Almost everything in life is a negotiation. And we are constantly negotiating, from the moment we wake up till our head hits the pillow at night… even when we don’t realize it.
You negotiate on whether you hit the snooze button or hit the gym today. You negotiate with your wife about where to eat dinner. You negotiate with your kids about bedtime and homework. Planning a vacation. Buying a car. Salary discussions. Everything is a negotiation.
That’s why learning how to negotiate — and how NOT to negotiate — will dramatically improve your chances of succeeding, in sales and in life.
But what if I told you that you can make an extra $100K in sales commissions this year simply by avoiding common negotiation mistakes? Would you believe me? Or would you negotiate in your mind to ignore me and go about your day?
It’s entirely up to you, but this article has all the potential to make you rich if you follow the simple plan I lay out. So let’s get right into it.
RELATED: Master Cold Calling to Make Millions
Negotiation Mistakes to Avoid At All Costs
1. Offering Discounts Too Early (or at all!)
The moment you drop your price or offer a discount, you undervalue your product. It sends a strong psychological signal that your product isn’t worth its asking price. And that has huge implications on whether your prospect buys or backs out. It’s best to never offer a discount. But if you must slash prices to sweeten the deal, do it later, preferably when you close.
One time a prospect asked me for a discount on a $5K/mo offer because the price was too high. So I said the price isn’t $5,000 a month, it’s $60,000 for the first year… because by implementing our product you can make $250,000 over the next two years. This is high-ticket value. So don’t be afraid of a high-ticket price. Get it?
RELATED: NLP In Sales — Effective Cold Calling or Unethical Hypnotism?
2. Not Asking Plenty of Questions
Think of a hostage negotiation. The negotiator must get the captor to talk. This way they can learn his motive, desire, weaknesses, strengths, etc. In the same way, you can only negotiate to a favorable result when you ask your prospect questions and then listen empathetically. The mistake I see all-too-often is salespeople running their mouths for 20 minutes straight, usually out of anxiety. So a good tip here is to relax and control your heart rate and breathing when cold calling.
3. Forgetting to Sell VALUE, Not Just ROI.
This tip is so important that I wrote a whole article on selling value, not ROI. And look, I understand that if you can promise a healthy ROI, by all means sell it! But if not, you should focus on value — which is ROI + intangibles like, say, the ability to break into new markets, white-glove service and tech support, and having a true partner in your corner who desires your long-term success. Don’t sleep on these things — they’re priceless!
4. Failing to Identify Decision-makers
You can’t win a negotiation — or come to mutually favorable terms — with someone who holds no power. No buying power = no deal. This is a sales 101, so I won’t spend too much time on it. Just be sure you’re following BANT when qualifying your prospects (Budget, Authority, Need, Timing). Do not get deep into a sales conversation and expect to convert a non-decision maker. It won’t happen. They don’t hold the credit card!
RELATED: 5 Ways to Know For Sure You Have a Decision-maker on the Phone
5. Not Answering the Deeper Questions (surface-level selling)
When negotiating, you also have to read your prospect. Are you talking to an analytical person who actually cares about the details of your offer? If so, you have to go there with them. You have to go deep. If you just skate on the surface with this prospect, you’ll leave too many unanswered questions in their mind. So I can’t stress enough how important it is to know who you’re talking to and how much, or little, they need to hear. This is where emotional intelligence (EQ) will pay dividends for you.
6. Going Too Deep (over-explaining)
Then there’s the other personality type — the type who could care less about all the fine print and details of your product or service. If you get into the nitty-gritty with this prospect, explaining all the features and specs and ins-and-outs, their eyes will glaze over and they’ll lose interest. So for these prospects, keep your language geared toward value, outcomes, and transformation to win in this negotiation.
7. Failing to Build a Meaningful Connection and Trust
Let’s revisit the hostage situation for a moment. The negotiator must build a meaningful connection with the captor. Doing so increases his odds of a favorable outcome. They might say, “I want to hear your side of the story,” or “Let’s figure out how to get you what you need.” And just like that, the person drops their guard!
Rapport and relationships really do matter — in hostage situations and in sales. People do business with people they trust. And people don’t do business with people they don’t trust. So remember this on your next call.
RELATED: The 3 C’s of Relationship Selling
8. Speaking Right After Asking for the Sale
They say that the first person who speaks, loses. You should always let your prospect say “yes” or “no” or otherwise show their hand. Whatever they say, it’s all valuable intel that you can use as leverage during the close. If you’re the one to speak first, it’s a not-so-subtle show of weakness. You are putting all the power in the prospect’s hands. This is tried and true sales psychology. So speak last if you want to win the negotiation.
9. Failing to Prepare
Never enter a negotiation or sales call unprepared. If you do, you might as well kiss the deal goodbye. I know this sounds obvious, but you’d be surprised how many salespeople don’t do their homework on their prospect. Just 3-5 minutes of Googling and LinkedIn research is better than nothing. This way you’ll be able to speak their language, have something to contribute to the conversation, offer tailored advice to their situation, and maybe even find some common interest or hobby that you can bring up.
10. Being Afraid to Walk Away
You don’t need the sale. You want the sale, but you don’t need it. The moment your prospect senses that you need it, you’re done. Every deal should be mutually beneficial, a two-way road. If you’re unwilling to walk away, you’ll be sniffed out as something I call a “sweaty-palm salesman.” And that stench will stick to you! So don’t be afraid to walk away from the negotiation if the terms aren’t favorable. There are other deals to win, not to mention there’s your dignity to keep.
RELATED: How NOT to be a Sweaty-Palm Salesman
When you pick up the phones, you have to remember your position of authority. You are a trusted advisor, not a salesperson. You are a force multiplier, not a cold caller. You are here to broker deals, and the exchange of goods or services for money is always to your advantage and your prospect’s advantage. Remember, every good deal is a win-win!
So don’t overthink this — just steer clear of the common mistakes I’ve highlighted above, and you’re golden.
Until next time…
Johnny-Lee Reinoso