Are You Negotiating Away Margins?

I recently met with a business owner who wanted to know how I trained salespeople in “negotiation.” After a little questioning, I was really struck by his misconception that their salespeople SHOULD be negotiating, which in layman’s terms is lowering price or offering some concession in exchange for a promise to buy.

Trusted advisors and top salespeople do everything they can to AVOID negotiating. Their job is to uncover the costs of the prospect’s problem and then to determine what budget is available to solve it BEFORE they propose a solution. The predominant problem many sales people have is that they simply aren’t comfortable talking about budget and cost impacts until the end of the sale. So they are forced to negotiate at the end, attempting to close the sale in spite of inadequate financial information.

Salespeople who rely on negotiation at the end of the sale usually exhibit these symptoms:

• Think that buying is primarily an intellectual process, not an emotional process

• Don’t understand the costs associated with the problem or what’s at stake financially early in the sales process

• Feel the product or service they sell is extremely expensive

• Are uncomfortable talking about other people’s finances

If you have salespeople that regularly require permission for a reduced price to get the sale or blame the competition’s price after losing the deal, look to the symptoms above to gain insight into the attitudes that drive these behaviors and outcomes. Please understand that I’m not saying that top salespeople NEVER need to negotiate. The point is to differentiate the strong salespeople who rarely need to negotiate from the weak ones that must negotiate every time to close a sale.

Examine the beliefs and behaviors of your salespeople when dealing with money issues, so they can minimize the need to negotiate at the end and sell more, more often!