Customers are people too. Just like salespeople, they usually care about doing their job and being successful. They love to buy, but generally do not like to be sold. This is most apparent in the negotiation between buyers and sellers. Over the years I have seen some great interactions and some that just flat out kill the relationship and inevitably kill the deals.
Here are 9 things that you should never do:
1. Forget to understand the buyer’s perspective.
It’s not enough to know what you want from a negotiation. You have to know what your customer wants. You must understand and respect the buyer’s perspective. Respect his role in the negotiation. By showing him that you are reliable and trustworthy, by not adopting manipulative or underhand tactics, usually you will find a reciprocity that rewards fairness with fairness. You’re also then entitled to let him know if you think you are being treated unreasonably. Unfair treatment breeds exploitation and the ultimate collapse of the relationship – whether you get the deal or not.
2. Think that Negotiation Starts at the End of the Sales Cycle
The attitudes of a customer at the negotiation table are a result of the selling actions taken throughout the sales cycle. If you’re subservient or passive in your early engagement with a prospective customer, it is likely that the customer will control the negotiation, as you try to finalize a deal. Negotiation starts early and, in truth, never finishes. Your interaction with the prospective customer colors his negotiating style, and your final bargaining, prior to conclusion of a contract, is just the end of the beginning of your relationship.
3. Confuse the position they take with what they actually care about
A position is a particular stance taken by one party in a negotiation. It typically outlines their preferred result. Interests, on the other hand, are what they really care about and if you don't understand those you will likely fail. Interests define the problem. They are based on intangible motivations such as need, desires or concerns, which underlie the preferred solution. It is important that you distinguish between interests and positions. Great negotiators are clear on their ultimate interests, and those of the other side.
4. Talk too much. Listening too little.
The cheapest concession in a negotiation is to let the other party know you are listening. Pay close attention to what has been said, repeat it, and use the knowledge to explore his interests, and deflect him from his position.
5. Squeeze every last drop of blood from a deal
It is unwise to pay too much, but it is also unwise to pay too little. When you pay too much you lose a little money; that is all. When you pay too little; you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do. Smart buyers don’t necessarily want to squeeze every little last drop of blood out of the deal. They understand the value of reciprocity and that fairness begets fairness. They know that you will be more inclined to support them after the sale, if the deal is a true win-win – though they may not want you to know that.
6. Negotiate On Your Own
Sometimes when you get to the end of the sales cycle your customer’s Procurement team handles the final step. Remember these people have a job to do. Your buyer, or sponsor, needs to be at your side of the table, explaining the value that you have convinced him you will deliver. Otherwise you are on your own and you have nowhere to turn. Having a negotiation partner reduces the stress for all parties and makes it less personal.
7. Use Price as a Compelling Event
Discounts offered in exchange for accelerated contract signature rarely work in B2B sales. You are signaling to the customer that you are prepared to reduce your price and can do so while still maintaining profitably. Then when the ‘sign-before’ date passes, it is difficult to increase your price again without damaging your credibility and the relationship.
8. Agree to a Price before you Establish Value
Any price that you present is too high if the buyer does not perceive adequate value. Before you begin to negotiate price, make sure that price is the only issue left to discuss and that buyer can explain to you the value they expect to receive. Price is easiest for the buyer to negotiate. For you, the sales person, you can only bring your price down – never up. If you discuss price earlier in the process than you should, then any price concessions you give become the starting point for the next round of negotiation – if you actually become the selected supplier, which will only happen if the buyer understands the value that you deliver.
9. Try to Close the Deal Too Early (or Too Late)
Timing is important when closing a deal. Poor negotiators rush to the end-line or delay unnecessarily, afraid of failure. Both approaches produce bad results. Closing before the buyer is ready is pushy, and damages the relationship. Delaying allows time for other competitors to enter the fray or new projects to take precedence. Great negotiators understand the how, when and where. They bring everything they need to the negotiation table in order to cement the deal, and they can isolate and agree a complete list of outstanding points of conflict, and resolve them one at a time. Help the buyer by providing him with a list of everything needed to close the negotiation. When you have addressed each of the points on the ‘list to be agreed’, ask for the order, close the deal and document the agreement.
Author of Amazon #1 Best-Seller Account Planning in Salesforce, Donal Daly is CEO and Founder of (his fifth global business enterprise) The TAS Group, the global leader in Smart Sales Transformation. Combining his expertise in enterprise software applications, artificial intelligence, and sales methodology, he continues to revolutionize the sales effectiveness industry. Feel free to download The TAS Group's latest publication, Battling the 57%: Deconstructing the Buyer Seller Dance.