This week’s blog posts have focused on a few strategies you can use to improve your sales negotiating. There are dozens of strategies, techniques and tactics that can influence your results so I struggled with one last concept to discuss.
After serious consideration I decided to focus on one aspect of negotiating (and sales) that many people find challenging to effectively execute.
Silence
Many sales people—myself included—find dead air or silence during a sales conversation a difficult concept to manage. I know that I feel extremely uncomfortable when a period of silence engulfs a sales conversation.
However, silence is a very powerful weapon when you are negotiating.
It takes discipline. It requires effort. And it takes concentration.
Yet, when used properly, it can help you gain more leverage in a sales negotiation.
Here’s how you can use silence to negotiate a better deal.
Many prospects and customers are also uncomfortable with silence. If you pause for three to five seconds before responding to a comment or statement they made, the other person will often volunteer additional information that they have otherwise kept to themselves.
Here’s an example…
Several years ago my wife was speaking to someone who wanted to use one of my articles in their corporate newsletter. At one point during the telephone conversation, she sensed that he wanted to tell her something so she remained completely quiet. A moment later, he said, “But we only have a budget of $300…is that okay.”
At that time I often allowed companies to reprint my articles at no charge but the person who my wife was talking to was used to paying for them. Her five seconds of silence helped generate a small sale.
A friend of mine is an account manager for an advertising company and he told me of a situation when he was discussing the terms of an advertising campaign with a new prospect. His prospect asked if he could get a better price on the package and my friend remained silent as he considered his options.
After several seconds of complete silence his prospect said, “Well, if you can’t do that, it’s okay.” Since that day, my friend always pauses after a demand for a concession has been made. He figures this one action has saved him thousands of dollars.
When I worked the restaurant business (my first career) I used to interview people and a common tactic was called the pregnant pause. After someone responded to a question, I smiled and looked at them expectantly. In most cases, the candidate volunteered more information and in some cases, this information influenced my final decision to hire that person.
The easiest way to use this tactic in sales negotiation is to remain silent anytime someone asks you for a concession. In many situations, they will make a counter offer or retract their demand. And this means you can add money to your top line revenue and your bottom line profits.
It’s not easy. But the results are worth it.
**If you’re looking for more negotiating strategies read my free ebook, Fatal Negotiating Mistakes That Cost You Money. You can download it here.
Did you know? I conduct sales negotiation workshops. Contact me if you’re planning a sales meeting, conference or other sales event and need a high-energy presenter that can help your team get better results. 905-633-7750
One of the most powerful negotiating strategies you can employ is the ability to walk away from the bargaining table at any time.
Unfortunately, many sales people have a very difficult time doing this.
Sure, it’s easy to walk away when the sale is a small one or you haven’t invested much time in it.
On the other hand, it’s a completely different story when you have spent several hours (or more) talking to your prospect, creating a proposal, delivering a sales presentation and discussing the terms.
However, if you fail to keep your walk away power—at least mentally—you run the risk of making a concession that will cost you.
Yesterday, I discussed the importance of taking a time out to think during a sales negotiation. A time out can help you determine the next best step especially if you think the other person is negotiating too aggressively.
And combined with the ability to walk away, it can create tremendous leverage.
A number of years ago my wife and were looking for a new bed. We had visited several stores and I returned to one store after work one evening. My intent was to buy the bed so we could have it delivered by the weekend and finally get a good night’s sleep.
After a lengthy discussion with the sales person it didn’t appear that we were going to reach an agreement so I said, “Thanks, but no thanks” and I headed for the door. Dozens of thoughts raced through my mind including one that told me I was going to have to tell my wife that we weren’t getting a new bed after all.
I really did not want to leave without making that purchase.
As it turned out, I didn’t have to.
Before I could take three steps, the sales person blurted out another price that was considerably lower and it was enough to close the sale.
In every sales negotiation, both the seller and the buyer have the ability to walk away.
However, many sales people fail to realize that most sellers don’t want a prospective deal to fall flat, especially if THEY have invested a significant amount of time in the process.
Allow me to return to the bed purchase for a moment.
My wife and I had been looking for a new bed for several weeks. We had visited at least four or five stores. We were tired of sleeping on a mattress that creaked and groaned with every movement. I had no intentions of going home and telling my wife that we needed to keep looking so I planned to sit in my car for a few minutes before going back into the store and accepting the sales person’s last price.
But, my act of starting to walk away triggered the fear of losing the sale in the sales person’s mind and he quickly made another concession that he actually didn’t need to give.
