Four Negotiation Skills to Arm Your Sellers with Right Now
Today's sales environment is highly competitive. Rising economic headwinds mean that many buyers are adopting more complex purchasing processes, and sales organizations are looking for any way to preserve vital margins. As a sales leader, you don't want your sellers resorting to discounting to close deals in this environment.
If your sales team is challenged with losing margin in key negotiations, it’s often very apparent once you hit the end of the quarter. To achieve an accurate forecast and hit revenue goals, it's crucial that your team is prepared to negotiate competitively in this environment. Enable your sellers to elevate their sales conversations away from price with a strategy that enables value-focused negotiations and consistency across your sales teams.
Here are four negotiation skills to arm your salespeople with right now:
1. Ask Great Questions to Uncover Business Pain
A good negotiation strategy starts with great client discovery. You won’t be able to preserve your margin if your rep hasn’t effectively aligned the solution with business pain that is most urgent for your buyer in this moment. By nature, sales reps have a tendency to skip over uncovering the negative consequences of a business problem and jump right to offering their solution.
While negative consequences can be more uncomfortable to navigate in the sales conversation, it’s important that your reps are equipped with the techniques needed to build a case for validating a premium price. That case starts from the beginning of the sales process.
The final stages of negotiation are not the place to assess your value. If your rep waits until the tail end of the sales process to start communicating value, they've given away valuable leverage. Your buyer wants to pay less, and they know you've got quotas to make. They will use that information to the best of their ability to get a discount, particularly in a budget-conscious economy like the one we're currently facing. Without a solid foundation of value built throughout the discovery process, your rep is now stuck in a price-only negotiation. Here are some resources to share with your reps and managers on executing great early negotiation.
2. Articulate Value and Differentiation
Once they have a great grasp on effective discovery, you need to give your reps the ability to articulate value and differentiation in a way that has meaning to the buyer. How many sales trainings have you attended that focus on every new feature and function of the product? Although important, those widgets don’t mean a thing unless your buyer can envision how they affect the positive business outcomes they want to achieve.
Too often, sales organizations leave their reps to make up this connection themselves, creating buyer confusion and inconsistency in the sales message. Provide your reps with the ability to map your solution to buyer needs by building cross-functional alignment around these essential questions:
1. What problems do you solve?
2. How do you solve those problems?
3. How do you do it differently than the competition?
4. What’s your proof?
If you have tight company alignment on those four questions and the answers are meaningful to your buyer, it will be a lot easier for your salespeople to (1) negotiate on the value you can bring to the customer and (2) articulate why your solution demands a premium price. Without that clarity, you’re looking at a systemic problem of stalling, discounting, and losing out on deals in the eleventh hour because the buyer can't clearly identify the ROI of your solution.
3. Build a Sales Process That Enables Reps to Maneuver Through Multiple Decision Makers
Negotiations become more complex when there are multiple decision-makers and interests at play. Let's face it - every deal is complex nowadays. Economic concerns have heightened budget consciousness and buyer criteria. Your reps are likely dealing with multiple high-level decision-makers in every deal. They need the ability to map multiple interests to a list of required capabilities and positive business outcomes. Your sales process should define who does what in the buyer organization and when they do it so reps have a clear map to reach buyer alignment.
A qualification methodology like MEDDICC can give your reps an easy tool to account for key triggers in a sales process (e.g., decision process, metrics, champion, etc…). While these factors are important to align with buyers during their decision process, they also ensure that you minimize surprises in the final stages of the opportunity. For example, reps are highly likely in today's environment to encounter a CFO later in the sales process. Great qualification can help them anticipate these hurdles earlier and determine how they threaten or strengthen the deal.
It is critical that reps identify these stakeholders early and determine how instrumental they will be in the decision. If a CFO will ultimately have the final say, reps must engage them earlier in the sales process. Outlining his/her value drivers, required capabilities, and desired metrics in advance can help preserve margin and combat competition from a "do nothing" or "do it internally" decision. This conversation with Elastic CSO Michael Cremen on Revenue Builders offers insight on enabling reps to sell to CFOs.
4. Alignment on What Constitutes a Great Deal for Your Company
It is extremely difficult to manage a great negotiation strategy if your team is struggling with cross-functional and top-down misalignment. Efficient negotiation requires common language around what a great deal looks like, key indicators of success, and the value you provide.
What are the negotiable items that you are willing to accept in a customer negotiation? What are your give-gets? What are you not willing to negotiate on (your anchors)? When your whole organization is aligned on a common language around objectives and value, it becomes much easier to execute on the negotiation strategy. This ebook is a great place to start in driving alignment of your message.