Everything is negotiable.

But is negotiation effortless?

No.

All reps must learn sales negotiation tactics. Regardless of their personality type or role, very few sales are made without at least some negotiation.

It’s not a big scary world of combat out there. Negotiations can be straightforward and reps absolutely can develop the skills they need to negotiate well.

At ASLAN, we are all about empowered reps who know what they’re doing and how to do it well. Read on to learn all the big concepts related to sales negotiation.

How Negotiation in Sales Has Changed

Remember the 80/20 rule? Blocking techniques? Or the 5 Ps? These were all ways that reps have been taught to negotiate. To nibble away like a mouse (asking for small items to get agreement) or mathematically calculating give and take based on a predefined ratio. None of it is useless, but B2B sales negotiation isn’t exactly the same as it used to be.

Here are some ways that sales negotiation has changed:

There are more departments involved. We’re talking procurement, finance, product, you name it. Companies expand and specialize. Heads from all types of departments may weigh in on resource or vendor decisions. Reps have to be prepared to have more nuanced negotiation conversations based on this growing number of people.

Buyers have more information than they used to. Your offerings, your competition, comparable products, your pricing, you name it. The digitization of marketing and sales has meant transparency into data that may have previously been revealed at a strategic point during a negotiation or sales conversation. Not so anymore.

Sales has become more tech-savvy. Similar to the information exposure point, sales has been transported into the digital age. Even negotiations. These may be happening via computer screen, which changes the nature of how reps can interpret and be interpreted (more on e-negotiations in a sec).

Procurement has gone tech too. This impacts sales in a big way, as much of the vetting stages previously done with a rep may be done before a rep even interacts. 

A Word About E-Negotiations

Gartner analysts have claimed that as many as 80% of B2B sales interactions will happen in digital channels by the year 2025. 

In 2020, the American Marketing Association performed some research on the increasingly common occurrence of email or e-negotiations in B2B sales. They found that the entire B2B sales process model is different when conducted primarily over email than it is in person.

The stages go like this:

• Responses to a bid
• RFP submission/preselection
• Lead buyer-seller email exchange
  • Buyer attention
    • Internal analyzing/information sharing
    • Recommendations
      • Rep engagement: promises and assertiveness
        • Contract reward

While it may feel like negotiations are weakened by virtual environments, there is some compelling evidence that an elongated period of internal analysis, information sharing, and recommendations could build a rep’s case in advance, making negotiations far easier.

Want to go deeper in this specifically? Check this out: What You Need to Know About Virtual Negotiations: Drop-the-Rope

A New Context for Negotiating

The collective outcome of these dynamics is that reps are having different kinds of conversations, and prospects are armed with information to drive negotiations.

The fun part is that reps have a chance to dive deeper into negotiation skills, which is a world of psychology and resilience and creativity.

There are a few different ways to go about negotiation.

Approaches to Sales Negotiation

Sales negotiation is fueled by two factors: power and leverage.

• Power dynamics relate to how much power, what kind of power, who holds the power, etc.
• Leverage refers to how that power can be exercised or used — it’s how the bargaining chips or elements up for grab are used as part of the negotiation

There are three super high level approaches to sales negotiation.

Positional or Distributive

This is a nicer way of saying win-lose. In this approach to sales negotiation, the rep is trying to take the biggest share of the deal possible. It can work but may require some overt assertion and a dominating approach. In a world where recurring revenue is a key imperative for many businesses, it can be a damaging way to negotiate this way out of the gate.

Partner

Win-win. A collaborative approach is about value-based selling and then negotiating on the basis of a well-researched need and provable value of the solution. It’s a “you and I are in this together to figure out what’s best for everyone involved.” Of course, it’s probably the most straightforwardly popular approach, but there is a third option….

Mixed

Many sales negotiations actually are a blend of positional and partner approaches. This isn’t bad or sneaky. The truth is, many prospects or companies don’t actually know what they need and may not be able to fully grasp the hypothetical value of a proposed solution. 

Reps do need to bring a level of authority and leadership to sales negotiations, which aren’t always best exercised in an “equal footing” partnership approach. It is a negotiation, after all. The very word implies some give and some take and everything may not result in total equality.

How to Negotiate in Sales

At a high level, here is the sequence of a sales negotiation:

Get in front of a decision maker — Perhaps it should go without saying, but reps obviously need access to the right people before negotiations get off the ground.

Be prepared — Do the due diligence, know the prospect, know the players, know the terms in play.

Build preliminary rapport — Yes, it’s a tech world, but people still do business with people. Rapport banks emotional currency and good reps will build those deposits early.

