Sales Negotiation: The Mistakes That Cost You Deals

Aaaaaaah, the sales negotiation. That moment when all your efforts (finding the right contact, looking for useful information, creating a link with the prospect...) can suddenly come crashing down. All because of a number...

Let's face it: for the sellers, it's the equivalent of a penalty in the Champions League final. A decisive and high-pressure moment.  

Fortunately, there are a few good practices that can be put in place to manage this moment in a light-hearted way...

Above all, there is ONE huge mistake to avoid (easily).

Follow the guide.

Golden rule number one of business negotiation: You should never negotiate by e-mail!

A few days ago, one of my best friends told me an interesting story. A nasty story that happened to her while she was working for one of the biggest SAAS (software editor) companies in France.

She learned a lesson from it that inspired me a lot, so I thought it was worth writing an article about it.

She was dealing with a very promising prospect (the kind of big opportunity you get once a year and don't want to miss), but horribly slow on the uptake.

The people she was in contact with answered the phone one week out of three, asked the same question thirty times, raised objections that were completely lunatic. Despite all these weak signals (several times she hesitated to close them), they kept showing interest. In short, she was going crazy. She was going crazy.

One morning, she received the following email from the prospect: "Could you give us your best offer?"

She thought about it. Throwing out a figure in an e-mail without a clear next step is rather unusual during a sales negotiation. Except that she had been pushed around for several weeks, the end of the quarter was approaching and she wanted to get her closing.

So she sent the figure.

As a result, the prospect never showed up again. Later, she learned that the prospect had shown her offer to a competitor to negotiate a better deal. She bit her fingers off for several weeks.

Once she recovered (well, I assure you it didn't last long), she learned a good practice from it that she gladly shares with her peers (thanks to her). And that I am sharing with you today

DO. DO. EVER. OFFER. BY. MAIL.

This does not mean that you should not give an idea of your prices. On the contrary: it is to the advantage of sales people to communicate a price offer early on in the process. It saves everyone time. BUT the concrete offer, which is the result of a commercial negotiation, should never be included in an e-mail.

Why?

• Because your prospect can use it against you, as happened to my friend
• Because writing is a risky way to communicate. Misunderstood writing can lose you the deal.
• Because you DON'T KNOW when the prospect will respond. Now that they have the offer, they can stall you for several weeks, to see if the urge to close the deal pushes you to lower the price.
  

My advice: make your offers ORAL only

Golden rule #2 of business negotiation: You should not negotiate by e-mail

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Golden rule #3 of business negotiation: You must prepare each negotiation as if it were a one-off!

Creating the right commercial negotiation framework

1/ A commercial negotiation must be prepared. Before starting the conversation, make sure you are clear about your objective, your arguments, your possible fallback positions and your red lines.

Also spend some time putting yourself in your prospect's shoes. What might their objections be? How can you overcome them?

In short, prepare your exchange and your negotiation method, considering all possible scenarios for each phase of the conversation.

2/ Then make sure you are going to talk to the right people. That is, the decision-makers. Don't waste your time debating with people who will tell you after thirty minutes "OK, thanks for these elements, I'll talk to my manager". This will lead to depression.

On the other hand, be aware of your own control. Your prospect may play on your nerves by creating imaginary deadlines or asking the same question three times. Think Zen, think yoga, think Buddha.

3/ Finally, avoid lies and dishonesty. Don't slander your competitors. Your reputation depends on it. In the short term, it might work, but it would be a one-shot deal... You're a good person, okay?

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And above all... the right frame of mind

One of the reasons there's so much anxiety around negotiation is that we often tend to define it as a boxing match where we put on our gloves, climb into the ring and have to knock out our opponent.

There's also a misconception that negotiation is all about using unstoppable arguments and being a master of pressure tactics to get the other party to give in.

The aim is not to have a winner and a loser. On the contrary.

In a negotiation: both sides have to agree on a deal. So to get there: just listen to what your prospect wants. Think of it as a time to brainstorm and come up with a solution together with your counterpart. In the end, a good negotiation can even strengthen your bond with your prospect.

In short: forget your old-fashioned Manichaeism and adopt a Tao attitude.

"We all stand to gain from signing this deal... So what do we do?"

At Modjo, we like to ask ourselves the following question: how do we create win-win situations with our customers?

This is a question that drives us to innovate in our trade negotiations. Our objective is to bring them to a satisfactory conclusion for both parties. For example, we may be prepared to grant a 10% discount if the prospect makes a longer commitment or recommends us to interesting companies.

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Conclusion: How to manage a commercial negotiation?

💎 A golden rule. Email is a good tool to communicate your price ranges, but NOT to make an offer.

📝 A negotiation must be prepared: define your objectives, your red lines, script your answers to the prospect's objections.

👌 Don't get caught up in the stress: it often feels like our client will turn their back on us. In reality, this almost never happens.

🚀 And above all, get into the habit of seeing business negotiation as a great opportunity to create healthy and productive business relationships. It's not a fight. It is a collaboration.

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Best.

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