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The Massive Difference of Being a Top Performing Sales Negotiator

blog author
Written by Mike Schultz
President, RAIN Group

As businesses shut down and stock markets plummet during this global crisis, buyers are more money conscious than ever. In most industries, sales are stalling. Buyers are cutting spend and pushing vendors for deep discounts. 

This is an unprecedented time. 

It's essential that sellers are the best they can be, and that includes in sales negotiation. In fact, every dollar preserved in a negotiation goes straight to your bottom line. How much of a difference can it make?

Consider our Top Performance in Sales Negotiation study. We studied 713 buyers and sellers and analyzed the data, grouping respondents into Top Performers and The Rest based on:

  • Achievement of pricing targets
  • Confidence participating in effective sales negotiation
  • Satisfaction with the outcome of the negotiation

We found that 1 in 5 of the respondents fell into the Top Performer group. Interestingly, Top Performers and The Rest reported that they participated in the same number of negotiations (20), but their ability to win deals and win them with the best possible agreement differed greatly. 

Average Number of Negotiations Per Year
Sales Won
Agreements Won Are "Best Possible" or "Close to Best Possible"
avg_negotiations_per_year sales_won best_possible_agreements

Top Performers are able to figure out how to get to the close and make sure it’s the best possible deal. 

The Top Performer Difference

What difference would it make if you had a team comprised of Top Performers in your organization? Let’s look at an example. 

Example Scenario
  • There are 100 sellers in your organization
  • Your average target price of a sale is $200,000*
  • Sellers participate in 20 negotiations on average per year (see graph above)
  • Sales won (see graph above):
    • Top Performer: 80%
    • The Rest: 50%
  • The average negotiated price achieved*
    • Top Performer: 97%, or $194,000
    • The Rest: 92%, or $184,000

*Average price achieved and the average target price is for illustration purposes only. 

Example Results
Given these numbers, your annual revenue across 100 sellers would be as follows:

  • Top Performers: $310,400,000
  • The Rest: $184,000,000

In this simple example, The Rest leaves $126,400,00 of higher margin on the table. This is the margin that goes directly to your bottom line. 

When you view negotiation through this lens, and consider that most sellers cave on price, there’s a strong case to be made to build a team of Top Performing Sales Negotiators.

Huge Gaps between Top Performers and The Rest

Still not convinced? Consider these gaps between the Top Performers and The Rest. Keep in mind that Top Performers represent only 22% of respondents. The vast majority of sellers (78%) fall into The Rest. 

Satisfied with the Outcome of the Negotiation
Achieve Target Pricing
Confident Participating in Negotiations
satisfied_outcome target_pricing negotiation_confidence

Exactly how to become a Top Performer in Sales Negotiation is the topic of another article, but you can start by following the 6 Essential Rules of Sales Negotiation. Across the board, Top Performers are much more likely to excel with the 6 Rules, and, in fact, the #1 factor most separating Top Performers from The Rest is related to Rule #1: Always Be Willing to Walk

If you want to increase margins, win more sales, and achieve your pricing targets, even in tough times, you need a team of Top Performers negotiating your sales. 

The 5 Most Effective Negotiation Tactics Buyers Use on Sellers


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Topics: Sales Performance Improvement Sales Negotiation