal-making negotiations for those who have the final say.
Training to build trust
Once your team knows how to find the right information and who they should be presenting it to, training them to build trust during a negotiation is essential.
Whether they’re meeting remotely or in person, body language, listening skills and the manner in which questions are framed says a lot about their empathy for a prospect’s problem or pain.
The more confidence a company has in your sales rep as a partner in their purchasing decision, the easier they’ll be to negotiate with.
Recognizing negotiation tactics
Some buyers approach every sales discussion with positional negotiation tactics at the ready. Coach your team to recognize and respond to strategies where prospects take a rigid, single-minded stance on getting more for less.
In our State of Sales Report 2019-2020, we discovered that having the soft skills required to be a good negotiator (such as listening for what prospects actually want) make sales professionals feel more successful.
However, it’s not enough to just deliver outstanding. Without both systematic learning and reinforcement measures in place, some 75% of what we’re taught is forgotten within 48 hours.
With that in mind, let’s look at some sales negotiation strategies every sales professional can start learning and practicing today.
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.
The tools you need to be a great sales negotiator
You need more than skills and strategies to be a great sales negotiator, you also need the right tools. Specifically, you need tools designed to help you create value in all your sales activities and deal negotiations.
Designed to keep you selling, CRM software like Pipedrive makes it easy to manage your leads, deals and negotiations with a visual, customizable pipeline.
With Pipedrive, you can:
- Track the value, win probability and expected close date of deals through your sales pipeline stages
- Create unlimited custom fields to collect and organize sales data around your teams, products or industry
- Build a customizable catalog of company products, including costs and notes, to aid in your sales negotiations
Your product data can be linked to your deals, which in turn can be linked to specific clients or contacts.
Since some sales negotiations take time to unfold, and you may have multiple negotiations on the go, tracking your communications is vital.
Communication tools you should consider a “must” include:
- An unlimited database for your contacts and organizations
- A scheduler, activity calendar and timelines for your contact activity history
- Callers that log and record downloadable call files
You can gather tools like these independently, or access them all as built-in Pipedrive features.
Pipedrive’s email integration even lets you manage sales conversations from your preferred inbox and link them automatically to your contacts or the deals you’re negotiating.
Sales document creation and management
A large part of the sales negotiation process involves creating, sending and filling in documents, such as contracts, proposals and quotes.
This can be a time-consuming process, especially if you send out many different proposals a week, or have to manage changes and amends from different stakeholders.
With a document management tool like Pipedrive’s Smart Docs, you can create templates, save them for future use and add fields to your documents that pull in data from your CRM.
If you’re sending out similar proposals to many different prospects, all you have to do is update the details on the same template—not to mention the fact that the fields already in your CRM will be added automatically.
You can also see when a hot prospect engages with your sales document, so you know when to get in touch to close the deal.
Now that you’ve got the tools you need to win more deals, let’s find out what some of the experts have to say about improving your sales negotiations.
Sales negotiation tips from the experts
According to Calum Coburn, CEO of the Negotiation Experts, before you start dealing you need to make sure you’re selling to the right customers. One reason sales professionals struggle to close deals is because they’re not getting to the real decision-makers.
Before you sit down to negotiate, Coburn suggests asking pointed but diplomatic questions like “Aside from you, who else are the decision-makers?” or “Every company’s different. How does your company make a decision like this?”
Create mutual value
Coburn’s company also stands behind the concept of creating mutual value in your negotiations.
Using skills that develop a collaborative framework for working with prospects will help you achieve more in your sales conversations—a sentiment echoed by author Ludovic Tendron in his book The Master Key: Unlock Your Influence & Succeed in Negotiation.
According to Tendron, “If you want to reach an agreement, move from a competitive mindset to a cooperative one.”
Speak like a partner
Preparing to negotiate from a partnership perspective is a key piece of advice offered by negotiator Chris Voss.
Healthy salesperson-customer relationships are based on mutual trust and respect. And keeping negotiations on an equal footing sets the right tone for a win-win association going forward.
With that in mind, how you phrase your sales conversations is important.
For example, Voss explains in his book that “The word ‘I’ gets people’s guard up. When you say ‘I’, it says you’re more interested in yourself than the other person, and it makes you take personal responsibility for the words that follow—and the offense they might cause.”
With his FBI background, Voss understands better than most people the importance of negotiating with empathy.
As he puts it, “[Empathy] is not about being nice or agreeing with the other side. It’s about understanding them. Empathy helps us learn the position the enemy is in, why their actions make sense (to them), and what might move them. As negotiators we use empathy because it works.”
The takeaway from all these tips and advice? Roy J. Lewicki sums things up nicely in his book Negotiation: “People make their decisions based on what the facts mean to them, not on the facts themselves.”
Without improving your sales negotiation skills and strategies, you could be investing a lot of time and effort in sales activities that never seem to translate into winning more deals.
Closing the deal is arguably the most important stage in your sales process. And learning what to expect, how to prepare and the most effective ways to conduct yourself during a sales negotiation will help you close more of them.
So where should you go from here?
If you’re a sales professional looking to become a better negotiator, you might consider:
- Reading some of the books linked in this article
- Reaching out to your sales community to find a mentor
- Asking your manager about additional sales negotiation skills training
If you’re a sales manager, meanwhile, next steps might include establishing a benchmark to help you gauge your sales reps’ current skills and successes, tracking down some expert learning resources or consulting with a specialized sales negotiation training company.