Three Essential Negotiation Do’s and Don’ts

During our conversation on the Sales Reinvented podcast, host Paul Watts asked me what I considered to be the three most essential do’s and don’ts of sales negotiations. After 30+ years negotiating and writing books and articles about sales negotiation strategies, narrowing the list of negotiation opportunities and pitfalls down to three was a tough challenge.

Following are the three that first came to mind as I spoke with Paul, and upon reflection, they hold up as crucial to negotiation success. They are important because they relate to credibility (for both you and the company you represent) and your ability to accomplish the mission (e.g. making the sale), while creating and preserving a relationship that will get stronger over time. Practicing these common-sense approaches will always serve you and your team well.

  1. DO Listen more and talk less. Many sales reps are type-A personalities who are impatient and love to talk. Traditional thinking involves convincing the sales prospect through the power of your arguments. However, to be a successful sales negotiator, you must understand your customer and you cannot do so unless you listen well. Listening and patience demonstrate curiosity and compassion, and enable you to gather the information necessary to anchor your value proposition in the customer’s context.

    To improve in this area, purposefully slow your pace, talk less, and ensure that you understand what you hear from the customer. Then, if you politely repeat what they said, you will demonstrate that you care. Realize that you will always have the opportunity to make your value argument at some point. But first and foremost, you want your counterpart to feel heard and understood. Then their own willingness to listen to your value proposition increases.

  2. DO Prepare and plan — do not “wing it.” This is where agenda management comes into play. Even if you have limited time, you must use that time to prepare efficiently. In fact, when you lack time, it is more important to manage the agenda, yet we find that one of the first things to suffer when people are under time pressure is agenda management. This is the sales version of the famous Abraham Lincoln quote: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” The time you take to prepare will not be lost on the customer, and will enhance your credibility, as most customers will understand that you have done so despite a shortage of time.

    The opposite is true if you attend calls or meetings unprepared. It’s the equivalent of a pilot flying a new plane without simulator training. In dealmaking, while the consequence may not be life threatening, the result is damaged credibility and lost opportunity.

  3. DO NOT make arbitrary concessions. This means that you should not automatically concede to a request just because a customer asks, even if, theoretically you can make that concession. First, listen and ask clarifying questions (see point 1 above). Responding too quickly can be detrimental to one’s credibility and prolong the process. Instead, we should engage in a process where the moves we make have credible business rationales that the customer understands. We call this a principled concession process. This is the opposite of unprincipled concessions which can occur when a concession appears arbitrary – such as a discount given just because the customer asks (or, as we have sometimes seen, even without a customer asking).

    Unprincipled or arbitrary concessions can seriously damage your credibility. This is a negotiation inflection point and the way you react can keep the process on a path to success or one headed for failure. Customers, especially procurement organizations, make concession requests for a variety of reasons that include competitive pressures (yours and theirs) and other credible business reasons, as well as testing your resolve. If you make concessions where the business rationale is unclear such a concession will seem arbitrary, and the customer is likely to feel that you have more to give or lack resolve, either of which leads to continuation of the process and potential credibility issues.

    So, what is the alternative? It is to ask that simple but profound question: “Why?” This will help you uncover the reasons for their objections. Do they have legitimate competitive price concerns, are not sold on your value or are just fishing for a better deal. By searching for the “why,” you can develop the business rationale for a principled concession if a concession is needed or the rationale for holding your position, while giving yourself more time to craft the appropriate relationship-maintaining response. Perhaps that is a change in scope and outcome or an alteration of terms.

Employing these three strategies in your sales negotiations will generate more favorable results and create longer-term valued relationships with your customers!

For more information as well as resources you can use to improve every aspect of your business and sales negotiation process, please visit: