Caution! Should you Negotiate?

Sales Negotiating – “Caution! Should you Negotiate?”

Working with hundreds of clients over the years, it has become apparent that when we’re asked to help them improve their negotiating skills, it is often a symptom of a larger problem: salespeople not properly executing a sales process (a systematic, repeatable series of outcomes that removes variation from execution and ensures a salesperson’s time is focused executing the right behaviors, on the right opportunities, at the right time; based on data, not emotions).

Granted, there is a need for salespeople to have effective negotiation skills, as many times it’s simply part of the customer’s buying process.

However, for many sales organizations, there are a significant number of negotiations they never should have entered in the first place, as they are not likely to obtain a positive outcome.

There are 3 steps you can take today to ensure you’re negotiating the right opportunities:  

First, if the customer is a good fit for your organization they will have an appreciation for your brand, value add services, as well as the unique characteristics of your product or service; price will be less of an issue.

  • Ensure your salespeople are focusing their time and resources on opportunities that are a good fit for your organization.
  •  “Is there agreement within your sales organization as to what makes for a good fit?”

Second, most sales organizations do not systematically disengage from poor opportunities (most companies have a 25% closing rate, i.e. they lose 75% of the time).

  • Ensure your salespeople have clear criteria when they should make the informed decision to disengage from a marginal opportunity; don’t waste time negotiating on opportunities you should have walked away from.
  • “Can your entire sales team articulate and execute your ‘walk away’ criteria?”

Third, discuss the reason for every negotiation. Is the client not a good fit? Did they not recognize the value your solution brings? Were you invited, or allowed to quote, just to drive the price down from the competitor they already plan to buy from?

  • Treat every negotiation as a Caution Sign; it doesn’t mean to stop the sale, just use caution before proceeding.
  • “Does your sales organization always understand the reason for the negotiation and proceed with caution?”

Apply these 3 rules and you will increase the effectiveness of your sales organizations’ negotiating effectiveness.

I know my posts often do not follow conventional sales training practices. I welcome your comments, thoughts and ideas!