Sales negotiation can be a nerve-wracking process. Without the right knowledge or tools at your disposal, getting to the best agreement can be elusive.
In this podcast, RAIN Group's President Mike Schultz discusses how to overcome your fears, gain confidence, and leave behind some common misconceptions about sales negotiation.
If you're new to sales negotiation and worried you'll never get the hang of it, there's good news: almost anyone can learn to be good at it. Studies show that sellers' comfort increases dramatically "after about 800 hours of negotiating or essentially half a full year of business," Mike says. It just takes practice.
You have to practice the right way, however, because practice doesn't make perfect, it makes permanent. You have to first know what the best negotiators do.
Seasoned pros recognize that the world will not end if they don't win the sale. Mike explains that "if your life is all wrapped up in whether or not you get this particular sale, and if you fear the loss of the sale, you're at a tremendous disadvantage." As you learn to be comfortable walking away, you'll find yourself in a much better negotiating position.
Mike then goes on to clear up some misconceptions about the best practices of sales negotiation. For example, it is often said that the seller should ask for the budget. In negotiation terms, this is, in essence, asking the buyer to make the first offer. Research shows that as often as 85% of the time, final negotiated prices correlate more closely with who went first.1 If the buyer goes first with a reasonably low price, the final price will end up being low—that is, lower than if the seller had gone first with a reasonably high price.
The second misconception is that a win-win outlook will benefit all negotiations. In many situations it is, but if the buyer's intent is to take advantage of you and only get the best agreement for themselves, you have to protect your interests. While you may be seeking the win-win, they will be using tactics to manipulate you.
Listen to the podcast now for Mike's advice on how to approach sales negotiation, counter some of the most common manipulative tactics buyers may throw at you, as well as how to manage emotions in a negotiation to get to the best outcome:
For more, check out our infographic on the 18 manipulative tactics buyers use in sales negotiations.
1. Adam D. Galinsky and Thomas Mussweiler, "First Offers As Anchors: The Role of Perspective-Taking and Negotiator Focus," Journal of Personality and Social Psychology 81, no. 4 (2001): 657-669.