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Sales Negotiation Skills: How to Close More Deals

Closing a deal is the most important step in any sales journey. Even if you found the perfect lead and presented an exceptional pitch, the whole process is void of any value if you fail to seal the deal. As a salesperson, it’s paramount that you practice sales negotiation techniques to close deals with the terms and pricing you desire.

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Preparation is key

Before talking to your prospect, you need to be fully prepared to negotiate a deal. What does this mean? First off, you need to know the industry standard pricing for your product or service so you can justify your selling price. If you are on the higher end of the spectrum when it comes to pricing, you’ll need to have quantifiable reasons why your product or service is superior compared to others on the market.

You also need to prepare an initial price to kick your sales negotiation off with. This offer should be more than what you are actually willing to sell your product or service for because negotiations often lead to lowering that starting price. It’s also important to know the lowest price you can let your product or service go to ensure you and your company are still profitable.

Preparation also includes being knowledgeable about your customer’s past experiences with similar vendors. Knowing what problems led your customer to seek other options can help shape how you pitch your service or product. According to a research report by Salesforce’s Work.com and The TAS Group, only 61% of salespeople feel confident that they’ve identified their customer’s past pain points. However, those who do identify a customer’s pain points are 28% more likely to close a sale.

Before the sales negotiation can start, ensure that the actual decision-maker will be your point of contact. Negotiating with a middleman can prolong the closing process.

Preparation Checklist

  • Identify how much your potential customer is currently paying an existing vendor
  • Research industry standards in regard to pricing
  • Create a price that is beneficial to your company and lead
  • Prepare clear justifications for your product or service’s price

Active listening

Negotiating a deal can sometimes lead to heated discussions. As a salesperson, you must always be respectful toward your prospect and maintain a healthy business relationship no matter what happens. It’s not a sales negotiation if you are unwilling to make concessions.  

Only 13% of leads believe that a salesperson truly understands their needs. The best communicators are the best listeners. Hear everything your lead has to say, answer his or her questions and be prepared with solutions to any problems. Practice empathy, and keep your customer at the forefront of the conversation.

Pro Tip: After pitching each section of your presentation, ask your potential customers if they have any questions or comments rather than saving that feedback until the very end of your meeting or phone call.

Communicate clearly

Your sales deal should be completely transparent. Be specific with all the terms of your contract, from the initial purchase of your product or service to the cost of ongoing maintenance, renewal fees, annual fees and additional features. Failing to mention hidden costs could be a red flag for your lead.

In addition to all of the logistical matters, salespeople should continually reinforce the value of their product or service. Explain how your price equates to the value of your product or service and how much it can benefit the customer’s business.

If you do decide to offer a discount, make it clear that it is special pricing. Is this truly a no-strings-attached discount or will there be certain services and/or features that will no longer be included?  

More than 50% of customer loyalty is based on how you sell a product or service, not what you actually are selling. Communication is the key to not just closing a deal but also maintaining a loyal customer.

Communication Checklist:

  • Have you communicated all of the line-item fees for your product or service?
  • Has every feature, detail, and option been explained?
  • Does your potential customer show a clear understanding of your product or service?
  • Have you allowed the person you’re pitching to ask questions?

Give and take

Compromise is essential during a sales negotiation. It can’t be a one-sided conversation. Collaborate with your lead to achieve the best deal for both of you. Be prepared to counter offer with a deal that may reduce the offerings of your product or service while still providing exactly what the customer desires – but for a smaller price.

Salespeople should also be aware that the entire process can be long. About 80% of sales require five follow-up calls after a meeting, but 44% of salespeople give up after the first one.  

You want both sides to be happy when a deal is closed. Although it may seem like landing a deal is the most important thing to a salesperson, signing a contract that ends up costing your company more could be detrimental. Know your limits, and know when to walk away.

Pro Tip: Before heading into a meeting with your potential customer, know the limits of how low you can sell your product or service for. You never want to take back your word after a meeting because you are unable to offer a specific price discussed.

Build a sense of urgency

Throughout your sales process, you need to clearly define deadlines to build a sense of urgency. From setting up your initial pitch meeting to following up and setting a deadline to close the deal, creating a timeline will allow you to build momentum. Salespeople who follow a clearly defined sales process are 33% more likely to close deals.

It’s important, though, to provide adequate time for your lead to make an informed decision. If he or she feels rushed, it may backfire and cause them to panic – ultimately leading to him or her backing away from the deal.

Sales Cycle:

The length of an average sales cycle varies based on the type of industry and company size. However, the steps along the process are relatively uniform:

  1. Prospect
  2. Connect
  3. Research
  4. Present
  5. Close

How Crunchbase can help your sales negotiation

Estimating a price for your product or service depends on several factors including value, industry standards, and a customer’s budgetary restrictions. With Crunchbase Pro, you can view your prospect’s investments and funding to determine if they would be a suitable prospect based on their ability to meet your price point. We also offer custom alerts so you can stay up to date on any major news items involving your potential new client.

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