Negotiation Tips for Sales Professionals
This post contains key points from Bradley Hartmann’s Sales Field Manual FM 04-22, which focuses on Negotiation.
The Sales Field Manuals™ are brief, actionable, high-caliber advice for the craft of professional selling. You will learn your lessons of combat so well that doing the right thing will become habitual. You will gain confidence in yourself as a professional salesperson who has learned to succeed in any circumstance.
Negotiation Quick Links:
For more on negotiation see our Professional Sales Field Manual: Negotiation
Introduction to Sales Negotiation
The Three F-Words
You thought there was only one F-Word.
Not true.
In negotiation, there are three F-words.
And vocabulary is important here, because life is one long series of negotiations. . . and then you die.
The truth is harsh, I know.
Feelings: Effectively communicating how you feel and engaging in conversations to understand how other people feel is at the root of effective negotiation.
Finances: Humans struggle to communicate their feelings about finances. Negotiation is - a series of conversations about feelings and finances.
Fairness: Determining what is fair—and what is not—is a matter of perception. Arriving at an agreed upon evaluation of fairness is tricky. It’;s not impossible, but it’s tricky. This is why we negotiate.
Why People Buy
Marketing guru Seth Godin has said people buy for three reasons:
1. Convenience
2. Affiliation
3. Status
I've unsuccessfully worked to punch holes in that trio. People buy to make life easier, become members within various groups, and gain status among peers within those groups. (The Jordan 3s were all about status.)
And this trio tells us something about why people struggle to negotiate well: We are afraid.
We are afraid of hearing no.
We are afraid of conflict.
We are afraid of silence. We are afraid of losing.
Why?
Because, for thousands of years as our neanderthal brains were developing, initiating conflict within the tribe and risking rejection meant certain death.
Alone in the wilderness, a single human was easy prey for a saber-toothed tiger. (Especially when sleeping, humans are ridiculously vulnerable!)
Humans' fear of rejection is hard-wired, but it can, and must, be overcome. Conflict moves relationships forward.
Traction requires friction.
For sales professionals, we generally feel comfort- able persuading, influencing, and cajoling.
But negotiating?
Negotiation feels different.
(It always comes back to the feels.)
Why?
It feels different because most sales professionals haven't been trained how to negotiate thoughtfully and intentionally. Most sales pros don't have any negotiation mental models, processes, or tools.
The results, then, are predictable: Salespeople often don't have any confidence in negotiating for the fair value of their products or services and simply adopt a commodity mindset.
Going to the Auction
The Commodity Mindset is the opposite of selling.
It's a mindset that bemoans, "Well, our competitors all sell the same products and deliver them on the same trucks and store them in the same warehouses -and there's so much information online these days -so let's sharpen our pencils a bit and lower our prices."
If you've ever thought that, let me tell you that it's a lie. Why? Because there is a unique combination of products, services, processes, and you that can never be replicated by anyone anywhere.
Now, that doesn't mean you actually deliver unique value-not yet, anyway-because customers decide that, not you. What it does mean is that there's no such thing as a true commodity.
You must believe that.
Otherwise you'll be competing on low prices, in which case you are not needed (Walmart doesn't need salespeople, do they?) or you'll simply be running a reverse auction everyday, competing by simply lowering your price until a deal is made.
Your competitors will take advantage of you, under- cut your price, and erode your margin. Your efforts, then, may deliver cash flow, but not profits.
Buying In vs. Opting Out
Herb Cohen, a Brooklyn kid who coached US basketball teams as a private in World War II, launched what is now the multi-billion-dollar industry of consulting and training people on the fundamentals of negotiation.
Asked to define negotiation on the old Tom Snyder show, he said, "It's two kids arguing on the corner of Eighty- Sixth and Bay Parkway. It's husband and wife arguing about where to have dinner. It's a mom getting her kid to do homework. It's John Kennedy talking to Khruschev and Khruschev banging his shoe on the table and screaming, We will bury you,' Khruschev, who, all the while, has two perfectly good shoes on his feet. It's not something you learn, but something you've always known and have been doing all your life."
There is no opting out of negotiation. You either choose to intentionally use the principles of effective negotiation or choose negligence
Negligence, while undesirable, is common. It negatively affects you, your family, and your company, but it doesn't have to. After all, there's a library full of books out there to help you negotiate better.
Negotiation is a Journey
Too many books and articles treat negotiation as an event – the point where you take the seat directly across the table from your adversary and begin.
While negotiation can be an event, you’ll see why it’s much more than that from the buyer’s perspective.
Negotiation is a journey.
It begins before you ever meet in person.
Sure you may have a five step sales process:
1. Research
2. Discovery
3. Proposal
4. Negotiation
5. Close
However your ability to effectively negotiate in Step Four - Negotiation: The Event - will be contingent upon how you plan for Negotiation: The Journey that spans steps one through four.
