By Mark Sallows
Sales negotiation skills help you to agree on the terms of a deal as part of the B2B sales process. It occurs after the sales pitch has been delivered and any objections have been resolved. Having well-honed sales negotiation skills can make a huge difference to a salesperson’s win ratio and the price they close deals at.

In this article, I provide 19 B2B tips, which will help small business owners and their sales reps win more business at the right price. I recommend reviewing them all to see if any of these could hone your sales negotiation skills.


1. Do Your Homework

Doing your homework is a vital sales negotiation skill that underpins your success. You can’t make smart decisions without some prior knowledge about your future customers.

For instance, you should ask your prospective customer early in the sales process what they are currently paying for the product or service you are replacing. It will help you gain a deep understanding of the value they derive from the solution. For example, if you are selling insurance, what is the cost of peace of mind for a premium quality insurance policy?

Before entering a negotiation, make sure you have:

  • Covered all your prospect’s concerns and objections: If you have not, then discussing price will only be counter-productive. At best your prospect will ask for a significant discount to account for the fact that they view your solution as flawed.
  • Developed a clear understanding of the value of your solution to your customer: I would go as far as to ask them how much they could afford to budget for solving their problem, though I would do this earlier in the sales process, way before entering price negotiation.
  • Found out who your likely competitors are going to be and what they charge for providing a similar solution: Your prospect may well be considering proposals from your competitors too. I would recommend asking early in the sales process who else they are considering as a potential solution.
  • Decided on the bottom-line terms you are prepared to accept from the negotiation before entering it: It’s easy to give concessions in the heat of the moment, but being clear about the extent to which you will discount price and/or provide free add-ons before you start negotiating will ensure each deal you close is profitable.

The salespeople who consistently leave money on the table fail to prepare as well as they could have prior to entering negotiation.


2. Know The Industry Standards

Every industry and customer has its standards, and a sales rep with good sales negotiation skills makes it their business to be aware of them. For instance, if you are trying to sell software to Fortune 500 Companies and you do not recognize their standard data security protocols or you have not earned the right to close the deal.

Unspoken norms also underpin most sales negotiations. They serve as benchmarks for acceptable terms or methods of negotiation. For example, if you are selling to a quoted company committed to social responsibility, they are likely to check whether your business is a responsible employer before considering entering a supply partner relationship.

Your advance work should involve putting in place the standards required to earn the right to compete effectively for the business. Excelling in key standards can become the added-value that tips the negotiation in your favor when all other factors are equal.


3. Use Silence

Silence is one of the most effective sales negotiation skills. You’ve presented the terms, and your prospect is thinking. Don’t be tempted to break the silence and undermine yourself. They need to be the one to start the conversation. If you interrupt the silence, the only message you are giving is that you don’t have complete confidence in your product or service. So let them start the conversation.

Silence is a powerful weapon in sales negotiation. The best sales negotiators listen more than they talk during the negotiation too. They understand that asking the right questions is what gives them control and the information they require to make more effective decisions during the negotiation.

You can become an effective listener by allowing the other person to do most of the talking. Follow the 80/20 Rule; listen 80% and talk only 20% of the time. Encourage your customer to talk by asking lots of open-ended questions that help you understand their thought process.


4. Be First To Drop The Anchor

When selling a solution, it’s on you to present price and terms first. This is an advantage if you have done your homework and already have a good idea of the price and terms your customer is likely to accept. It also gives you the advantage of setting the price anchor; your future customer will need to gain concessions from you to move away from it.

If you have a good feel for your customer’s price, make an offer that’s just above this. However, this tactic is risky if you do not have a good understanding of your customer’s price and terms expectations. Good sales negotiators always test price and terms during the sale so that they know how to pitch terms confidently when they enter price negotiation.


5. Provide A Simple Justification

You might think that providing a detailed justification for your price would be more effective than just providing a blunt price, but this is incorrect. A weak justification is far more effective.

For instance, if you were to present price and terms and simply say, “this represents very good value for money” rather than “this represents very good value for money because x, z and z,” the first justification is far more likely to be accepted. This is because you do not providing them with enough information to generate any counter-arguments.

This was first discovered by negotiation scholars in 1978 when they conducted an experiment to use a photocopier at work. A researcher approached someone who was about to use a copier in a university building and asked to cut in to make copies. They learnt that providing little justification was much more likely to result in a positive outcome. Psychology Today wrote an interesting blog post about this if you’d like to learn more. This is one of the reasons that e-commerce sites provide pricing options and simply state “most popular” or “best value” next to the price they want customers to select.


6. Provide 3 Offers

One of the key sales negotiation skills is to learn more about your customer’s preferences is to offer them different options to emphasize key elements of the deal. The offers should be of more or less equal value to you. According to the reactions you get, you can refine the options and suggest a fresh set of offers. This approach, if delivered well, generates goodwill as you are seen to be willing to flex to your customer’s needs.

Providing three alternatives is important. Less than three and the customer feels restricted. More the three and the degree of choice starts to create too much complexity that can then result in confusion and indecision. This is based on extensive research in both real-world and online sales. This is why the best e-commerce sites provide three pricing options.

Sales negotiation skills

Screen grab of MailChimp’s 3 option pricing plan, which demonstrates sales negotiation skills


7. Don’t Fall Victim To Customer Price Anchors

You are not always going to be able to make the first offer. Some customers will jump the gun to make you an offer.

To avoid getting anchored by their price, counter with what would have been your first offer regardless of the offer your customer has made. In other words, focus on their realistic price expectations rather than the way they have opened price negotiations ahead of you. Be confident and calm, though if your counter-offer differs significantly then you may need to be prepared to lighten the atmosphere with a joke.


8. Always Counteroffer

Another of the key sales negotiation skills to master is always to counteroffer. Even if your prospective customer makes you a great first offer, make a counteroffer and negotiate out the details. They need to work hard or there is a danger that they will not feel as if they negotiated a fair deal and they may come back to seek further concessions before formalizing the deal.


9. Give & Take

Whenever you are forced to make a concession, make sure your opposite recognizes that you have done so by clearly identifying when what you are giving up. Then, try to make each concession balance with something the customer can do in return. If you don’t do this, the customer will feel entitled to your concession and won’t be satisfied until you give up even more.

Give and take is one of the basic principles underlying good sales negotiation skills. This is because it’s a basic ingredient of what most people consider being fair, which can be used to your advantage if you do not exceed the value your prospective customer can see in your solution. By keeping the negotiation a win-win for both sides, you can maintain a level footing with your customer, which is a good base for a long-term relationship.


10. Utilize Seating Arrangements To Make A Fair Deal

Sales reps with advanced sales negotiation skills, understand that negotiating across a table tends to generate a more competitive atmosphere, which is not helpful. Try to avoid this by sitting around the corner of a table or moving totally away from a table to create a more naturally collaborative environment where you can work together to complete a fair deal.

Negotiation skills

Sales negotiation skills also encompasses the environment within which you hold your discussions

Try to meet face-to-face if at all possible as this will make it much easier to develop and protect the relationship, pick-up on your customer’s body language and avoid a competitive atmosphere. If distance makes it impractical to meet in person then try to use video conference rather than the phone for the same reasons.

Read more at FitSmallBusiness.com.