One of the biggest challenges I’ve seen many sales reps work through is negotiating a deal.
It’s completely understandable in a way. You’re judged on performance, on results, and if you don’t deliver deals then you’re out. In many sales roles it’s rare that you simply put a contract in front of a prospect, they look it over, and then they sign it. The back and forth of negotiating is 100% expected.
If this is so normal, something we all expect to happen, why is it stressing sales reps out?
By negotiating a rep feels like the whole deal is at risk. They don’t know whether or not it gets signed at the end of the negotiation.
How do you typically feel when you’re not sure what’s going to happen next?
Uncertainty is difficult to handle mentally and emotionally, and that’s what a negotiation feels like.
It becomes even more of a nightmare when your job is measured on how well you’re able to come out on the other side of a back and forth with a signed contract and a check.
On top of that you’re negotiating a number of terms. Dollar value, length of deal, terms to cancel, services provided, payment schedule, and the legal jargon that holds everyone accountable can all be brought up in a negotiation. It can be downright maddening to try and navigate these waters.
Pick the wrong area to push back on and the deal could be dead.
The worst part, and you may be doing this yourself, is when a rep is running back and forth between the Manager, finance, and the prospect to get a deal done. Why are reps rarely taught how to negotiate for themselves?
After all, shouldn’t it be the sales rep who confidently brings a deal that’s essentially done to get the official approval?
Learning negotiating fundamentals, as well as what’s an acceptable deal and what’s not, should be part of any sales team’s training.
Let me give you an example of a move I learned in my first sales job. Before I presented any counteroffer to my boss I had to confirm that if we agreed to these terms we had a deal.
My first question would be, “Other than X, is there anything else holding you back from moving forward?”
Ask yourself, does it matter if the prospect wants a discount, a shorter contract, or extra services if she’s not willing to sign?
What if there are other concerns that aren’t on the table?
Time to get them squared away.
Then I’d ask my second question. “If I can’t get X done, will that hold you back from moving forward?”
Let’s be realistic here. A lot of prospects will ask for something while negotiating simply to ask. They’re not serious, they’ve already made a decision, they just want to see if they can get a better deal out of you.
There’s no point in negotiating if you don’t have to.
Of course, you will have to negotiate a lot of the time. Deals get more complex than one or two asks. Contracts can go back and forth multiple times with a number of different terms discussed.
How can you simplify what is an acceptable deal and what isn’t?
Smart sales teams use a tradeoff system to help the reps negotiate.
This could be a point system or a prioritized list that shows what both sides should ask for. It needs to be a simple document to reference any time a negotiation is going on.
Prospect asks for a 10% discount – what do we have to get in return to say “yes” to her ask?
Look at the document, make the offer, and move on.
Treating deals this way becomes even more important in complicated negotiations. Sometimes a prospect will ask for too much, or for things you can’t offer. You shouldn’t be wasting anyone’s time to approve a deal unless it’s one you know your team is likely to say “yes” to.
Early on in my sales career my boss gave me a set of price and billing negotiating rules to go with. As long as I stayed within those parameters I knew he was going to give me the thumbs up on a deal, even if he didn’t feel like it was the deal I should be pushing for. Yes, something might come up outside of those rules. Those were the deals we needed to talk about and hash out.
Having a fundamental set of rules helped me know quickly if the opportunity I was working on was a good fit or not without needing to ping my boss every step of the way.
It made both our lives a lot easier. He didn’t get badgered with basic pricing and terms every week until I was ready to put a formal proposal in front of a prospect, and I learned how to hash out a deal on my own much faster.
That guide put both myself and my boss at ease when I’d talk initial terms with a prospect because we knew I was playing by a set of rules everyone was on board with.
I didn’t have to worry about how to negotiate. My focus was on showing the prospect a better reality if they bought from me and ironing out the core terms to get a deal done.
Until I left that company I had no idea how important that guide was for me. In my next role we had no such guidelines and very little oversight for approval.
There were a couple times I heard how bad one of my deals was months after we started working with the client. Other deals would get rejected even though we stuck by the loose guidelines we had because of the strange final approval process we had in place. I wasted a lot of time on minor details on one deal, then I’d have to completely backtrack on my next because the big boss said “nope” to terms I thought were great.
It definitely messed with my head, and I think it’s a big reason why few sales reps lasted longer than six months. No one knew when a deal was a good one!
Set your reps up with the most common negotiation terms and some basic idea as to how to negotiate and everyone will feel a lot more at ease talking terms with prospects.
Like this post? Sign up below to get more like it delivered to your inbox!