The Top Sales Negotiation Mistakes (And How to Avoid Them)

Milena Gallo

Milena Gallo Marketing Advisor

Tuesday, July 9, 2019

When done right, the sales negotiation process is where the salesperson increases their understanding of the prospect’s needs and the prospect’s decision-making process, and lays the foundation for possible future sales.

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However, some sales negotiation mistakes can lead to poor relationships, unsatisfied customers, and an unfavorable bottom line. Sales negotiation training can guide salespeople to identify and avoid these top four sales mistakes.

1. Not negotiating with the decision-maker

One of the most important rules learned in sales training is to ensure you negotiate with the decision-maker. Avoid haggling with influencers and gatekeepers unless their decision is binding. Gatekeepers and influencers tend to be underlings with an agenda to keep you at bay and don’t possess the decision-making power required for moving negotiations forward.

Bargaining with anyone else aside from the decision-maker can result in a waste of effort, lost time, and quite often, the loss of a sale. When you start talks with someone other than the decision-makers, you can find yourself at a disadvantage since any terms agreed with the representative may not be honored.

In fact, any concessions you make may be used by the decision-maker as the negotiation anchor for a fresh round of negotiations where you may be expected to yield even more concessions. When you realize your contact person isn't the final decision maker, your best bet is to challenge them and ask to speak directly to the decision-maker.

You can request to schedule a joint meeting or conference call between yourself, and the influencer and decision-maker. Alternatively, you can request that you both bring your respective teams. In most cases, a full team will likely be headed by the decision-maker who may want to be present.

2. Negotiating against yourself

If you make an offer or set out terms for a contract and the buyer doesn't accept it, don't directly offer new terms or a lower price. Offering revised terms gratuitously is tantamount to bargaining against yourself, with you as the clear loser.

Expert sales courses train salespeople how to guard against negotiating with themselves. You’ll likely be the only one making concessions while the prospect sits back and waits for an even bigger discount. Furthermore, once you start making non-requited concessions, you set a bad precedent for any future negotiations with that client; they’ll likely expect this each time you make them an offer.

Instead, ask your prospect to make a counter-offer for your consideration. The very first time your prospect turns down your offer, ask for specifics. Ask what exactly needs to be done to finalize the sale. Ask whether the price is the only issue or if there are other stumbling blocks.

As taught in negotiation training, what you should be looking for is the one concession on your part that can finalize the sale, rather than to start a new round of bargaining. Additionally, ensure that any concessions you make are accompanied by a reciprocal exchange of value. An equal quid pro quo resulting in a win-win agreement.

3. Not defining concessions in advance

When you meet your prospect, you might need to make some trade-offs to sweeten the deal. You may even have to engage in some log rolling, where you offer something the buyer values more than you do in exchange for gaining something you value more than the buyer does.

The problem occurs when the salesperson goes into negotiations not knowing what they’re willing to give away or to claim in exchange.

In negotiations, it’s imperative that you are clear about your priorities and expectations. Practice lots of perspective-taking when doing your research and preparations for the negotiations. Perspective-taking involves knowing your concessions in advance so you can solidify your position to avoid coming to an impasse or losing the sale altogether.

4. Splitting the difference

Salespeople quite often react to a counter-offer by offering to reach a middle ground. Reaching for a middle ground is an easy and fast way to come to an agreement and close a deal.

However, in most example scenarios offered in negotiations training, splitting the difference by reaching for the middle ground can be a mistake. Often, aiming for a halfway point doesn't take into consideration the time and effort taken to perform the contract. Splitting the difference may also ignore other factors such as the scope of work, product development costs, and ownership of intellectual property.

Meeting in the middle can seem like the buyer and the seller are making equal concessions but upon closer investigations, you might discover equal doesn't mean equitable.

To counter an offer from the buyer to split the difference, start by saying a firm no. Follow up by providing details as to why an equal concession is likely to hurt the deal's performance for both the seller and the buyer.

Once you explain to your buyer that splitting in the middle is unfavorable, use the opportunity to propose more equitable concessions. Find out whether there are ways you can create more value before deciding on who gets what.

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