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November 25, 2022
Negotiation is an art. So much so, that a quick search for sales negotiation tactics returns just over 11 million results. Amongst those 11 million are the wild and wonderful - such as mirroring body language - to the more pedestrian strategies, like prior research. It can be tricky to wade through the noise and find strategies that are tried and tested, in addition to actually sealing the deal. To simplify the process, we’ve put together our top 6 negotiation strategies.
It’s tough work finding leads. It’s even tougher work to warm those leads up, move them through the marketing funnel, and get them sat in front of the sales team. It’s fair to say it takes a village and there’s perhaps nothing more disheartening than when a deal falls through at the final hurdle. By optimising your negotiation strategy, the value of outreach efforts improves tenfold, thereby improving the very value of a deal once it’s secured.
By becoming a skilled negotiator, you can artfully conquer the bargaining table and secure a better deal in the process.
We’re no strangers to the ins and outs of effective negotiation. As lawyers, it’s in our makeup to battle through the negotiation process, delineate over key terms, and make educated compromises. Not only that, but many of our team members are founders in their own right. By navigating complex negotiations, we’ve learned what works, what doesn’t, and what should be avoided at all costs. Below we’ve included our top 6 negotiation strategies for sales teams.
First up, research. It seems obvious, and yet, many deals have fallen through due to a lack of knowledge. Whether that’s related to the product or service at hand, or the business it’s being offered to, not coming prepared can leave a sour taste in everyone’s mouth.
It pays to invest time and energy into researching the prospect. Have you checked Crunchbase to see the current status of the business? Have they recently secured investment, or scaled dramatically in the last six months? How has the business been performing day-to-day? Have they launched any new projects? Faced any public hurdles? Scooped any awards? By knowing the answers to these questions, you can not only prepare for objections during a call, but you can also convey to the prospect that you truly care about their business, and where it’s headed.
The same applies to what you’re selling. Do you truly understand its benefit? Do you understand what separates it from competitors? What are some of the weak points of your service? Do you know how to navigate those limitations for your prospect? By having a deep understanding of what you’re selling - far beyond a snazzy sales script - you can field an authentic conversation with your prospect that can breed trust and a potential deal.
While it’s important to come armed with your approach, it’s also paramount that you ask questions. Countless sales have fallen through as a result of making assumptions, over securing facts. You may hazard a guess at what the priorities are for your prospect, but do you truly know? While your product or service might help them achieve A, B, or C, what if they’re currently looking to deal with X, Y, and Z this year? What if A, B, and C are on the back burner for the next year? If that’s the case, you may just be selling a solution they don’t need.
Take the time to ask questions that will give you a clear and detailed picture of where the company is, where it wants to go, and the obstacles that are in their way. You may just have the very thing that will propel them forward. But, if you don’t ask, you don’t get.
It’s all fine and well to ask questions, but how can you keep your client talking? A good rule of thumb is to ask “open” questions. Asking, “Is this a problem?” is not necessarily a great question. Why? Because they can only answer yes, or no, stunting the conversation before it even starts.
Instead, a helpful tactic can be to ask questions that start with what, why, and how. In doing so, you’ll encourage your client to tell a story, in addition to giving much more detail than a simple yes or no answer.
In sales, “80/20” is key. This refers to the 80/20 active listening tactic, whereby you speak 20% of the time, and listen 80% of the time. Aside from ensuring you’re carefully considering your client’s perspective, active listening can go a long way towards building a robust relationship, fuelling conversation, and creating informed responses for the 20% of the time you’re speaking.
While some teams refer to a sales script when prospecting, it can have its setbacks, namely that it can act as a blocker to meeting the client where they’re at. While a script can be advantageous in the preparation stage, your goal should be to give the stage to the client, and make them feel well and truly heard.
No one likes awkward silence. But in sales, that can work to your advantage. Before rushing to fill the void, try and resist speaking for just a few seconds longer. You’ll be surprised at how often the silence will prompt your client to give a little more information than they would have previously.
While this seems obvious, it’s not always properly hammered down in the sales stage. While you’re likely to determine their needs in relation to your business, have you addressed the company’s needs at large? Perhaps the business is time-strapped, and you have a software solution that outsources certain mundane activities. Great! Done deal, right?
Not quite. Let’s say in this instance the business is looking to seek investment in 6 months' time, and therefore will need to go through a rigorous due diligence process that will require clear reporting, strong governance procedures, and regulatory obligations. Without knowing the company’s intentions to seek investment, it may not seem relevant to raise that your product embeds robust governance, excellent reporting, and regulatory guidelines as a given.
Understanding the full breadth of a client's needs is an artful skill, and allows you to sell your solution in a way that’s bespoke for your client.
Time kills all deals. It’s perhaps the most famous saying in sales, and for good reason. Linger-time over a sales process has a long list of negative impacts, from opening the prospect to other solutions, losing momentum, and missing the window of opportunity whereby a client is receptive to a sale.
Furthermore, by removing any sense of urgency, there’s often very little impetus to sign on the dotted line, rather than wait it out for “another time.”
It can be tough, but make sure you put in a deadline. Successful negotiation demands it.
The sales process is complex. It’s difficult. And, often, it’s long. That is why follow-up is absolutely key. The reality is that many of the people you speak to today, just aren’t ready to purchase - yet. Whether that’s due to budgetary limitations, or current roadmaps, you’re far more likely to receive a “not today” than a “when can I sign?”
Follow-up can come in many forms, from emails to calls to in-person meetings. It can also be supported through creative means, such as pitch decks, targeted marketing, and events. The goal here is to remain at the forefront of your prospect's mind so that when they are ready to purchase, you’re the first person they call.
We don’t need to tell you that sales walks hand in hand with rejection. It’s why sales teams are resilient, determined, and often, eternal optimists. And yet, it doesn’t mean that continuous blows aren’t tough.
When prospecting with a “maybe”, it can be tough to keep up morale. It helps here to remember the 7-touch rule. This refers to a marketing principle, which states that on average, it will take someone seven “touches” to make an “action” or purchase a product. These touches might start with a phone call, shift to an email, evolve to a meeting, with a few pepperings of events, blogs, and reports, before finally evolving into a full-blown deal.
Keep your head up, and remind yourself that - statistically - you’re not likely to get a yes on the first call. Or the second email. Or the third meeting. So keep your head up, keep in touch, and keep the faith.
In sales, efficiency is key. And yet, often legal can slow down the process - or worse - block it. As entrepreneurial lawyers, we intimately understand the need for solutions over blockers, which is why we work effectively with sales teams to move quickly - without risk. And, it's a win win situation. Your business moves forward with robust legal protection, and your sales team secures a better deal in the process.
Seeking support with contract negotiation? Or simply in need of a legal team that gets it? Contact us now to arrange a free, no-obligation discovery call.
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