4 Mistakes in Sales Negotiations to Avoid

Over the years in working with sales audiences, we have helped thousands of sales reps and account managers with their challenging negotiations and have seen many results. Here are four mistakes we have experienced in sales negotiations and advice on how to avoid them.

1)      Not understanding fully what is important to the other party

When sales negotiators neglect to find out what is important to the other party or parties, they risk leaving value on the table. They may create a more difficult negotiation, especially if they are focusing solely on positions or demands rather than crafting solutions that meet the underlying interests. The less they know about what matters to the party, the less they can develop an option that satisfies their counterpart’s needs. Similarly, if they are not clear on their own interests, they may sacrifice the best outcomes for themselves.

To avoid making this mistake, sales negotiators should prepare well and consider what might be important to their counterpart ahead of time based on what they know and imagine. During the discussion, they should confirm any estimations of interests to prevent making assumptions. If they hear something and believe there is additional information that can be helpful from the other party, they can ask, “Why…?” or further open-ended questions to understand fully.

The result may mean the difference in coming up with a solution that the other party can say yes to that maximizes results for the sales negotiator.

2)      Not recognizing the other party represents both company interest and personal interests

When sales negotiators only focus on the company interests and therefore potential options to satisfy them, they miss out on a critical piece of leverage and information on what could motivate their counterpart personally. They lose possible value and pieces of an agreement for trading and including to reach a yes.

To avoid this mistake, it is more powerful to consider both types of interests for the person and the organization. Ask about how the solution will help them with their goals. Sales negotiators will build a more trusted relationship and potentially get to yes more often when taking into account the other party’s individual needs in the negotiation. Are there ways to help them achieve personal objectives, look good to their boss, or create a positive perception of their department?

By paying attention to two strands of interests, sale negotiators may develop an internal champion and long-term connection.

3)      Not asking, “Where does that number come from?”

When sales negotiators are given an offer or their counterpart shares a number with them as part of a potential deal, and they proceed to accept that figure at face value, potentially coming to agreement or countering off of it, they risk missing out on a critical piece of criteria. Additionally, they may feel compelled to haggle or discount using the proposed amount and arrive at a lower deal than they originally expected.

A simple habit to get into when being pitched a number is to ask where it came from.  Sales negotiators may find that this conversation opens up new points of discussion or the confidence to stand firm on the current figure if the amount does not align with persuasive criteria.  At a client program, an attendee once had a call during the break in the session where their customer offered a deal. Having just learned this best practice, they asked, “Where does that number come from?” and the customer didn’t have a response, so they continued the discussion at the original (and better) level for the sales negotiator.

The result of doing this simple practice can make a huge difference in the sales outcome and prevent sales negotiators from giving more away at the table.

4)      Not considering what will happen if the negotiation does not end in agreement

When sales negotiators focus their preparation solely on the possible deals and do not consider what will happen if they can’t come to agreement, they miss out on important information. They could develop a misaligned sense of confidence and end up in a hard place, potentially taking a suboptimal deal. They also might lose an opportunity for using leverage with their counterpart.

One way to ensure that this mistake does not happen is to prepare ahead of time and consider how the sales negotiator’s interests will be satisfied if they don’t come to agreement. Having a sense of what they will walk away to if the negotiation falls apart and spending time prior to the negotiation strengthening their no-agreement alternatives will bring more confidence and insight on what is possible at the negotiation table. If they discover they have weak no-agreement alternatives, sales negotiators will know they want to work more at the table to come to agreement. Additionally, considering what the other party will do if there is no agreement, can also inform sales negotiators of the strength of their counterparts and provide opportunities to weaken the perception of the other party’s walkaways.

With this extra preparation, sales negotiators can feel more prepared, confident, and informed to make the best agreements possible and know they have at least one way to fulfill their needs even if the negotiation goes sour.