In any sales negotiation, there are a lot of moving parts to juggle. Even if you have the best intentions, it’s easy to get distracted by the wrong things and make fatal negotiation mistakes. This checklist is designed to help you sharpen your focus and hone your strategy as you approach the negotiation table.
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Prepare a Negotiation Cheat Sheet
Most people prepare for negotiations the wrong way. They spend hours researching their counterpart and come to the table armed with trivial facts and figures to justify their logic.
Although knowing whom you’re up against is never a bad idea, memorizing information won’t help you create a better deal. In fact, your research can distract you from the real live person in front of you and cause you to make assumptions—a dangerous thing in any negotiation.
Contrary to popular belief, it’s possible to learn almost everything you need to know about your counterpart in the negotiation itself. Rather than preemptively gathering information, focus on translating what you already know into an actionable communication plan.
Contrary to popular belief, it’s possible to learn almost everything you need to know about your counterpart in the negotiation itself.
Start by preparing three to five (negative and positive) labels to perform an accusation audit and get out ahead of any negative perceptions. Next, come up with three to five calibrated and no-oriented questions designed to identify your counterpart’s fears, locate potential deal killers, and uncover items of unequal value.
Before you begin that first meeting, remember to set your sights on the short term. At this point in the conversation, you shouldn’t be focused on signing a deal or how that deal will look. Instead, focus on hearing your counterpart out and establishing a communication based on mutual understanding. Your end goal should be to make it to another meeting.
Need more guidance on how to prepare? Use our Never Split the Difference Study Guide.
Uncover What You Don’t Know and Build Rapport
Most of what you need to know in a negotiation can be learned by listening with tactical empathy. Rather than giving a sales pitch, think about how you can encourage your counterpart to open up to you.
If you can get your counterpart talking, you’ll gain insight into their perceptions, fears, history, and perspective.
Channel your emotional intelligence and situational awareness to pick up on the subtle cues your counterpart is giving you. This awareness will help you determine what type of negotiator you’re up against and communicate to their standards.
Use mirrors, summaries, labels, and calibrated questions to demonstrate understanding and confirm your counterpart’s core drivers. You’ll know you’ve understood correctly when you hear a “that’s right” (not to be confused with “you’re right”).
As you attempt to build rapport, don’t overuse someone’s name or go out of your way to pry it out of them. Contrary to popular belief, overusing someone’s name in a negotiation won’t make them like you more.
In fact, it can cause them to feel attacked and resentful—and render them incapable of hearing you out. If you’re in a situation where names haven’t been exchanged, say your own name, but don’t ask for theirs. As a rule, people will respond with their own name if and when they feel comfortable doing so.
Rather than giving a sales pitch,think about how you can encourageyour counterpart to open up to you.
Get Out Ahead of Negative Perceptions
In sales you are always fighting uphill battles because a majority of the population distrusts salespeople. When they interact with a salesperson, they expect a “used-car salesman” pitch, and they mentally prepare themselves to reject it.
Rather than denying that these hurdles exist, it’s in your best interest to embrace them and address them early on in the negotiation. Build this knowledge into your approach by being preemptive with empathy. In short, take a cold read and conduct an accusation audit.
Put yourself in a position to verbalize what the other side deems to be true whether positive or negative. They may feel that your outreach is unwanted or a waste of their valuable time.
As soon as you switch into your friendly sales voice, they may assume that you have a hidden agenda, or they may simply feel that you don’t understand them and have their best interests in mind. And how could you? You haven’t established a relationship or earned their trust.
Before you can build understanding, you need your counterpart to lower their guard and let you in.
The worst thing you can do is tell someone you understand them before you’ve made an effort to do so. If you have a generic sales pitch prepared, you’re assuming that every prospect is the same and thereby confirming all their negative assumptions about you.
Addressing negatives early on will help you reduce their power over the negotiation and disarm an attack before it occurs. Opening with empathy is also jarring and will cause the recipient to give you more thought than they may have intended walking in the door.
Don’t Try to Close Too Quickly
If you work on commission, you may feel the urgency to close straight out of the gate. Which makes sense because your livelihood, company rank, future prospects, and confidence are directly connected to the next closed deal.
You have quotas to reach, deadlines to hit, bosses to satisfy, and bills to pay. But jumping to the solution part of the negotiation too soon will undermine your chances of getting what you want. It may also create a bargaining dynamic that is difficult to break. Contrary to popular belief this approach also means your emotional axis is off kilter.
