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10 Tips for Getting What You’re Worth – Negotiation & Objection Handling in Sales
Handling Objections vs. Negotiating
- Handle sales objections by addressing your prospect’s concerns about your product or service in order to create technical, organizational, and personal buy-in
- You are still selling at this stage in the process
- The goal of a negotiation is to reach mutual agreement about the value of your product or service
- You have already been selected as the vendor of choice
Remember: Don’t negotiate before the prospect is sold, and don’t revert to “selling” once you’re in negotiations.
Overcoming Objections in Sales
Objection Handling: Tip #1
Learn From Your Losses
- Review your lost opportunities over the past year and look for themes
- Which sales objections came up most often? Which ones were the deal breakers?
- What areas will require product development? What can you work or talk around?
- Review your near-losses and close calls; opportunities you won but almost didn’t
- What were the biggest hurdles to closing the sale? How did you overcome them?
- Use these insights to create a “cheat sheet” of common objections and craft 2-3 potential responses for each. Test them out and revisit them often.
Objection Handling: Tip #2
Understand Your Prospect’s Real Concerns
- Why is the objection an issue for them, and why are they bringing it up now?
- No assumptions. Guessing at the prospect’s intention can put the deal at risk.
- In order to truly understand, you must:
- Validate and acknowledge the prospect’s concern (nurture)
- Understand the problem they’re facing and the reasons behind it (ask why?)
- Respond only once you’re sure you understand the real concern
- Never answer a question without understanding the context behind it!
- When in doubt, place the ball back in the prospect’s court. It’s their job to clarify.
Objection Handling: Tip #3
Stop Putting up Speed Bumps
- All prospects have a vision of their ideal solution. This gets them ready to buy.
- Your job is to help them realize that vision, not distort it.
- Salespeople distort their prospects’ visions by:
- Answering un-asked questions
- “Pitching” unwanted features and benefits
- Generally misaligning your solution to their pains or use case
- Saying anything that creates unnecessary risk in the prospect’s mind
Objection Handling: Tip #4
Go for the “No”
- “Is it over?” “is this going to be a deal breaker?” “should we just call it quits?”
- “Walking away” tests an objection’s importance and identifies the prospect’s real concern
- When there’s a particular objection that comes up repeatedly, don’t wait for your prospects to bring it up. Get it on the table early and seek resolution.
- This builds genuine credibility and rapport
- Don’t worry: Just because you’re walking towards the door doesn’t mean you have to go through it… unless you want to.
Objection Handling: Tip #5
Understand That Pricing is NEVER the Real Issue
- There is a direct correlation between pricing and conviction (value)
- Less certainty your product will solve their problem means greater pricing pressure
- Solution: Learn what your prospects would need to see to justify paying more, then show them you can deliver (ROI)
- In other words: Let your prospects answer their own objections. You may not need to handle all of them.
Better Sales Negotiation
Negotiation: Tip #1
Have a Game Plan
- Determine your pricing “envelope” – your best, worst, and most likely scenarios
- Create a list of potential negotiables – setup fees, minimum commitments, etc. – and assign trading values. Remember that contract terms have value too.
- Know your non-negotiables and stick to them
- Remember your prospects will have their own envelope and negotiables too.
Negotiation: Tip #2
Consider Your Prospect’s Environment & Business Drivers
- What do you believe is of value to this particular prospect? Why?
- Internal & external factors influencing their decisions may include:
- Buying team, business challenges / goals, and individual motivators
- Short- and long-term strategy – expansion, relocation, new technologies, etc.
- Competitive pressures, market trends, and general business environment
- Determine their most likely alternative – a competitor, develop in-house, or doing nothing
- What unique advantages does your product or service provide?
- This will determine how much leverage you have
Negotiation: Tip #3
Never Give Anything for Free
- Always get something comparable or greater in return when you give concessions
- Know what items could sweeten the deal for you:
- Commitment to sign within an agreed-upon timeframe (EOM, EOQ, etc.)
- Longer initial term (annual vs. monthly contracts, multi-year agreements)
- Case study or reference account, use of logo in marketing materials
- Introduction or referral to other potential clients
- Better payment terms (upfront vs. monthly payments, shorter collection times)
- “Freebies” lower your solution’s (and company’s) perceived value
Negotiation: Tip #4
Know When NOT to Negotiate
- Providing certain concessions create undue risk to the business, regardless of how much you may want the deal, the new logo, or the revenue
- Owners and Sales Managers: It’s your job to know when these times are.
- Set guidelines, implement check-and-balances, and stick to them.
- This is easy if you’ve done a good job creating your pricing envelope and valuations
- Live to sell another day…
Negotiation: Tip #5
Quarterback the Process
- Consider the various buying centers involved: project sponsors, technical buyers, legal, procurement, etc.
- You must always be working these functions in parallel
- As the seller, it is your responsibility to drive the procurement process
One Final Tip:
- Knowing yourself, your customers, and your marketplace
- Remembering that “pricing objections” are really about conviction and value
- Having a game plan and never giving anything for free
- Owning the process and maintaining control
- Never taking things personally