Selling can be intensely frustrating with objections flying in from all different angles. For instance, when you’re inches away from sealing a deal, the prospect can ask for more time to think things over. Or some potential customers can ask for huge discounts that eat into the value of the sale.
If you’ve ever been in this position, you know how stressful it can be. Mastering negotiation skills can help you sail smoothly through these aggravating situations. This article goes over three critical negotiation skills that can give reps an edge when closing deals.
Patience combined with active listening
Reps often face the temptation of hurriedly closing deals. When the prospect broaches the subject of price, they may quickly jump in with a discount in the hope of swaying them to make a fast decision without listening to what is most valuable to the potential customer.
Top sales programs say the danger of this lightning-fast approach is that the prospect is likely to accept the discount but continue to bargain for further concessions they care about, such as better payment terms.
So, it pays for your reps to slow down and master the art of patiently guiding customers while actively listening to their needs. This helps them to better understand the prospects and offer solutions that bring them closer to accepting the proposition.
Active listening also gives reps the opportunity to draw as much value as possible through:
- upselling
- cross-selling
- asking for referrals
One of the best ways for reps to master the art of active listening is through training with a focus on role-play and simulations. In these sessions, reps can gain practical experience in key skills such as:
- asking open-ended questions
- actively listening without cutting in
- taking slight pauses to ensure the prospect has nothing more to add
- recapping to see if you’re on the same wavelength as the prospect
- maintaining a body posture and expression that show you’re paying attention
By actively listening, you can also learn more about other alternatives that the prospect is pursuing. Once you know who else is chasing the prospect, you can clearly show how your products or services meet their needs better than what your competition has to offer.
At the intersection of patience and active listening, your team can deliver value propositions that lead to more closes.
Anchoring the offer
Knowing how to make the first offer is especially important during negotiations. Negotiation program experts say that the first offer gives rise to a psychological anchor to this figure. This is because people often instinctively fixate on discussing the number presented to them.
As a result, the first number on the table is typically the yardstick the following price negotiations will be measured against. Oftentimes, the outcome of the discussion does not fall far from the original anchor.
Here are some crucial factors to consider when setting an effective anchor.
Don’t go too low
Inexperienced reps may try to push sales by selling as low as they possibly can. To preserve the value of your sale, it helps to avoid anchoring too close to the lower band of a price range. Otherwise, you risk the price falling below the bottom of the range during negotiations.
Selling Brew Playbook also says that it’s beneficial for managers to set a clear target price within the range. That way, reps can negotiate with the end goal in mind so they stay as close to the desired price as possible.
Aim high–but not overboard
A high anchor offer gives more wiggle room. You can draw back from your initial price and still be within your desired range all while asking for concessions in return. That’s a win on all fronts.
You can also reap the benefits that come with the perception of high value. People often perceive high-priced products to be better than those with lower prices.
However, it’s important to strike a balance. If you start your offer too high, you could scare off the potential customer.
Avoid splitting the difference
If the buyer beats you to an offer, it helps to avoid the impulse to split the difference as this could cost you. Say, you’re selling a product for $2000. The prospect offers $1400. Splitting the difference would bring the price to $1700. This means you’ve lost potential income of $300.
With more haggling, the buyer may still push you to split your split. As a result, the last number could land at $1550, shaving off $450 from your desired price.
Instead, it’s helpful for reps to learn how to counter an anchor. For example, you can deflect from the subject of price until you drill down on value. You can also tactfully ignore the first offer and throw in your own to reset the anchor.
Knowing when to call it quits
Sometimes, even with the best negotiation skills, things may not go according to plan. The prospect may make unreasonable demands and simply not be willing to get with the program.
So, when the negotiations hit a brick wall, it can be helpful for reps to walk away to avoid throwing more time and financial resources down the drain. In addition, many customers will not allow reps to walk and will simply continue talking in the face of the threat to end the conversation. This can be used to the rep’s tactical advantage to gain a concession.
However, walking away may not always be the best option. There are occasions when both sides need to simply take a breather from the discussions. This allows a mental reset and shift in perspective that can give reps time to find common ground and come up with a win-win deal. So, it’s important to weigh the situation to make the right decision about which way to go.
It can help reps to take workshops and learning programs that teach how to spot the difference between pointless endeavors and conversations where there’s still a glimmer of hope. It may also be necessary to seek an external point of view from the manager to weigh in on whether it’s time to drop the deal or take a temporary step back.
Training helps reps to avoid rushing out the door and to manage their emotions when choosing to walk away. It also helps reps to master how to drop the pursuit of a deal without burning bridges. Leaving room for future conversations can open the door to rekindling discussions when the prospect has had more time to think.
With these critical negotiation skills, sales reps can close more deals and catapult the growth of your business.