Maintaining the mindset of being able to walk away from any sale, at any time, can give you a lot of leverage. I witnessed a sales conversation where the sales person stood up, extended her hand and said to her prospect, “I’d love to make this work but it doesn’t look like it’s going to happen. Thanks for the opportunity.” The prospect looked crestfallen and he quickly said, “No, wait. Let’s talk about this some more. I’m sure we can reach an agreement.” And they did.
Does this strategy work every time?
Absolutely not.
But you wouldn’t use it in every sales negotiation. However, it IS important to maintain this mental mindset during every sale because it can change the way you approach the negotiation.
Could your team use some helping improving their negotiation skills? Perhaps a sales training workshop on this topic would help. Give me a call and we can talk. 905-633-7750 or email me.
Ever close a sale and later realize that the deal you “thought” was a good one, wasn’t?
I’m going to step out on a limb and suggest that anyone who has been selling longer than a couple of years has experienced this. I know it’s happened to me (and I teach this stuff!).
It’s not that we intentionally planned to cut a skinny deal …we just didn’t think about the implication of our decision before we agreed to the concession.
Here’s one of the best strategies to keep in mind during your next sales negotiation…
Take time out to think.
In the heat of the moment, it’s easy to agree to a concession because on the surface it may sound like a minor one. However, in many cases, when we examine it later, we realize that that we ended up giving away more than we had anticipated.
And that usually gets ugly when we have to explain it to our boss, doesn’t it?
So, before you agree to ANY concession take a time out to think.
I’ll be the first to admit that I have been quick to make a concession that I later regretted. However, I now try to discuss all negotiations with my business partner and she generally gives me a different perspective or something else to consider that I hadn’t thought of. And I can say that it has made a difference in my results.
If you don’t have a business partner, colleague or other person to discuss the situation with at least take a few minutes to consider the implication and ramifications on your sales and your profitability. You can do this by saying, “Let me think about that and I’ll call you back in 30 minutes.”
Or, if you are in a face-to-face meeting and need to make a decision before you leave the prospect’s office, you can say, “I need a moment to think about that.” Then excuse yourself and step out of your prospect’s office to ponder your decision.
At the very least, say, “Let me think about that” and pull out a pad of paper or notebook and write the pros and cons of agreeing to that concession as well as what you can ask for in return.
A few moments of thinking time can save you lots of dough, potential embarrassment, and earn you more money. Plus, your prospect and/or customer will start viewing you as a savvy sales professional and even more effective negotiator.
Planning a sales conference or meeting this year? Would a negotiating skills workshop help you or your team get better results? Give me a call and we can discuss. 905-633-7750 of kelley@fearless-selling.ca
B2B, B2C, Negotiating, Retail, Sales Successtags: how to negotiate, how to sell, negotiating mistakes, negotiating sales, negotiating tactics, never accept the first offer, say no
Mar
14
A general rule of thumb when negotiating is to avoid saying yes too quickly. It’s sounds easy but the reality is that this can be a difficult tactic to apply.
The challenge here is that many sales people mistakenly think that they will automatically lose the sale if they don’t agree to the request or accept the offer. However, most buyers and decision makers know that negotiating is part of the deal-making process, especially if you dealing with a Driver who loves to win.
Saying yes too quickly will cause the other person to second-guess their approach. Here’s what I mean…
Several years ago I was helping my oldest daughter buy a used car and we made an offer that I felt was reasonable and that would save her some money. When the salesman went to discuss the offer with his boss (higher authority) I said to my daughter, “Watch, he’ll come back and say something to get us to bump up our offer.” When he returned, he stuck out his hand and said, “Congratulations, you have a car.”
The immediate thought that popped into my mind was, “Something’s wrong with the car” followed by “I didn’t ask for a big enough discount!” Even though I got exactly what I asked for, I wasn’t completely satisfied with the outcome.
Before you agree to the other person’s request or demand, you need to consider the ramifications of that decision. Many decisions are made without fully thinking of the impact that decision will have on our business.
Make people work for every concession. Take time out to think about their request. And don’t be afraid to make a counter offer. This can help you increase your sales AND your bottom line.
Here’s a brief video clip of a keynote speech I delivered on this topic:
[youtube]http://www.youtube.com/watch?v=v3c7Qn0xqmY[/youtube]
Negotiating the details of a sale can be a complex process and one that many sales people fail miserably at because they are not aware of key tactics that are commonly used by buyers and decision makers. Here are five negotiating tactics you need to watch for and the most effective way to respond to each one.
