The DriveSales™ | Looking for essential and key principles of sales negotiations? Here is the real story for you!

This is a real story that happened with one of the team members of The DriveSales™.

Today I got a call from a fellow trainer friend if I can conduct a 2-hour session with the procurement team of a multi-national organization. I asked if there is a defined objective the client is trying to achieve from this session? That will decide if I am the right person and if I can contribute towards the goal.

My friend said that the organization in the discussion has a very efficient negotiation process and is doing good in the market, but the CFO thinks that there is further scope of cutting the cost, at least by another 15%. They want a trainer who can train the procurement team during the session.

I told my friend that I am not the right person for it.

With a small pause, my friend asked, will it help if the 2-hour session can be of 4 hours or 1 day long.

My answer was still a “No”. I added that this objective for me is more of an intervention planning and not a training session.

Since this is fresh memory for me and negotiations are one of the most important skills of Sales, especially while dealing with a procurement team or client hence I thought to share my perspective on an open platform.

When it comes to negotiation, I see most people think of it in terms of cost discussions or number game. Negotiation has a lot of qualitative components added to it. For example, when we pin down our decision on the cost, we miss on added value like timeline, quality, the effectiveness, etc. of the solution. I am not saying here that the one offering the lowest cost will have the worst solution. What I am trying to make a point is that if the decisions are made only on the cost, other factors become a possibility of a best-case scenario, and with real projects and business goals, we want to be more than lucky.

The golden question here is, how would I have addressed such a client who is focused only on the cost. Let me take an example from the story I started with. The client XYZ says that my team members as of now make a deal at INR 100 and I just want them to bring it down to INR 85.

We would ask our client to choose out of the options given below (you can try too)

Option 1: Deal Closed by team member A at INR 100 in 2 hours with a defect rate of 10% (current situation)

Option 2: Deal closed by team member B at INR 85 in 4 hours with a defect rate of 10%

Option 3: Deal closed by team member C at INR 110 in 1 hour with a defect rate of 4%

Option 4: Deal Closed by team member D at INR 120 in 1 hour with a defect rate of 2%

Business situations might not have a simple solution as choosing an option from 4, but it does reflect that there are multiple variables at play and a good balance between these variables makes a smart and effective negotiator. This also depends on the industry the client is operating in. The options will dramatically change from the paper industry to the medical industry to the recycling industry.

To end, here are few points that we must take care of at our sales negotiations:

1) Connecting with the decision-makers at the highest level possible.

2) Risk on the business objective and its impact.

3) Time and energy allocation along with budget.

4) Make a sustainable relationship more than a deal.

5) Be ready to lose the negotiation by empowering the client partner.

Now, as an effective SALESPERSON! We can do three things from here.

1. Not ignoring the opportunity and blaming the situation for revenue loss.

2. Taking necessary notes and revisiting your sales strategy with a growth mindset.

3. Reach out to The DriveSales™ in case you need any specialized help.

To conclude, what you believe also provides some idea of your development as a consultative salesperson. For more, please be connected to team The DriveSales™ as these are the foundations for our culture and ways of working! Happy Negotiating!

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