In today’s B2B buying environment, negotiation is likely to be part of any sales cycle. It is also true that the buying process is no longer a simple linear step-by-step interaction between the customer and the seller; hence negotiation may occur at any time in the process and it can occur more than once. Plus, sometimes things are settled but then come unraveled as other customer decision-makers enter the buying process.
With these thought in mind we are always on the look out for ideas on the topic.
Recently we were struck by a column in the business section of our local newspaper sharing 4 “must haves” when negotiating deals. Although they are fundamental, they are not easy to achieve in the heat the deal. Let’s take a look:
1. Elements must satisfy everyone’s interests
It’s necessary to ensure the deal satisfies the interest of both parties. Of course, you can’t always know for sure, especially if the customer holds their cards close to the vest. But if you start to pick up signals that the agreement doesn’t appear to be in your customer’s interest – yet they still seem willing to move ahead – it’s a red flag. Investigate more. Something is likely going on that will destroy the agreement later in the buying cycle.
2. Incentives to ensure everyone’s compliance
Make sure the agreement includes clear provisions incentivizing all parties to comply with their commitments. No one can predict the future. But, including a clause spelling out the consequences of not complying is fundamental.
3. Parties’ psychological commitment to deal
Secure, long-lasting business arrangements occur when everyone feels like they got a decent deal. Not perfect deal, but a sufficient, decent deal. You don’t want your customers resenting the deal over the long run. This is particularly important in B2B sales because you will be looking for future business from the customer and customers have long memories.
4. Appropriate legal language
This is particularly important for smaller companies that are engaged in B2B sales and may not have an in-house legal staff. Most significant deals involve legal verbage and provisions. In the urgency to close the deal, this language may seem to be just a detail, but it isn’t. The specific language and details can be hugely important down the line. Make sure you understand the legal provisions and the risks associated with them.
If you are going to be engaged in an upcoming negotiation and would like a comprehensive review of the topic, download our free eBook – we explore the negotiating strategies and skills used by top B2B sales performers including:
- building the customer relationship
- creating and sustaining trust
- creating a bigger pie
- planning a negotiation strategy
- selling value first, not price
- executing a negotiation strategy
- price discounting and the importance of selling value
- face-to-face negotiating best practices
- handling deceptive tactics
In major accounts the aim of your negotiation must be to successfully close the deal and build the relationship. The first objective requires identifying, exploring, and addressing the interests and concerns of both parties. The second involves building and sustaining a collaborative climate. At the foundation of a successful negotiation strategy in an ongoing business relationship is to achieve a balance between these two, sometimes conflicting, objectives.
This article was syndicated from Business 2 Community: Sales Negotiation – 4 Table Stakes
More Sales & Marketing articles from Business 2 Community: