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Successful Negotiation in a Business to Business Setting

Being an effective negotiator is an essential skill for any salesperson. Having negotiations to close deals and to get things moving is considered to be a standard way of doing things in retail businesses, service companies, and of course the entire range of B2B and B2C businesses. Companies with prolific negotiators will thrive, while those that have not inculcated this necessary trait for business success will have a hard time keeping out of the red.

Part science and part art, being a good negotiator is something that can, in fact, be learned and perfected over time. Here are some of the things you can do to improve your negotiation skills in a formal business setting.

Be confident, and do your homework. As soon as the negotiation starts, let those on the other side of the table know you mean business, that you know what you’re talking about, and that you have come prepared. Learn what they know, and avoid making assumptions. Do some research and figure out what they value and what they don’t, and pitch your proposal accordingly. If they don’t value what you have, the chances of striking a deal will quickly fall from slim to none.

Deal with the boss. Make sure you negotiate with the person authorized to strike deals. If you negotiate with non-decision makers, you’ll end up being stonewalled and perhaps waiting indefinitely for an answer from the superiors of those you actually spoke with.

Only start negotiations when you agree on things in principle. Can your service resolve the client’s issues? Can you provide proof of ROI? Can you fix what needs fixing, and take care of what needs taking care of? If the answer to any of these questions is ‘no’, then you are heading into a failed negotiation right from the get-go. Address the customer’s pain-points and solve their problems first, agree on things in principle, and then you can have negotiations on things such as pricing, delivery, and timelines.

Battles and wars. Sacrifice pawns for bigger gains. Be ready to give up something if you’re getting something of equal or greater value in return. For example, you may not want to give a discount for a service that is already priced competitively, but if you agree to sign a deal that includes a referral to another customer, or having the client sign early so that you can meet quarterly sales targets, then giving the discount makes sound business sense.

Don’t rush, and keep a level head. Never commit to something without taking the time to think it over; you can always call a client back later regarding a query or a request for something that came up unexpectedly. Always remember: negotiations rarely go as planned. You might be asked for a discount when you were least expecting it, or your client may threaten you with cancelling their order unless you give in to their terms. Poor decisions abound under these kinds of scenarios, so ask for time to think things over. If you have your doubts, it’s better to be safe than sorry, so know when to walk away from the table.

There’s more to business than money. Sales negotiations invariably involve discussions on price, so salespeople should, by default, be prepared to talk about discounts. However, think of things in terms of value as well. Value is something more subjective, and value is tied to a customer's perception of, and satisfaction with, your product or service. If you focus on what you are offering in terms of benefits and utility instead of simply talking about price or cost, you might be able to get a lot more for a lot less. You’ll also be able to charge closer to your initial bid price than having to offer a deep discount to close a picky client.

You could also offer other intangibles to the client, such as free coaching and on-boarding, offering easier payment terms, or offering services in lieu of client referrals (as mentioned above) or perhaps a positive testimonial or an honorable mention on the client’s blog.

Let the client go first. Since you’ve stated your terms to your prospective client, they essentially have everything they need to make a decision, and the ball is in their court. Let them start the conversation. You may be tempted to sweeten whatever deal you just offered so that everyone can go home and call it a day, but you never know what they will say, or if they were going to go for your initial offer to begin with! Listen first, and speak only once you’ve heard everything the client has to say. That way, you avoid making assumptions and unnecessarily amending your proposal.

Never give a range. Why would someone go for 10% off if 20% off was also offered? Stick to quoting one figure, and then go higher or lower as the negotiation progresses and you have a better idea of customer demands and requirements.

And last but not least…

Keep the conversation light. Clients and salespeople may sit on opposite sides of the negotiations table during the negotiation itself, but if the deal is closed, they will both be partners. Keep things light, open, and sincere, and you’ll be able to not only build on a stronger relationship should things work out, but you’ll also be able to avoid a lot of bad blood should things not go according to plan.

Have a negotiations tactic that is especially effective in your line of work? We’d love to hear from you!


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