Every negotiation requires a three-phased approach. Each phase demands at least one separate conversation, but isn’t always confined to one. If you’re trying to lock in a commitment in anything less than three meetings, you’re rushing it—and your counterpart is feeling that pressure.
If you’re trying to lock in acommitment in anything lessthan three meetings, you’rerushing it—and your counterpartis feeling that pressure.
In phase one, your focus should be on building a relationship and gathering all the information you need to communicate more effectively. You can begin to use that information in phase two as you address your counterpart’s fears and work to demonstrate understanding.
In this second phase, your goal should be hearing “that’s right.” It’s not until the final phase that you should even begin to touch on the deal itself. Phase three is about addressing implementation, planning for the “what ifs,” and earning buy-in from behind-the-scenes deal killers.
Know How to Make “No” Work for You
Contrary to what’s taught in sales seminars, getting a “small yes” won’t necessarily lead to a “big yes” down the road.
In fact, driving for a “yes” can make your counterpart feel like they’re being led into a trap—a technique that lawyers affectionately refer to as “cornering.” By taking away someone’s ability to say “no,” you inadvertently undermine their sense of autonomy and control. When this happens, they put up their defenses and shut down their comprehension faculties.
On a practical level, asking yes-oriented questions also makes it difficult for your counterpart to correct you and expand on what they mean. This, in turn, makes it harder to understand the pictures in their head. It can also lead to a “counterfeit yes”—an insincere form of agreement intended to get you off their back.
Driving for a “yes”can make your counterpart feel like they’re being led into a trap.
Rather than asking questions you already know the answer to, focus on demonstrating understanding and establishing a collaborative and comfortable environment. To do so, change the structure of any “yes” question you feel the need to ask to give your counterpart the “right to veto.” Take the following examples:
Is that right? (Yes-oriented) → Did I miss something? (No-oriented)
Do I have that correct? (Yes-oriented) → Am I wrong in saying X? (No-oriented)
This subtle change can have a huge impact. No-oriented questions give your counterpart the opportunity to expand giving them the feeling of being in control.
Framing a question in this way also opens you up to correction. By admitting fault, you make it easier for others to tell you exactly where and how you went wrong. People love to correct—no-oriented questions give them an excuse to indulge their natural impulses. They also encourage openness, engagement, and collaboration (all things that will help you gain buy-in).
Before you enter into a negotiation, understand the power of “no” and how to use that power to your advantage. There are countless low-stakes practice opportunities to use these skills in your daily life if you’re willing to take notice.
Learn the Distinction Between Value and Price
In any deal—no matter the size—there’s always more than just money at stake.
Rather than obsessing over decimal points and dollar signs, focus on discovering what things you and your counterpart value unequally to expand the negotiation pie.
The best way to do so is by exploring options rather than presenting solutions. Price is an expression of value, but they’re not one and the same. Just because a prospect won’t budge on price doesn’t mean they won’t negotiate other terms. For instance, you may discover that they value time more than money, and that they’re willing to pay more for an expedited timeline.
On the flip side, they may be interested in only one of your services and would be willing to pay less to get less in return. Appraising those levels of unequal value will encourage your counterpart to collaborate on the solution and will expand your negotiation possibilities.
Price is an expression of value, but they’re not one and the same. Just because a prospect won’t budge on price doesn’t mean they won’t negotiate other terms.
When you finally address price, it’s important to set clear expectations for your counterpart. Remember that price is an emotional term. As a salesperson, you’re probably already familiar with the emotional reaction that your price point triggers—it’s what you brace yourself for every time the number slides off your lips. If you know what response is coming, then you can use that knowledge to your advantage.
If you’re expensive, set the expectation of being so. When you lead with a statement like, The price is going to catch you off guard, you set clear expectations and take away their permission to be shocked or defensive. As you prepare for a negotiation, conduct an accusation audit for your price point to stay one step ahead of the game.
Many salespeople offer discounts as a last-ditch effort to save what they may feel is a sinking ship. If you find yourself in this position, chances are you missed an essential step along the way. Fight the impulse to correct with dollars and rewind to where you went wrong.
In some cases, you may find that the prospect in question simply isn’t someone worth doing business with. It’s hard to know the difference between a bad-fit lead and a faulty negotiation unless you take the time to uncover what you don’t know.
Close with Implementation
Implementation is the most widely overlooked aspect of sales negotiations. The irony is it’s also the most important.
At the end of the day, people buy the person and not the product. Once money exchanges hands, however, the customer may never speak to the same salesperson again. If there’s no cohesion between the sales team and those responsible for implementation, relationships will suffer, and deals will fall flat in the long run.
As a salesperson, you’re responsible for preparing the client for that internal transition and setting accurate expectations on both sides. If you let your counterpart get blindsided, it will have negative ripple effect throughout your organization.
At the end of the day, people buy the person and not the product.
In the final negotiation phase, discuss how implementation will look once you conclude the negotiation. To identify inaccuracies and address potential challenges before they become full-blown problems, ask “time travel” questions. These questions are named for their unique structure, which forces people to imagine future events.
If x happens, how should we handle it ... ?
When x happens, what should we be prepared to do ... ?
As you ask questions, don’t forget about the deal killers (DK). The DK is even more important than the decision maker (DM) because they have the power to squash a deal before it comes to fruition. Many DKs are also “silent”—they’re not present or vocal during the negotiation process.
It’s much easier to walk away from a vendor than to handle internal problems. Rather than waiting for a deal to dissolve internally, attempt to bring DKs to the negotiation table as you discuss implementation. To do so, ask calibrated “how” and “what” questions that require their team to communicate internally.
What is your process for coming together as a team to figure out how to move forward?
Finally, remember that strong, lucrative partnerships are built on strong, human connections. In other words, don’t use your understanding of your counterpart’s fears to force a deal or make threats. If you force a fit (or push a compromise they’re uncomfortable with), you’ll create an enemy and end up sabotaging the deal before it can be implemented.
Cold calling is such a staple in the sales world that it deserves its own aside. If you’re starting a negotiation with a cold call, there are three additional factors to keep in mind.
1. Scrap the 30-Second Sales Pitch
When you launch into a 30-second pitch, you make three dangerous assumptions right off the bat:
- You assume they want to talk to you.
- You assume that they care about what you have to say.
- You assume that they’re going to remember it.
Similarly, if you take the approach of educating the customer, it can come off as insulting and aggressive. Most people do their research and start their buyer’s journey long before speaking to you. They may even be 70 percent sold—don’t give them a reason to walk away by making a bad first impression.
It’s also likely that your counterpart has bought what you’re selling before or has had some past experience that they feel is relevant. This is true even if you’re selling a new product. If you remember nothing else, remember that vision drives decision.
If you don’t account for the pictures in your counterpart’s head, then you won’t be able to influence their decisions. Get them to talk about past experiences and expectations by asking calibrated questions. Then, use labels to both demonstrate and confirm understanding.
You: What problems have you had in the past? (Calibrated question)
Prospect: We’ve been screwed over by companies like yours that talk a big game but don’t deliver when it comes time to follow through.
You: It sounds like you’ve had a bad experience with this before. (Labeling language)
It sounds like you have a good reason for why this makes you uncomfortable. (Labeling emotion)
People aren’t going to remember a pitch—they’re going to remember you and how you made them feel.
2. Play the Short Game
When you’re cold calling, it’s also important to play the short game. People aren’t going to remember a pitch—they’re going to remember you and how you made them feel. Think about what it would take to make someone feel comfortable with you and feel like they had a good interaction upon hanging up the phone.
Your likeability is not informed by how charming or chatty you are; it’s based on your ability to understand your counterpart and make them feel understood. To get to that point, think about how you might communicate to get them to reveal their unfiltered thought process.
3. Don’t Discount the Gatekeeper
Oftentimes, cold calls will be fielded by personal assistants, secretaries, family members, and other individuals who play gatekeeper to the decision-maker (DM). Because these people aren’t whom you’re trying to connect with, it’s easy to write them off or try to steamroll them to gain access to the DM. But gatekeepers have much more power than they’re given credit for.
They were put in place by the DM to manage their lives, and they typically have influence over how the DM constructs their day. As such, they can become an invaluable ally or an immovable roadblock.
Rather than calling and asking the gatekeeper to pen you into the DM’s calendar, encourage them to problem-solve with you using these proven tactics.
At Black Swan Group, we like to say that you don’t rise to the occasion; you fall to your level of preparation. To truly make these skills second nature, practice is paramount. We offer a variety of training options to help you internalize these negotiation tactics and hone your technique. Contact us today for more info or click here to get to know our team.