What is the crucial element in sales?

While there are many elements for success in sales one of the most important elements is Negotiation.

Good negotiation techniques are not only important to close a sale but also helps to get a better value. All efforts are wasted if a sale is not closed or closed with poor terms.

What is negotiation? "Negotiation is a mutual give & take process to arrive at a mutually beneficial decision".

Are all negotiation mutually beneficial? Not always as the fundamentals are not taken care of by the salesperson

There are 3 Major factors in Negotiation and if the salesperson understands and takes control of these then the chances of success are high.

What are those 3 major variables? They are

FACTOR 1:- POWER

This is an important variable while the buyer has some powers the seller also has some powers. The salesperson has to understand each power and take action accordingly

The Power the Buyer has

A) The power of Competition:- The salesperson should have full knowledge of all the option the customer has so that he can give a suitable counteroffer

B) The Power of Precedence:- The customer will also show the terms of the last deal so the salesperson is under pressure to repeat that, to counter that salesperson should be prepared with all the reasons why it is different this time

The power the salesperson has

A) The power of persistence:- This is one of the very important power the salesperson has there is no need to close the deal the same day the salesperson can come again and again till the deal is mutually beneficial. Many salespeople want to close the deal the same day and hence lose value

B) The Power of legitimacy:- Written word has more impact than spoken word so a salesperson should show more written things to customers, a written pricelist is more convincing than the price conveyed orally

Just imagine someone says do not smoke as opposed to a big bold sign on the wall

"NO SMOKING" which will be more impactful, the written board will force more compliance than the oral instruction. The salesperson should use this power to their advantage

FACTOR 2:- TIME

Time is a very important factor in Negotiation. The person who has more time has an edge in the negotiation process.

A customer who needs the equipment very urgently will give a better price as compared to a customer who has lots of time to decide

A salesperson who has to close a deal for the month with less time for month-end is like to give away value as he is under pressure to close the deal

A salesperson should always gauge the deadline and urgency of the customer and also should not show desperation or urgency as this will lead to value erosion

FACTOR 3:- INFORMATION

Information is the third important factor in negotiation. More the information better the chances of closing the deal at a good price, for maximum information the salesperson should develop a good listening ability.

What are some of the information which will help the salesperson to close will at a better value

1) Who are all the real decision-makers?

2) What is the perception of the customer about their product?

3) What options has the customer has?

4) When will the customer decide?

5) Who are all the influencers for this customer?

6) What is the financial capability of the customer?

There may be other information which is important and this can be got if the salesperson is a good listener and able to ask powerful questions

Negotiation is a vast topic but with these three important factors in mind any salesperson can do a good job, close more deals and get better value for their product

What are your views? Share your experiences of your negotiations and what has worked for you