Thursday, October 22, 2020

Three Classic Negotiating Mistakes

Guest post by Clint Babcock:

Recently I was teaching a class on negotiation for salespeople. I set up a buyer–seller role play scenario and I asked two participants to work through the scenario in front of the rest of the class.  Both were provided with the pertinent information they needed to secure a good deal; all they had to do was negotiate the price.  I specifically narrowed this role play down to this one issue; neither one of them knew what they were selling.  Such a scenario allows participants to focus on how best to work through the money issue.

The point of doing an exercise like this is not the end result.  It’s observing the process that people go through, the great moves they make and/or the mistakes they fall prey to. Analyzing the process used is what creates learning and growth opportunities for everyone, including the observers.  Whenever I do an exercise like this, and lead the discussion afterward, I’ve noticed that there are three mistakes that always seem to present themselves. As I predicted, all three showed up during this role play.

Mistake #1: Talking too much. This is the single most common mistake. Salespeople, I’ve noticed, tend to defend and justify their solution, apparently under the impression that the more they say, the better the solution looks. They pile on the features and benefits of working with their company.  As you might imagine, the stream of words they unleash gets them nowhere, because the prospect already knows all of this. If they didn’t, why would they be negotiating? A better approach. Don’t talk about your features and benefits. Focus on the pains that your solution will solve by asking questions about how they see the solution solving their problems.  Become inquisitive and curious as to their position; keep in mind that the more information you uncover, the deeper your understanding of the situation will be – and the better positioned you will be to reinforce your position as the right choice for them.

Mistake #2: Offering or agreeing to concessions immediately. All too often, salespeople fail to recognize that they are even in a negotiation, and they volunteer a concession.  For instance: The buyer asks for a better price, or better terms, and the salesperson’s knee-jerk response is, “What were you looking for?”  Very often, we have not prepared for this all-too-predictable moment. We fail to process the reality that we may well be dealing with a strategic negotiator, someone who has prepared and planned for this negotiation and who has created leverage they can use against us.  Giving up something without getting anything in return is a no-no! A better approach: Instead of encouraging the other side to ask for concession after concession, do your prep work. Recognize that you will be in a negotiation at some point in your sales cycle. Identify what, specifically, you will ask for in return when someone asks you to make a concession. Hold onto concessions for as long as you can; don’t give them up until late in the sales or negotiation process, and plan to get something in return, such as a firm commitment to do business. Preparing ahead of time is the key to ensuring you don’t simply react, but instead respond appropriately to a request for a concession.

Mistake #3: Believing that money is the only issue. A lot of sales and business negotiations focus on money.  Remember: The best negotiations have little or nothing to do with money.  The best negotiation discussion is about finding the best fit solution. Yes, people want to pay as little for that solution as possible. But if we make it all about money, we both lose. A better approach. Even if buyers try to make the discussion about money, you need to stand your ground, and make it about solving their pains and issues with your solution. Yes, this takes practice! But what’s the alternative?

Most companies and sales organizations have no idea how often their teams make these mistakes during a negotiation process. Why? Because negotiation is rarely trained or practiced. What ends up happening after a long series of negotiating errors is that senior. leaders are brought into the process – because they know how to handle these situations.  This is not an efficient solution. With guidance and practice, salespeople can learn to avoid these common mistakes.

Clint Babcock is the author of NEGOTIATING FROM THE INSIDE OUT: A Playbook For Business Success. A Sandler trainer based in Florida, Babcock has over 25 years of sales, leadership, and negotiation experience; he has worked with senior executives at companies in a wide range of industries to help them strategically build their sales forces. For more information, please visit https://www.sandler.com/resources/sandler-books/negotiating-from-the-inside-out/.

1 comment:

The Midnight Overthinker said...

"Under the impression that the more they say, the better the solution looks". Wow, this is a great idea to keep in mind. I also find that I tend to overexplain myself, whether it be my thoughts and reasoning or my actions. This is a great reminder that less is more. Conversations feel more effective and productive when I feel I didn't say too much, because in reality that weakens the point.