The Flinch. The flinch is a visible reaction to an offer or price and it is designed to make the other person feel uncomfortable about the offer they suggested. An effective flinch uses a combination of verbal language and non-verbal body gestures. A common flinch sounds something like this:
“You want how much?!? Wow! That’s expensive!”
While this exclamation is being expressed the buyer will demonstrate shock and surprise on their face and body language. I have seen sales people recoil from this tactic and immediately offer a discount or begin to justify their price. That is the intention of the buyer when they use this tactic.
A more effective way to respond is to remain calm and say nothing. Another response is to smile gently and say, “Compared to what?”
Higher Authority. Everyone who negotiates should have a higher authority and wise decision makers know that. Higher authority sounds like this:
“I’m going to have to check with my boss on that.”
Savvy sellers have a few options.
The first is to deal directly with the final decision maker whenever possible. If that isn’t possible, respond by appealing to their ego. “I understand the importance of checking with Mr. Big. Tell me, does he usually accept your recommendations?” Make sure to keep your tone of voice neutral and your body language non-confrontational.
Also, it’s important to recognize that higher authority may not be a person. Here’s what I mean.
A few years ago I was buying six dress shirts from a men’s fashion store. I used to work in men’s clothing so I know that there is a healthy mark-up on shirts so I asked the sales person, “What discount can you give me?” He rejected my request but I pursued it further and asked two or three more times. Eventually, he pointed to the computer and said, “Sir, I’d love to give you a discount but the computer won’t let me.” It wasn’t until I was driving home that I remembered that there is usually a manual method to input discount on computers.
Sellers should also this tactic before they agree to a concession by saying, “I’m not authorized to do that so let me check with my business partner and I’ll get back to you.” Before you leave the prospect’s office say, “I’m not sure that she will agree to that so just in case she doesn’t, what else can I suggest to her?” When executed properly, it catches the buyer off-guard and often causes them to make a reciprocal offer.
Good Cop, Bad Cop. Just as the name states, one buyer plays the role of the bad cop. This person will often show disgust or anger during negotiating process to put the seller on edge. At one point they usually leave the room and the other buyer will say in a friendly or soft tone, “George is really frustrated; I’ve never seen him like this. Is there anything you can do to help me with this?”
The Vise. This tactic is designed to bump up the offer and it starts with the buyer shaking her head and saying, “You’ll have to do better than that.”
Listen for those words!
When you hear them, this is what you need to say, “Exactly how much better do I have to do?”
Sometimes the prospect will give you a target but smart buyers will often respond with, “Well, better than what you have suggested.”
In those situations, you need to hold your ground and repeat, “Exactly how much better do I have to do?” It may sound like a broken record but it is often effective for gaining an idea of what concession the buyer is looking for.
The Red Herring. This is a tricky tactic that focuses the seller’s attention on a small, often insignificant issue. The prospect will make that issue seem extremely important by dwelling on it for an extended period of time. The reason it is effective is that it puts the seller on the defensive or in a position of weakness which causes them to quickly concede to other, more important or valuable concessions.
There are dozens of other tactics but when you learn to recognize and properly respond to these five negotiating tactics, you will begin to improve your results. However, a word of caution, I strongly suggest that you practise these with colleagues before you use them with a prospect. This will improve your delivery and bolster your confidence in an actual negotiation.
Unless you sell a low-priced commodity-type product, I suspect that you get push back on price from time-to-time. In fact, one of the most effective strategies buyers can use to influence a selling to offer a discount is the flinch.
A flinch is a visible reaction to an offer or price and it is intended to make the recipient feel uncomfortable. When used correctly, it often causes a seller to immediately offer a discount or concession of some nature. It puts sellers on the defensive and can cause them to think they will lose the sale if they don’t make a concession. Here are some examples of how it sounds:
“Wow! You guys are expensive!”
“That’s a lot of money!”
“You want how much?!”
Listen for statements or questions like these and don’t be put off or offended by them. Instead, respond to this tactic by:
1. Smiling and saying nothing or shrugging your shoulders.
2. Ignoring it.
3. Asking “Compared to what?” (this is one of my favourite ways to respond and I can tell you from first hand experience that it is very effective)
The key to handling a flinch is to resist the temptation to offer a discount or some other type of concession. Recognize it for what it is: a negotiating tactic. Above all, don’t be tricked into lowering your price when your decision maker flinches at your price.
