Negotiate successfully in 5 steps

I am writing this newsletter on my way to France. While I am still working with clients, I look forward to spending time with family, friends and enjoying the French summer.😎

Also excited to share that I'm currently working on a self-paced course version of Elite Sales Athletes: Win High Value Enterprise Deals. I'll share more details next week!

This week, let's deep dive into negotiating and winning high-value enterprise deals. These are not your average deals. They involve 6 to 8 figures, complex decision-making, and many moving variables.

Winning isn’t just about sealing the contract—it’s about forging partnerships where everyone leaves the table feeling good and looking forward to a partnership.

So, why do so many sellers get caught up in the price game, missing out on the bigger picture of value?

In negotiating high-value enterprise deals, it's crucial to deeply understand your client’s unique needs and situations and how they align to your own needs and capability. This understanding not only helps in the negotiation but also builds lasting, meaningful relationships with your clients, focusing on value over price.

TRUE STORY. I was working on a $3 million network and software project when I learned that my client’s financial year was ending in a month. This meant they would lose the budget if they didn’t use the allocated funds in the current financial year. Understanding their financial constraints was crucial in this situation.

At first, my client was hesitant to share this information, likely due to our original contract terms of a 30% downpayment and 70% payment on delivery. He was concerned that I might exploit the situation. It took a series of conversations before I was able to fully understand the issue.

Our solution was to propose two years of free maintenance services for the advance payment. This not only aligned with their financial needs but also showcased the power of flexibility and creativity in negotiation.

My client was not upfront about the situation for fear of being taken advantage of, and I think that’s the most difficult part of negotiation—building trust.

Overcoming Pricing Challenges

Let’s first understand why sales professionals often find themselves vulnerable to price challenges.

• Wanting Quick Sales: In a rush to close deals, it’s easy to compromise on pricing.

• Discomfort with Pricing Discussions: Many salespeople shy away from talking about money.

• Failure to Establish Value Upfront: Without creating perceived value early in the discussion, pricing becomes the focal point.

• Perception of Flexible Pricing: Clients who sense flexibility will challenge the price.

• Belief in Competitor’s Pricing: Sales professionals often assume competitors have better prices, leading to unnecessary concessions. Focus on understanding client needs and validating assumptions with clients.

• Focus on defending pricing rather than providing results: Sales professionals often get caught up in justifying price instead of demonstrating the tangible impact and outcomes it can deliver for the client.

It’s crucial to remember that clients often challenge prices because:

• They lose nothing by doing so.

• They feel it is their responsibility

• They know sellers often give on price

• Value has not been driven upfront

• They don’t understand what it takes to build and execute the solution.

Remember: When clients push back on price, don’t take it personally. They have been trained to do so by incompetent salespeople.

Five Key Steps to Successful Negotiation

1. Begin with the End in Mind:

Clearly define what success looks like for both parties before entering discussions.

1.1 Establish your commitment: Demonstrate your dedication to the negotiation process by clearly expressing your willingness to find mutually beneficial solutions.

1.2 Shared Goals: Identify and agree on common objectives both parties aim to achieve through the negotiation.

1.3 Keep the dialogue open: Maintain an open line of communication to ensure continuous and transparent discussions throughout the negotiation process.

2. Active Listening:

Understand and establish your client’s needs and concerns, both the spoken and unspoken.

2.1 Listen for Soft Issues. When our clients express their views, we should listen for “soft issues.”

2.2 Observe non-verbal cues and uncover them to gain deeper insights into your client's true feelings and concerns, which may not be explicitly stated.

2.3 Validate feelings. Always accept and validate your client’s feelings without agreeing on their opinions.

3. Prepare:

3.1 Write and develop a comprehensive plan for your negotiation approach.

3.2 Create a list of expected objections or arguments that might come up.

3.3 Identify your non-negotiables and your client’s non-negotiables. For example, a non-negotiable for you might be the quality of your product, while for the client it might be a specific delivery date.

3.4 Analyze consequences. What happens if you don’t win the deal? What happens with the client if they don’t push through.

3.5 Offer options, not ultimatum. What are their options? List all the possibilities that can occur and create a list of what you can provide as a value add-on.

4. Practice:

4.1 Role Play: Engage in role-playing exercises to simulate negotiation scenarios.

4.2 Involve fresh perspectives: Seek input from colleagues not directly involved to gain new insights and strategies.

4.3 Gather feedback: Collect feedback from these practice sessions to identify areas for improvement and refine your approach.

4.4 Prepare for a Best and Final Offer (BAFO). Prepare a well-defined final offer and ensure it aligns with your objectives and the client’s needs.

5. Finally, how to deal with price discounts:

5.1 The general rule is only deal with price if price is the last issue on the table.

5.2 Concede slowly, concede in small amounts.

5.3 Never give something for nothing.

Remember, successful negotiations are about more than just closing deals. It's about creating lasting partnerships that benefit both parties and contribute to long-term success.

It took me 4 hours to write this newsletter. I hope you find it helpful and apply it to your sales process. Any questions? I would love to hear how you go.

Happy Negotiating! 🎉

Thank you for being here, I appreciate you!

Ren