Set parameters — Again, a simple point but important one: effective negotiations have clearly defined terms of engagement. Everyone needs to be on the same page about what’s up for discussion and what the outcomes could be.

Keep the right point of focus — Sales negotiations can be derailed in a million ways: zooming way too far into minutiae, zooming way too far out in timelines, you name it. Reps have to learn to establish and maintain the right point of focus.

Concede as planned — All negotiations have predictable concession points that the rep should plan for. Get for give, etc.

End with a plan — Not all negotiations end with a decision, but they should all end with a plan. What now? What next? Who’s deciding what and touching back with whom… and when? All of it should be agreed upon before leaving the negotiation.

Want some ultra practical ideas for teaching or learning sales negotiation? Listen to this SALES with ASLAN podcast episode: 2 Pro Tips for Effective Negotiation in Sales

The Principles of Sales Negotiations

What are the driving principles of sales negotiations? ASLAN sales training frequently addresses mindset. That’s because how reps see themselves, and how they see their role in a sales context, is vital to a deal progressing.

It’s no different in sales negotiations.

The way reps mentally enter into negotiations, and how they think as they are driving it forward, makes all of the difference.

Here are the key principles reps need to grasp:

Be Problem-Oriented

Great negotiators don’t shape their conversations around the solution, but around the problem. Daniel Pink, in To Sell is Human, puts it this way: “One of the most effective ways of moving others is to uncover challenges they may not know they have.”

During prospecting and discovery, reps should be collecting all of the important points they need to make a winning case during negotiation. This includes uncovering the real pain points and problems a company is grappling with. These are the cornerstone of the conversation because relieving them is the whole point of the solution.

Reps have to return to that idea: imagine if you didn’t have to struggle with this anymore! It’s the real selling point. It keeps the conversation highly relevant and reduces the risk of getting caught up in secondary concerns or considerations.

Don’t Play the Cards: Play the Player

Like any interaction in a sales cycle, negotiation isn’t about facts and figures. It’s about people. We espouse Other-Centered™ Selling because it works. When reps are coached to focus on the other person, they’ll tap into what that person needs and wants. They’ll take on the perspective of that other person in an empathetic way. 

This is enormously powerful for negotiations, as it provides the substance of what can and should be negotiated, and what success ultimately looks like for everyone involved.

Chris Voss explained this well in Never Split the Difference: “Negotiate in their world. Persuasion is not about how bright or smooth or forceful you are. It’s about the other party convincing themselves that the solution you want is their own idea. So don’t beat them with logic or brute force. Ask them questions that open paths to your goals. It’s not about you.”

Reps shouldn’t be taught how to rapid-fire facts or overwhelm the person they’re negotiating with. They should be taught to see the other person clearly, tapping into their core desires, investigating and diagnosing the company’s needs, and then offering solutions in a timely way. 

Done this way, sales negotiations are just another stage in the working relationship that will be a brief, even amiable, settling of terms.

Control Your Emotions

Emotions make or break deals every day. There is a real fine line for reps to walk during sales negotiations. On the one hand, they must be extremely confident and even forceful. On the other hand, they must remain open-minded and other-centered. They will need a lot of practice to walk this line well.

Tim Castle, in The Art of Negotiation, says: “Remember this: there’s no harm in asking and don’t make it bigger than it needs to be. There will be more deals, this is just one of them. Learn from it, have fun with it and don’t sweat it. ‘Either I win or I learn.’ So what if they get angry or don’t like your terms? Keep your cool.”

Which segues nicely into the next point….

Be Willing to Walk

Top performing negotiators don’t make the mistake of seeing the negotiation as a life or death situation. Do or die. They understand that a willingness to walk relegates the negotiation to its proper place: as a meaningful discussion of costs and benefits between two (or more) engaged parties. 

This supports a pragmatic approach where emotion shouldn’t take over and bring volatility or fabricated urgency. Yes, the stakes may be high. But perspective must be maintained because, at the end of the day, it may not work out.

Build Value

In every stage of a negotiation, a rep needs to reinforce the value they are providing. It’s what’s truly on the table: is the prospect willing to give $X for X value? Does that exchange feel right? 

This like-kind perception (value for value) is only possible when the rep has effectively built the perception of value to the right level. This is often done successively, starting all the way back at prospecting (coming in with an expert insight, providing a proprietary value proposition, etc.). In every exchange, this has to be front and center.

Building value consistently ensures that there are no major surprises about what the solution will cost or how much a prospect is willing to pay. This has been established, and the case has continuously been made for “why it’s worth it.”

Have Trades in Order

“Trade, don’t cave” is a mantra you’ll hear a lot in sales negotiation training. The trade is all-important. Reps need to have thoughtful, meaningful, not fake trades in mind. These are the concessions they’re fully willing to make. It’s the currency of any negotiation where a rep has non-negotiables. The trade helps shift power to the prospect, which is vital to winning a willing “yes.”

