January 31st, 2017
Negotiation is an essential element of most sales efforts. Yet too many salespeople, professionals, and business owners lack the skills to negotiate successfully. If you’re not good at negotiating, it can cost you both sales and profits.
Have you made any of these common negotiating mistakes lately?
1. Not being willing to walk away
This is both the most common and most deadly negotiating mistake. If you’re not willing to walk away from the deal, you’ve already lost. Your willingness to walk away is your greatest source of power in any negotiation.
2. Having the wrong attitude
Do you—like many people—hate negotiating? Does it make you uncomfortable? Do you do whatever it takes to avoid it? Then you need an attitude reset. Negotiating is not about fighting or conflict or seeing who can screw over the other side more. It’s about working together to create an outcome that’s beneficial for both parties. It can be challenging, but it can also be fun and invigorating.
3. Undervaluing your product or service
Too many salespeople don’t appreciate the full value of their own products and services. As a result, they often ask for too little or they agree to a low-ball first offer—both of which hurt profits.
4. Failing to do sufficient research
Whoever has more information in a negotiation has an advantage. How much do you know about your buyer? What are their goals and dreams? What are their concerns and fears? What are their values and priorities? What pressures and deadlines are they dealing with? What is your product or service really worth to them? What options do they have besides buying from you?
5. Focusing on only one issue at a time
While it’s natural to try to resolve one issue before moving on to another, it’s also easy to get stuck that way. Look at the whole picture. Often you can trade one issue for another, thus resolving two at once.
6. Making unilateral concessions
When you make a concession without getting one in return, you encourage your buyer to ask for more. If there’s no cost to them, why shouldn’t they ask? Which opens you up to losing more and more on the deal. Always, always, always require a concession from your buyer in exchange for a concession from you.
7. Not looking for creative solutions
What’s important to your buyer besides what’s on the table? What’s important to you besides what’s in the contract? Could you give them better terms instead of a discount? Could they provide you with referrals? Could you throw in something that costs you little or nothing but would be valuable to them? Look for creative ways to increase the value for both sides. (Hint: This is where having lots of information about your prospect really comes in handy.)
Fortunately, each of these mistakes is relatively easy to correct and thus avoid in the future. Awareness is a big part of each one. Practice negotiating in low-stakes situations to get more comfortable, gain confidence, and hone your skills. That way, when the pressure is on, you won’t make any of these mistakes, earning you more sales and more profits.