Is Sales Negotiation Becoming Obsolete?

I had an epiphany last week.? I was doing a program for a Vistage group in Omaha, Nebraska (one of my favorite places to visit).? We were discussing sales compensation in the hiring process, and one of the group members recounted a recent story about a sales hiring attempt.? He had interviewed a young woman who was a blue-chip candidate, precisely the type of person we need to bring into the profession to reverse the demographic issue facing our profession.

He had gotten to the moment where he made the offer, and he did the strategy where he offers lower than he plans to pay, thinking she will counteroffer, and they’d meet in the middle, which is where he wanted to be.? She thanked him, said she’d consider it, and then called later and said that she was going to pass.? He was mystified, and then he recounted the story later to someone else, and they said, “Young people don’t know how to negotiate, and when you expected her to do so, she just took your offer at face value and rejected it.”? WOW.? The comment that “young people don’t know how to negotiate” is a true statement – but it has a much greater meaning beyond the hiring process, and THAT was my epiphany.

First, we walked through the scenario with him, and we recognized that the best strategy for recruiting is just to decide what you’re going to pay, and offer that amount.? In fact, I advocate putting the numbers in your job ad, making sure that the person has seen them and is fine with the numbers (this should be an early first interview question), and then the conversation itself is moot.? There’s nothing in hiring that is worse than getting down to the final offer and realizing that you’re many thousands of dollars apart, and that you’ve wasted your time and the candidate’s.

But, that morphed into a more meaningful conversation about sales and selling.? It’s true that many younger people have neither the knowledge, nor desire, to negotiate.? And why should they?? They don’t have to in the vast majority of their dealings.? When you go to Amazon to buy something, there’s not a place to enter a counteroffer.? In fact, nearly everything that you can buy now has pricing attached.? Heck, I’ve even embraced this trend by putting basic price points for my services on my website.

Carmax and Carvana have become forces in the auto industry by, in part, offering no-negotiation purchasing.? Tesla doesn’t negotiate.? In other words, the concept of negotiation is an aberration for the younger generations (as usual, I’ll classify this as Millennials and Gen-Z’s.)? So, when a 20-something salesperson is interviewing and they show no desire to negotiate, you shouldn’t be surprised.? But there’s a deeper issue here.

Most people – of any age – don’t like to negotiate.? I’ve been writing and talking about this for two decades now.? If people liked to negotiate, you would find more people that love the process of buying new cars than you do!? People tend to negotiate when they are forced to, either by someone offering a price that is so artificially high that the buyer knows that he or she would look like an idiot if they bought, or by salespeople saying dumb things like, “I want the last shot at the price” or other anti-profit phrases.? I personally have never enjoyed negotiation. I’m good at it when I want to be, and I can train it, but I’m in the 80% of the population that does not enjoy that process.

The instinct here on the part of many salespeople and sales leaders is to say, “Those dang young-uns, they can’t even negotiate!? How are they going to sell?”? This might be followed with a “Get off my lawn!”? Heck, I’ll even admit that this was my first thought upon hearing the story.

But then came the epiphany I’ve been teasing.? Those younger people – who don’t know how to negotiate and don’t want to – are the people who are going to be buying what you have to sell, if not now, then in the near future.

WOW.? Now, that’s something to chew on, isn’t it?? The salesperson that my new friend was trying to hire simply heard the number, decided it wasn’t the right number, and walked away to find another job.? Now, think about her being the buyer of something you’re trying to sell.? You use the old “Start with a high price, because you can never go back up” strategy.

She thanks you and says she’ll think about it.

No counteroffer.

No questions.

Just her moving on to someone else who quotes her a fair price – which she accepts and starts a new relationship. It happens right now, and it’s going to happen more.

Look, I’m not breaking new ground here (for me) by saying that the best negotiation is no negotiation.? Quote a fair price and stand on it.? You maintain pricing integrity, you get a good profit percentage, you save time and pain on the part of yourself and your customers, and you initiate the relationship in a more positive fashion.? That takes a different approach.? It takes sales leaders who are willing to empower salespeople to handle pricing in this fashion, and it takes salespeople who are strong enough to just sit on a price.

My coaching packages for business owners start at $48,000 per year.? A few years ago, I proposed a package to a business owner who said, “Okay, I’ll give you $45,000.” I thanked him for the opportunity and said no.? He said, “You don’t want this business for $45,000?”? I said, “I don’t want it for $47,999.? My price is my price.”? A minute later, he signed the agreement.

Here’s the challenge facing us.? Younger salespeople are going to be dealing with older customers who do, in fact, understand negotiation and feel it’s expected.? Those younger salespeople need to be trained in negotiation skills and equipped to deal with those buyers.? That’s okay; negotiation is a skill that can be taught.

Legacy salespeople, who are used to negotiating, need to be trained on how to not negotiate, and instead maintain pricing integrity with buyers who are accustomed to buying that way.? This might be tougher, because negotiation is, for some, a measure of sales badassery.? Being a good negotiator is part of how many salespeople perceive their worth.

Ultimately, we are in a period of time where adaptability is paramount when it comes to the sales profession going forward.

Will negotiation join “Fish on the wall selling,” “The Take-Away Close,” “False Scarcity,” and “Controlling the Buyer,” in the Museum of Outdated Sales Tactics?? Possibly.? As those younger buyers keep elevating in corporate America, I think that negotiation will be a smaller and smaller part of selling.? You might as well prepare now.