You’ve finally met the customer and negotiated the terms of the deal. What’s remaining now is signing the contract. However, the customer becomes hesitant to close when you thought you’d won them over. Perhaps the customer doesn’t return your calls or calls off the deal entirely.
No matter how savvy you are, negotiations are not a straight path. The outcomes of a deal don’t always end up how we want. Here are some techniques you can use to roll with the punches while closing more deals.
Look beyond buying and selling
In negotiation seminars, people learn that price only serves as a benchmark for the value you’re offering your customers. So, it would be best if you instead focused on learning about your prospect and their circumstances. Find out how a customer’s needs related to the value you’re offering. You know that the customer needs your product or service, but why?
When you concentrate on value, you get to leverage the customer’s anticipation of what you’re going to offer. You show the customer the benefits you’ll provide and how their life will improve if they work with you. This way, the customer may not aggressively focus on price.
Define parameters for concessions
During a negotiation, you may have to compromise to receive something else in return. It’s a matter of give and take. A concession is what you grant to your prospect in response to their demands so that the prospect can give you something in return. This is easier said than done. There has to be a limit to what you’re willing to give or compromise on.
A 2% discount or an additional six-month warranty may not seem like much at the time of negotiation. However, when you’re drafting the contract, those terms might not seem as ideal. You might have agreed to terms you can’t or shouldn’t accept. It’s better to plan what you’ll offer as concessions in advance.
Though concessions are necessary for negotiation, sometimes they are not appreciated. A prospect may downplay your offer, or demand more concessions. Be careful to never make a concession that doesn’t include the obligation to reciprocate.
Therefore, it’s wise to define limits on concessions such as warranties, upgrades, discounts, or other addons before you begin the negotiation. Negotiation training seminars stress on deciding what you’re willing to concede in advance. This helps ensure you get something of the same or greater value in return, by asking for reciprocity in a diplomatic way.
For instance, if you’re negotiating on price, where your prospect wants you to adjust the price, you may do so, if there’s room for that. This could then be used as leverage to arrange for a deadline extension in return. With a few exceptions, a prospect will usually reciprocate your concession by extending its deadline.
Be well prepared
Always do the necessary research and analysis. You’re likely to leave value off the table if you fail to prepare thoroughly. Your prospect may also choose to come prepared, and it’ll, therefore, give them more leverage. Though you may not get to use all the information you gather while researching, a sound understanding of what’s at stake will help you make better decisions. Researching will help you think on your feet when things don’t go as expected on the negotiation table.
Here are some factors you should consider while analyzing the deal:
- Your goals, both short-term and long-term, as related to the negotiation. Also, consider your strengths, such as assets, skills, and experience. Knowing these factors helps you gauge whether you can deliver as promised once you close the deal.
- Come up with the next best option in case neither you nor the customer is willing to settle on the first deal.
- Your prospect’s interests: Research your customers to understand how their business works in relation to what you’re offering.
- Competitors: Consider how you stand against the competitors in this deal. What can you include in your pitch that shows you’re better than them?
- Form a negotiation team and assign members different responsibilities. If you can, attend seminars or hire a consultant to help you prepare.
Talk to the decision-maker
Most times, it’s a waste of time negotiating with a prospect if they are not authorized to sign the contract. Sometimes, customers delay you intentionally so that by the time the negotiations reach the decision-maker, you may have used up all your concessions. This could leave you with nothing to use as leverage.
Say you’ve been speaking for months, only for the prospect to tell you they’ll have to consult their boss before making a final decision. You’d be disappointed, especially if you thought the finish line was in sight.
Be wary of negotiating with anyone who’s not the decision-maker. Merely asking whether the person you’re speaking to is authorized to close the deal doesn’t guarantee they’ll come clean with you. You could instead ask questions like how they’ve handled decisions similar to what’s on the table. Listen to their sense of confidence. Watch their body language. Look for proof that shows your contact is the decision-maker.
If you work out that the person you’re speaking to doesn’t have the authority to close the deal, don’t terminate it. Instead, be careful about what you share, and don’t be in a rush to negotiate until you’ve met the boss. Use that opportunity to learn more about the prospect to give you more leverage when you eventually reach the negotiator.
Besides, the person you talk to may will likely exert some influence on the deal. These days, few major decisions are reached in large organizations that don’t require internal consensus. Make your contact feel confident that you can deliver what they need and that they can trust you. However, only negotiate with the decision-maker.
Your body language says a lot about you. Speak directly and clearly, while maintaining eye contact. These are a few of the essential elements that are important to get right. Though it takes time and practice, you can increase your confidence when you work on it or take a seminar on how to make the right impression.
That said, a customer can only take you seriously if you have prepared well and presented a convincing pitch. There’s often a disconnect between how we pitch something and the way our audience receives it. Confidence helps you bridge that gap, but it has to be backed by credibility.
It’s easier to keep your prospect’s attention if you’ve mastered the art of storytelling. People tend to pay attention to an intriguing narrative. No matter how well prepared you are, if you can’t be convincing, then you likely won’t be in control. In this sense, you’ll be more confident if you present yourself well, are well-prepared and are able to capture and keep your prospect’s attention.
Walk away if necessary
A customer whose terms are unreasonable does not appreciate the value you offer. If a customer’s demands don’t lead to a favorable outcome for your company, don’t be afraid to walk away. Negotiation should be mutually beneficial since success is dependent on how deeply the customer needs what you’re offering. Walking away can send the right signal, and often doesn’t result in the deal being called off.
A customer who’ll only close after radical amendments or a price reduction doesn’t appreciate the value you’re bringing to the table. There’s a likelihood that you might not have a good working relationship with a customer in these circumstances.