Here is the second in a series of sales insights from IRD Prospector

MASTERING the subtle art of negotiation is what separates great salespeople from good ones. Accomplished negotiators can reach mutually beneficial agreements even in the most competitive environments and retain good client relationships over many years.

What’s more, learning solid negotiation skills can help you get ahead in many other areas of your life, because humans bargain more than you think: in friendships, relationships, while shopping for a new car, and even with yourself (if you hit the gym three times this week you can reward yourself with a pub lunch on Friday).

As with anything worth learning, it takes a bit of time and effort to become proficient at negotiating, but there are a few steps you can take today to see better results in your negotiations tomorrow. Here are IRD’s insider tips to set you on the right path.

Tip 1: Invest time in your preparation

Approaching your prospect strategically and well-prepared is often half the battle. Even if you are just reaching out to book a meeting, make sure you have outlined a plan for your conversation. Sometimes, the casual chat can turn into the sales meeting or at the very least, a meeting qualification. Do you have answers to the following questions? 

• What is the desired outcome of your conversation?
   
• How much leverage do you have?
   
• What is the lowest rate you are willing to agree on?

Especially for tricky, high-value opportunities ask a colleague or more experienced negotiator for their feedback on your strategy and discuss alternative ideas. Consider any objections you might face in your discussion. Running through different scenarios in advance will make it easier to overcome them. 

Tip 2: Know your leverage

If you want to walk out of a negotiation with a satisfactory outcome, you have to understand how much leverage you have before you enter the discussion. Without leverage you have very little bargaining power. Leverage is influenced by: 

1. Predetermined factors, including
 

• How unique is your offer?
   
• Can they afford to miss out on the opportunity? 
   
• Can you help solve a business challenge the prospect is experiencing?

2. Behavioural Factors

Behavioural factors require you to read and interpret your negotiation partner’s actions during the meeting. This is a little bit harder to determine in advance, but good preparation and experience will enable you to think on your feet when it really matters. 

For instance, if your prospect seems distracted and is constantly checking their phone for messages and emails, bring their focus back to the meeting by asking them what they were hoping to get out of it. This is an easy way to re-engage them in the conversation and remind them that they have already recognised some value in your offer that made them want to learn more about it. 

Tip 3: Use variables to reach a good outcome for everyone

It may seem counter-intuitive at first, but don’t let your inner athlete get the better of you in the negotiation. While a competitive attitude can certainly give you an edge, too many people buy into the sports analogy of negotiating “win-lose” or “us-versus-them”. 

Enter the negotiation with a clear understanding of what a good outcome would look like for your prospect. They need to feel like they have walked away with something from the negotiation, so think about what that could be.

Can you offer them a tailored training session to make sure they get the most out of the product? How about adding another user to their license? 

The trick is to make that ‘win’ something that doesn’t cost your business much, if anything at all. Despite popular belief, price is rarely the sticking point in a negotiation: it’s usually value, or level of service. 

Tip 4: Sharpen your communication skills

Of all the tricks in the negotiation trade, listening is by far the most underrated skill. Start your negotiation by finding out exactly where your prospect’s head is at. Empathise with their objection, relate to them and their situation. Use phrases such as “I appreciate that…” but be direct in your language and highlight the benefits you have to offer. Remember if they have agreed to a meeting, they are likely to be considering a partnership. 

If a challenge arises, work with your prospect to find a suitable solution. Reiterate that you want to reach an agreement that is a viable option for both of you. Being on the same team and working toward a common goal is crucial to reach a positive negotiation outcome. 

Finally, create some urgency to make a decision and agree with your prospect to work towards a specific deadline. This tactic doesn’t only give both negotiation partners a clear timeframe; it also makes the contract negotiation a more pressing issue for your prospect. If they don’t act soon, they might be missing out on a great deal.