When a sales negotiation results in a less than desirable outcome for your company, there’s often one thing that’s missing. It’s likely there was a lack of realization that negotiation starts very early in the sales process.
Sales Negotiation Happens Early and Often
Value is defined differently for everyone. The value your organization wants to capture within the deal terms is going to be different than the value procurement is trying to preserve in their negotiation. That’s why salespeople need to understand the importance of involving professional buyers early in the sales process and create a shared definition of value. What does value mean to the buyer?
Determining exactly what your customer needs in a solution is a pivotal component to successfully closing a deal. Professional buyers have a set of a required capabilities for whatever purchase they’re considering. These are the minimum solution requirements that are needed to solve the business problem and achieve the positive business outcomes.
The earlier your salespeople start to define those requirements, the more often your sellers can directly tie your solutions to the critical success factors for accepting the deal.
Here are three reasons why:
1. They’re More Open to Discuss Business Implications
Key buyers or influencers are more likely to be willing to talk about their pain when they’re in the process of telling you what their problem is, as opposed to when they think you’re negotiating. If you start early, you’re more likely to garner the necessary knowledge that will help close a deal with great outcomes.
2. Time is on Your Side
When you aren’t pushing against the end of the quarter or the final stages of the buying process, you’re more likely to take time to listen and your professional buyer will as well. You can take the time needed to do the necessary discovery and align negotiation outcomes with the interest of all the stakeholders.
3. More Access to Decision-Makers
When you start positioning value early in the sales process, you gain access to decision makers. Those individuals who make important decisions don’t have a lot of time to have multiple sales conversations. When you start the negotiation process early, you have the benefit of increased access to decision makers to whom you can communicate value in terms of Positive Business Outcomes, Metrics and Proof Points they care about. It will also be easier to set expectations and define the requirements for closing the deal.
Justify Value to Mitigate Risk
The process of creating and capturing value early in the sales process allows you to effectively justify the value of your solution. When your reps clearly articulate how you create and capture value with your customer, actually begin to mitigate risk for the buyer. Procurement professionals care about mitigating risk. They’ll be more willing to pay more for a solution that’s less riskier than alternatives. If you can justify value in a way that’s tied to mitigating risk, you can charge a premium for your products and services.
Make sure your sellers stay focused on the two most impactful opportunities within the negotiation process (1) getting credit for the value that your solutions create and carrying that value into the final agreement and (2) ensuring that you not only reaching an agreement, but negotiate in a way that’s consistent with the long-term relationship you want to achieve with customers.
It’s difficult to do that when you begin negotiating late in the sales process. Without that time and understanding, it’s extremely difficult for a salesperson to negotiate to a great outcome.