The Not To-Do List
10 things you should NOT do while in negotiations.
There's hundreds of potentially helpful things you should do during a negotiation – too many to list.
As for a Not To-Do list, that's a shorter list. Avoid these things and you’ll be a better negotiator:
1. Don’t go too fast - Let the conversation develop
2. Don’t lose your poise - Manage your emotions through controlled breathing and silence
3. Don’t focus on the big issues first - the goal is collaborative momentum. If there is friction with small items, simply say, “Let’s set that aside for the moment and come back to it later. Is that reasonable?”
4. Don’t talk so much - You cannot learn anything if you’re talking. Ask intelligent questions, shut your mouth, listen, and then ask your counterpart for more information with subtle follow up questions.
5. Don’t lose track of progress - NATEA*: Nothing is Agreed Til Everything is Agreed, right? Frequently verbalize and visualize what has been agreed upon, what has not, and what remains to be discussed.
6. Don’t interrupt - Your mother was right. It’s rude.
7. Don’t believe any stated non-negotiable - With the right set of concessions, many a “non-negotiable” has proven to be quite easily negotiated. Assume everything is negotiable.
8. Don’t lose track of The Negotiating T.I.P - Herb Cohen coached his students to constantly evaluate the relative positions of advantage and disadvantage regarding three elements: Time, Information, and Power.
9. Don’t believe the stated deadline - As a former deadline-maker-upper in my role as an area purchasing manager, I can assure you this is true. Not all the time, but much of the time.
10. Don’t ignore switching costs - There are always switching costs - expenses, effort, or annoyances that arise when changing from one product, service, or provider to another - that require capital, talent, and time. Thoughtfully include them in the mental accounting of your open, target, and bottom line.
Tricks I Used with Consistent Success
Here are several subtle negotiation tricks that I used as an area purchasing manager at national homebuilder. Feel free to use them yourself and certainly anticipate these tactics being used on you.
Silence
I’d simply ghost ‘em - well before we applied such a hip label to the act of ignoring someone. It was my go-to move when I received a bid i did not feel was aggressive enough.
It worked.
Ask Sales Reps About Their Sales Goals
Okay, this one makes me feel a bit smarmy, but not nearly enough to withhold it from you.
(Judge me if you must.)
As pressure was mounting and we found ourselves comfortable with multiple potential vendors, I would ask the individual sales reps about their annual goals and how winning this deal – or losing out on it- would impact them personally.
I asked the sales reps about their goals to get them more personally invested. I wanted them thinking they had to close the deal, violating the inviolate rule. “Care, but not that much.”
Casually Namedrop the Competition
As the intensity ratched up, I’d pepper out our conversations with allusions to the competition.
“Sorry for the delay, Sam. I was tied up on a conference call with Alex over at (insert name of Sam’s biggest competitor). What can I do for you?
Nibble
The nibble is a Herb Cohen classic - it works.
Here’s how: Once you have made the decision to award the work to a vendor, you call them to share the good news … and make one last nibble.
“Keegan! Congrats – we’ve decided to award you the business, if (here comes the nibble) we can get 2.87 percent off each GAF Master Flow® Vera Cap. Say yes and the business is yours!”
Leverage Fatigue for Further Concessions
“Fatigue,” legendary football coach Vince Lombardi observed, “:makes cowards of us all.”
It’s as true in negotiation as it is on the gridiron.
When I noticed my counterpart was becoming fatigued, exhausted, and / or bored, that’s when I’d ask for additional concessions.
Invoke the Sunk Cost Fallacy
Physical fatigue often leads to the mental lapse in judgment known as the Sunk Cost Fallacy.
Here’s what it sounds like:
“We’ve come so far, Jerry,” the buyer says, half-pleading, half motivating. “If you cannot reduce your delivery fee, these 72 hours of negotiation we’ve invested to get us this far will be for naught. C’mon let's finish this thing. We’re so close. It’s only $50 per delivery!”
The sunk cost fallacy is a cognitive bias in which people continue investing in a decision or project based on the resources they have already sunk into it, rather than on the current or future value of the project.
Move Deadlines Arbitrarily to Improve Leverage
You want to be as easy to work with as possible, but don’t be overly fearful of the stated deadlines and don't be surprised when they move.
Asking, “Just curious – why is this date on the deadline?” is a fair and legitimate question to ask, preferably in person or on the phone. Asking in an email allows for too much time to synthesize a compelling answer.
The off-the-cuff answer you hear will often tell you all you need to know.
Mastering the art of sales negotiation is a critical skill that can significantly impact your business's success. By focusing on preparation, understanding the journey, and fostering a collaborative atmosphere, you can turn potential conflicts into win-win situations.
To learn more about negotiation, be sure to check out our Professional Sales Field Manual on Negotiation.
