Securing the best deal: The crucial difference between negotiation and sales
Selling and negotiating are both important skills, but not all sales situations require negotiations and not all negotiation situations are sales-related.
We are regularly asked by sales managers to provide negotiation skills training for their salespeople.
However, after talking with them about their team’s situation and development priorities, 90% of the time it is quite clear their people do not need negotiation skills training — what they really need is consultative solution selling skills training instead.
The reason many sales managers and sales teams find themselves in this situation is they think every time their salespeople hit an objection they must negotiate. Far from it.
The easiest way to eliminate objections is by taking the time to understand your client’s needs and priorities first, and then showing them how you can help address their situation and what the pathway forward with you looks like.
If the client is working with you and happy to proceed, there should be no need for negotiations.
We must not confuse prioritising client project tasks and activities with negotiating either. Prioritising is what happens first, second and so on.
Selling and negotiating are both important skills to master. However, not all sales situations require negotiations and not all negotiation situations are sales-related.
What we do need to know is how they are applied in the correct situations.
How to know if you’re selling
- Identify clients’ real needs and priorities, discuss, create and agree upon viable solutions that are of value to the client and outweigh the cost of purchase.
- Gain mutual agreement to move forward to close the deal and do the work.
- Ask and answer questions about misunderstandings, processes, product or service questions, general questions, risk mitigation, the benefits, and so on.
- Can’t vary the terms. If you can’t vary terms and the client won’t agree to move forward with you on the current plan then it is a ‘no sale’. Move on rather than give things away. Giving something away for nothing is not negotiating, it is giving something of value away which costs you and your business. If you give something away for nothing, it’s worth nothing.
How to know if you’re negotiating
- Need to trade off something.
- Need to respond to demands for concession by analysing the situation and the demands being placed on you, then by developing a proposal with clear guidelines and trade-offs.
- Need to stop a customer from ‘fragmenting’ your proposal and diminishing the real value and losing relevance.
- Present a total proposal that ‘adds up’ to a win-win solution where all trade-offs are clear and agreed to.
- Present a fall-back trade-off position (if necessary).
- Find that both parties vary the terms and you need to negotiate new terms to get common ground and agreement.
- Find that resources are scarce.
- Find that agreement and conflict exit simultaneously.
Key guidelines for negotiation in sales
- Unless you have the power or authority to change or modify terms, create new product solutions you cannot negotiate.
- Negotiation should never be a substitute for selling. Selling well is the priority.
- Negotiation is an effective strategic tool that you use only when you need it.
- The earlier you give away concessions in the sales process the less impact they will have.
- Be mindful of giving salespeople the authority to discount. All too often this is a licence to give away your margins too soon and too often. We see this when people ‘cave in’ on price too soon for fear having to deal with potential conflict, which usually doesn’t eventuate if the sale is done effectively. However, they never let the sale run its course to find out.
- Discounting is a negotiation tool that should only be applied as a last resort and should have a trade-off in it for your business so can you benefit from the deal as well. This is different from volume pricing which rewards people for buying bulk from you.
- If you postpone tough negotiations whenever possible, you will miss learning about new things, getting new ideas, new ways of pulling your offer together as well as creating potential conflict down the track.
No negotiating skills training and talent can make up for poor selling skills.
Remember everybody lives by selling something.
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