Have you ever felt that you gave too much away in a negotiation? Have you ever had the idea that the deal could have resulted in a higher value or better conditions? Or worse, have you lost a deal because of a lack of preparation when the stakes were high? Negotiation can be tough. Negotiation is all about preparation.
You have been working for months or years on a deal. Then you’re finally there. The customer is ready to buy your solution and invites you to discuss the contract terms. For you as a salesperson, frequently, a contract negotiation ends differently than you had anticipated. Sometimes it even results in a lost deal.
But you can do a better job. The key is in the preparation. Here are a few tips to prepare for contract negotiation.
Decide exactly what you want to achieve
Lots of people start a negotiation without determining what they want to achieve. Is it your goal to make the deal at any price? Is it your goal to keep the relationship strong? Deciding what you want to achieve is critical before starting a negotiation. Also, think about the best and worst possible outcome before you begin.
Know who’s on the other side of the table
If you are invited for contract negotiation, understand with whom you’re dealing. Frequently people got surprised by the attendees. Will the director be there? Is legal present? Is there anyone from procurement? Be prepared for who’s on the other side of the table. Different people could have different goals.
Be confident about your added value
As a salesperson, you often got surprised by new people at the negotiation table. This frequently happens in dealing with corporates, as they bring in procurement. They will likely do anything to get a lower price or better conditions. So it’s important that you are truly convinced about the added value you bring to their business. It will then be hard for them to attack your proposal or ask for unreasonable conditions.
Oversee the bigger picture
Negotiation is not always about price. Be prepared to negotiate on several subjects. Often you see customers start negotiating about payment terms, delivery, support, and T&C’s. When they ask for a favor, always ask something in return. Play with several options. For example, if they want a discount, ask them to pay in 14 days instead of 60.
“Negotiation is not always about price.”
— CEO of Sales
Understand the company goals
Good salespeople have developed a certain amount of business acumen that they can use in critical negotiations. It is essential to understand what the company goals are before you enter into a negotiation. What’s important for your customer? Is it just growth? Is it margin, cost, or cash? When you understand this, you can play with several items to reach an agreement where both parties win.
Know your power
Nothing is more frustrating than negotiating with people that have no authority to decide. The same goes up for you. If you have the opportunity to negotiate directly with the decision-maker, make sure that you have decision power too. Prepare how far you can go and on which topics you can decide. Don’t leave the negotiation table with open topics. You miss the opportunity to close the deal.
Recognize the tricks
There are common tricks in the negotiation process. If you can spot them during the conversation, use them in your favor. Often, tricks are nothing more than buying signals that need to be uncovered. Remember that in the end, everyone is there to make a deal.
Be prepared to walk away
Set your limits in advance. Be prepared to walk away from the table if they do an unacceptable counter-proposal or when they demonstrate inappropriate behavior. Never accept unethical conditions. Stick to your values.
We believe that these tips will help you to do better negotiations. What’s your experience? What advice do you have for a strong negotiation? Let us know!
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