Sales negotiations are as dynamic, tricky and contrasting as the meaning of negotiation is; discussion aimed at reaching an agreement.
Using successful sales negotiation skills with customers goes beyond the matter of haggling over price or other terms.
In this article today, we are going to talk about the 7 most common negotiation mistakes sales reps make while trying to close a deal.
We will also add some tips so that your sales team members can know how to work around these mistakes.
We hope this article will help hone their negotiation sales skills!
1. Quickly finishing the negotiation
The biggest mistake sales reps make is the rush towards finishing the negotiation as early as possible.
Even after having years of experience.
This rush is backed by the fear that the more time prospect takes in finalizing the deal, the chances of a failed deal increase.
Experts believe this is not entirely true, although the target of every sales rep must be get done with negotiation.
The ASAP factor shouldn’t deter sales reps from engaging the prospects in a healthy negotiation.
Once sales reps are able to engage your prospects in a healthy and communicative negotiation the more prospects will want the deal to end positively.
Pro tip:
Always resist your temptation of ending the negotiation quickly.
The major reason might be that as a sales rep you are nervous and want to get it over with as quickly as possible.
2. Too much negotiation
Over-negotiation is more of a mistake that sales reps often commit themselves to.
Being in a position where you are always clouded by the sales targets, it is easy to lose sight of the actual plan.
Your job as a sales rep is to make business boom because the sales success you achieve will reflect on your career in sales.
We have no doubt about that.
What we want you to know is that as a sales professional, your other job is to build trust with your prospect.
This is a major stepping stone in sales as it results in a long-lasting relationship with your prospects.
For instance.
A sales rep is in the middle of a conversation with a prospect.
Prospect: “I am afraid this price of $12000 will hinder us in moving ahead with this deal!”
Sales rep: “I can push the price below $12,000. Will it boost your confidence to make the deal? When can I send you the contract?”
This is a perfect example of a sales rep over-negotiating with the prospect. The prospect has simply stated a threshold of what they will pay.
The sales reps don’t give much thought to the situation and jump right in with the offer to bring down the price.
Also mentioning the contract without a proper signing date looks unprofessional on the rep’s part.
Pro tip:
Ask direct questions that can help you clarify why the prospect needs the price to be below $12000.
Knowing the background of the prospects’ demand will allow you both to reach a mutual agreement without compromising the company’s revenue goals.
3. Negotiating without a technical win
With a technical win, we mean the customers agree to the fact that your product or service is at par with the industry standard.
If your products and services are better than the competition your price negotiation will always be in the company’s favor.
If as a sales rep you move ahead in the negotiation process without a technical win, you will end up over-negotiating or matching the pricing of your competitors.
Pro tip:
Focus your efforts on laying the groundwork for effective negotiations and smartly use technical win while negotiating with your prospect.
4. Not developing concessions
Losing a negotiation is a bitter experience for sales reps, but it is an even bitter one for the prospect.
They will perceive your product or service on the basis of your negotiation. Whether they become a customer or not is a different part altogether.
Sales reps must devise a few concessions into their negotiation strategy.
Many sales reps do not follow this strategy. Instead, they end up having a conversation that makes the customer the sales rep is just thinking about winning.
Such an approach on the rep’s part is unhealthy and demotivational for every other team member.
Pro tip:
Sales reps must create scenarios that help them negotiate based on the reply prospect gives.
Every sales rep has to make sure that there are always winners after a negotiation is done.
5. Sharing your bottom line
While negotiating, sales reps often use phrases like “this is a deal-breaker” or “this is non-negotiable as per our bottom line”.
When sales reps use such phrases, they introduce limitations to a negotiation.
Such phrases always stamp negotiations as unsuccessful.
Pro tip:
While the negotiations are going on, sales reps must act as expert negotiators and keep the most options on the table.
This works in direct conjunction with point 4 above. You must act as open-minded and flexible negotiators and avoid introducing restrictions between negotiations.
6. Not negotiating directly with a signing authority
Many times, while carrying out over-negotiation, fewer concessions and introducing restrictions, sales reps miss out on the opportunity to reach the ultimate decision-maker.
Too many reps fail to realize they’re not in conversation with the final decision maker and this might lead to a disastrous negotiation.
With a handful of concessions, the prospect you were talking to agrees to the 2.5 % concession on your regular price.
You are thinking I have closed the deal and then you come to know that this was not the final decision-maker.
The prospect has passed on your offer to the decision-maker and the negotiations start all over again.
Pro tip:
Whenever you are in conversation with your prospect, make sure you introduce such questions that help in identifying the final decision-maker.
7. Not asking the right questions
Sales reps often forget that the questions they ask direct the conversation of the negotiation towards success or failure.
Sales reps often forget that they have the same amount of authority as the prospect.
Due to this sales reps often miss out on crucial questions and end up asking questions that push the prospects away from the conversation.
Some prospects might be worried about your costing or might need continuous reassurance that their decision to go with your solution is the right one.
Pro tip:
Ask questions that help highlight the functionality of your product.
Keep the conversation reasonable so that you and your prospect can both benefit from the same.
The questions help you determine the hidden concerns that may arise later and hamper the negotiations.
Conclusion
Having a sales management software in your arsenal will surely help streamline your entire sales process.
Using this intuitive sales tool, you can create a positive conversational environment for your sales negotiations.
We discussed how haste, less concessional plans or not asking the right questions can lead to the failure of your negotiation.
By using CRM software you can store all the previous records of your negotiations. Based on these records, you can develop various plans that will come in handy in future negotiations.
With its cloud access feature, users can access negotiation-related verticals from any place or device at any time.
You can also automate your emails and texts for reminding yourself or the prospect about the negotiation date, time and agenda.
With the built-in cloud telephony, you can make and receive calls, record them for future training and take notes while negotiating with the prospect.
All these changes will reflect automatically on your contact’s timeline.
We hope this article was able to shed some light on how sales reps make some general sales negotiation mistakes and how they can overcome them.
Sales revenue is an integral part of every sales rep’s life.
So is managing your entire sales process.
If you make mistakes while negotiating with the client it might affect the profit margin of the business.
Use the above pointers as guidelines and make sure you never miss out on making the best negotiations.
