A great sales process should include a great negotiation strategy - one that helps professional buyers fully understand the value and differentiation of each option. And one that helps them make the best decisions for their company. As a sales leader, you need to enable your team to prove the fit and justify the value of your offering in a way that allows you to preserve margin and charge a premium for your product and services.
When we talk about procurement and defining those professional buyers, it can sometimes cover a lot of different titles like procurement, sourcing, commodity managers and supply chain management. In some instances, it could even be the CEO, President or owner of the company. Regardless of the title, what’s important to remember is that professional buyers are critical influencers in every deal. Because their participation is a signal that a company is seriously considering doing business with you, your negotiation strategy should enable your sellers to:
- Create strong alliances with professional buyers
- Integrate your approach into every buyer-focused sales conversation
- Expand the potential value your reps bring to the table in every deal
Behind every great deal that closes, there’s a great sales leader who is focused on aligning a negotiation strategy around the following four best practices:
They understand the difference between negotiating and negotiation.
That may sound like a play on words, but it's reality. There’s a distinct difference between how most organizations treat negotiation with another party formally, versus the way it plays out informally. Leading organizations understand this difference and enable their sellers to start the negotiation process before the "formal" act of negotiating begins. Smart leaders recognize that there is an incredible advantage to both sides if you approach negotiation this way.
They create value before they divide it.
Great sales leaders recognize that the critical sales skills they enable within their sales organizations will play out over the life cycle of customer engagement. Selling is about value creation; negotiation should be about capturing that value and carrying it with you throughout the sales process.
The back-and-forth exchange your sellers have with professional buyers should be relative to creating more value, as opposed to mandates for concession on price. The goal here should be for your sellers to capture fair returns for the value they create.
Their leaders agree on what a great deal looks like.
If you’re going to ask your sellers to go out and negotiate great deals for you, then the leaders within your organization need to be in alignment around what a great deal looks like. Without this alignment, your internal negotiation challenge may be bigger than the challenges they're having with their customer negotiations. Getting everyone aligned internally, securing approvals, and ensuring all interactions with the customer follow your negotiation strategy are things that consume a lot of seller time and focus. Defining what a great deal looks like and operationalizing it within your sales process and your organization is critical.
They don’t stop negotiation when the deal is done.
After you close the deal, negotiation doesn’t stop. Negotiating on value allows you to leverage all the good work your sellers do every day. Unless you’re a 'one and done' business, your negotiations practice should continue during implementation and utilization of your product and services, setting a firm foundation for your next sale with the customer. It's also a critical success factor in managing your ongoing customer relationships.
As a company, your negotiation strategy should embody your growth strategy. Whether your growth strategy includes saas, new products, penetrating a new marketplace or a new vertical, your negotiation strategy should be able to operationalize those goals. Lastly, a negotiated agreement doesn't do any good if it doesn’t help your customers get closer to the ultimate outcomes they are trying to achieve.
The best negotiation strategies are about implementing a common framework for negotiation across your entire organization and getting credit for the value your solutions create.
Learn more best practices for driving a successful negotiation strategy in our on-demand webinar