The first skill we discussed is teaching your reps to prove value. If you missed that post, take a look here.
The second key skill is negotiation.
You’ll often hear sellers say, “he’s just a good negotiator,” as if it’s something people are born with and you either have it or you don’t. Nothing could be further from the truth. All sales reps can be trained to be great negotiators. Here’s what they must know:
Have a negotiation plan – you must be prepared for a negotiation – you can’t just “wing it”. Before walking into any closing meeting, sellers should assume that the buyer is going ask for price concessions and have a plan in place to respond.
Know your floor – calculate the lowest price you’ll go in order to preserve margin and revenue opportunities for you and your company.
Push back – remind your buyer about the agreed-upon value of your product and/or service and ask if anything has changed, or if they’re prepared to deal with the cost of not moving forward.
Offer other concessions – be ready to offer your customer other concessions that aren’t related to price, things like extended warranty, training, a dedicated service rep, etc. These offer your customers value without eroding your margins. But…if you do offer something, be sure to ask for something in return. What can your customer give you? Think about things like exclusives, referrals, testimonials, etc.
Be prepared to walk away – there are times when a buyer will not move forward without unreasonable discount requests, and good sellers must be prepared to walk. This can be especially hard in Q4, but it is essential to upholding the value of your offering. Tell your buyer, “I’m not going to be able to offer you the discount you’re requesting. But, what I would like to do is take some time to think about our conversation today and get back together next week.” Sometimes knowing that they’ve pushed you as low as you’ll go is all a buyer needs to move forward.
Practice – as with all skill development, practice is key to mastery. Role-play negotiations with your reps to get them prepared for big meetings. Have them practice pushing back and offering non-price concessions in exchange for something of value to your organization. The more they practice, the more successful they’ll be when they go to close business.
In summary, Q4 is upon us. It’s time to focus your team on proving value and smart negotiating in order to help them avoid discounting and maximize revenue achievement.