Are You Negotiating Too Early and Eating into Your Margins

I recently had a conversation with my long term friend, IAN FARMER , about the art of negotiating. Below are some thoughts from the call that I felt to compelled to share.

An Introduction to Negotiation Skills for Sales Professionals

In the fast-paced world of sales, understanding the fine line between selling and negotiating is crucial. Jumping into negotiation too early can erode your margins and undervalue the solutions you bring to the table. Here's how to approach negotiation with strategy and confidence.

What’s the Difference Between Selling and Negotiating?

Selling is a persuasive process where the supplier convinces the buyer of their need for a product or service, leveraging the imbalance between the supplier’s desire to sell and the buyer’s need to purchase.

Negotiating, on the other hand, happens when the need to sell and the need to buy are more evenly matched. It’s a give-and-take process where terms like price, volume, delivery, and service are agreed upon.

Why Negotiation Matters in Sales

Even with shared needs, a customer won’t always purchase on your terms. Negotiation bridges that gap, determining critical elements like:

·????? Pricing and payment terms

·????? Product range and quality

·????? Delivery schedules and service levels

·????? Added value like technical advice or promotional support?

The goal? A mutually beneficial agreement that strengthens the relationship.

The Buyer’s Perspective

Understanding the buyer’s priorities is key. For professional buyers, it’s not just about price. They evaluate:

·????? Profit margins and long-term ROI

·????? Quality in their terms

·????? Value beyond the initial cost

·????? Reliability of delivery and service

·????? Brand alignment with their goals

Remember, price rarely stands alone - it’s part of a broader equation. The most skilled buyers seek balance, not just the lowest price.

The 10 Commandments of Negotiation

Want to master negotiation? Start with these golden rules:

1. Trade concessions - don’t give them away.

2. Leave the buyer feeling they’ve scored a great deal.?

3. Be wary of phrases like "just a few small details."?

4. Avoid backing down - climbing back up is harder.?

5. Stay neutral in the early stages.?

6. Deflect pressure by calmly taking notes.?

7. Need time? Pause to review or make a call.?

8. Never offer until you know every point the buyer will argue.?

9. Deadlines are rarely immovable.?

10. Constants can often become negotiable variables.?

Why the Best Negotiators Win

At the heart of every great negotiation lies strategy and understanding. The best negotiators:

·????? Know the difference between selling and negotiating.?

·????? Anticipate the buyer’s perspective and align their strategy accordingly.?

·????? Build trust and ensure both sides feel valued.?

Ultimately, the best price, product, or brand doesn’t guarantee success. The best salesperson does.

Thanks again to IAN FARMER for his input into creating this article. Ian and I would be pleased to hear if you have any further thoughts on this subject.