Plan to Win

High performing negotiators see the outcome and see themselves winning it. They plan on it. There is a high level of confidence because they feel adequately prepared, know what they’re walking into, and understand how to command the conversation the right way.

This doesn’t mean they’re arrogant jerks, by the way. They can negotiate with amazing skill and still Drop the Rope™, reducing tension and making it clear: the outcome of this will be what’s best for you (the prospect). They still hold in their own minds: the outcome that is best for you is also best for me.

Negotiation Mindset

Limiting beliefs and limited confidence are deal killers in negotiations.

Reps first need to have the right mindset if they hope to capably handle sales negotiations.

Here are some of the beliefs that are immensely helpful to confidence in negotiations:

Buyers can pay. A RAIN Group survey found that 62% of buyers “strongly agree” that they had the flexibility to pay more if the rep demonstrated the value of the solution. 23% “neither agree nor disagree,” which may mean they just didn’t want to show their cards. Whatever the ultimate number is, the mindset reps need to have is to not let price get in the way of a good conversation. Remain focused on value.

Buyers want consistency. McKinsey’s latest studies in omnichannel B2B sales support the idea that buyers want consistency almost above anything else. This is established from the very earliest days of a relationship, including during negotiations. Reps need to show up, be true to their word, and follow through.

Everyone wants success. The me vs. them or us vs. them mentality is problematic and will undermine sales negotiations. Reps need to stay in a belief that everyone wants success. Because it’s true. A lot of groundwork may have been laid to get to this point so far, which means everyone involved has at least some invested interest in a positive outcome. That optimism is the right headspace for reps to stay in through negotiations.

There is more to learn. Any good negotiation training will teach people to listen up front and then to keep listening. Active listening is a huge quality of great negotiators, because what people continue to give away provides the substance of the next move or next point. Reps may inaccurately segment negotiations into their own phase of a sales cycle, shedding the discovery approach and moving into combat. This is not the right thing to do. They have to keep listening and stay in a paradigm of uncovering the truth so they can accurately address the issues at hand.

The Traits of Great Sales Negotiators

At ASLAN, we like to remind business owners and sales leaders and managers that not all reps have to fit a specific “salesperson” mold. They don’t all have to be inherently assertive or naturally outgoing. Many different types of reps can succeed if they adopt the right mindset and act on the right principles.

That said, reps who tend to be less bold by nature may have a steeper learning curve with this particular discipline. Because negotiation does take tenacity.

Here’s what great sales negotiators look like:

They are persuasive — The art of persuasion is a powerful one to master. People who are excellent at negotiation can interpret a situation, read body language, mirror, and exercise a myriad of other skills that quickly build rapport and trust, which are foundational for persuasion.

They keep a cool head — Negotiators are inherently stressful, or they can be. Skilled negotiators have learned how to keep cool under the pressure so they can keep making rational points and engaging in an alert, tuned in way.

They are confident — It may seem simple, but for reps to be good negotiators, they need to understand the product/solution inside and out. They need all of the right information about the prospect’s needs and concerns. Then, they need to have the confidence to apply all of that discovery in a negotiation setting.

They are flexible — Anyone who has negotiated anything has watched it go pear-shaped or in a totally unforeseen direction. Negotiators must be able to flex, often turning on a dime to facilitate a new line of thinking or discussion.

They have patience and stamina — B2B sales negotiations can be extended, lengthy, drawn out processes. Great sales negotiators hanging in there, with as much energy and commitment at the 11th hour as at the 1st.

They are not discouraged by failure — This doesn’t mean they don’t hate losing, it just means they always know losing is a possibility and there will always be another chance to win. 

ASLAN Sales Negotiation Training

Here’s a quote from Jeb Blount, famed sales leader and author of Inked, Negotiation Tactics That Unlock Yes and Seal the Deal: “Negotiation is a fundamental part of being a sales professional…. If you want your salespeople to stop leaving money on the table, you must teach them the core competencies, skills, techniques, and emotional intelligence needed to be effective at the sales negotiating table. Otherwise, you are leaving money on the table.”

Reps who become great at negotiation are many times more likely to get the outcome they want. They get the pricing. They get the terms. They close the deal.

This is not a step any rep can skip on their way to becoming great at sales. Negotiation will always be in play in some form or fashion in the sales cycle.

If your reps are struggling or ill-equipped to negotiate skilfully, we can help with that.

ASLAN’s elite sales training programs help enterprise organizations empower teams of high-performers in the full range of sales skills.

Get in touch to learn more.