Closing Time

Sell More & Discount Less with These B2B Sales Negotiation Tips

Does the traditional B2B sales negotiation process almost feel like a hostage situation?

We build trust and form a relationship, then when the customer says “yes,” the gloves come off. In today’s era, where everything is as a service, the deal is the beginning of the relationship, not the end.

In this episode of Closing Time, sales expert Todd Caponi will provide simple techniques to improve your B2B sales negotiation skills, build trust, and create a better overall sales experience. The result? You’ll discount less and make all of your deals more predictable.

Watch the video:
Key Moments:
How and when to talk about price
02:22

Negotiation tips

In sales, one of the top considerations for a buyer is always the cost of the product or service. In a conversation with a potential buyer, it’s essential to be transparent about pricing and how it is determined. For every for-profit company in the world, price is driven by four factors: volume (how much they buy), the timing of cash (how fast they will pay you), length of commitment, and timing of the deal (a seller’s ability to forecast). Sharing these factors with buyers when discussing pricing can help build trust and provide them with the cards to negotiate their own deal.

Traditionally, salespeople are told not to talk about price first, but research suggests that leading with price and sharing a range with the customer can be beneficial. Studies show that when salespeople lead with a price range, customers are more likely to buy, stay, and advocate for the product or service. It’s also a good way to qualify buyers in or out early on, so if there is a significant gap between the product and the customer’s expectations, they can both avoid wasting time.

Setting expectations upfront and proactively introducing price in the conversation can take away potential objections and friction. It also helps avoid uncomfortable trust-eroding things that typically happen in a traditional sales process right at the goal line.

Moving the sales along
09:58

Most buyers are involving other people internally in the sales process, and they’re probably considering some competitors. So how do you know if you’re making an impact? How can you tell if you’re moving the sale along? From a negotiation perspective, it’s all about laying a foundation early and often.

Think of it like a marathon. A marathon is an event, sure, but it’s really a process. Runners train and prepare for months prior to running a marathon. How well they prepare determines their success during the race. Similarly, negotiation is not just an event that takes place at the end of the sales cycle, it is a process. To make sure you’re moving the sale along, you need to explain and reiterate to your customer the four ways you can give them a discount: if they commit to more, pay faster, commit longer, and help us forecast. However, if you haven’t laid that foundation throughout the entire process, negotiating becomes a lot harder.

When the customer can't afford
11:47

When a customer says they can’t afford your solution, it can feel like you’re missing the mark. However, if you’ve been transparent with that customer and built trust with them, there are a couple of things you can do. Option 1: if the customer will never be able to afford your solution, part as friends quickly. Option 2: they may still want to work with you because you’ve built trust. In some cases, involving more people in the buying committee to secure additional budget is possible. Oftentimes customers have the wrong lens on how much new investments will be. It’s not a deal killer, it just makes you smarter with the way you spend your time.

Negotiating while multithreading
13:57

Multithreading involves identifying and engaging with various stakeholders who may have different needs, interests, and concerns, and tailoring the sales approach and messaging to each of them. For example, a salesperson may need to convince the CFO of the value of the solution in terms of ROI, while also addressing the technical concerns of the CTO or the operational issues of the VP of Operations. Multithreading requires a nuanced understanding of the customer’s organization, their pain points, and their decision-making process, as well as strong relationship-building and communication skills.

After a potential customer expresses interest, they may want to involve other decision-makers in the process. As a salesperson, it’s important to guide this process and empower your sponsors to negotiate on your behalf. Some may think that negotiations should only happen with those in power, but this isn’t always the case. By consistently laying out your pricing structure and the four levers that drive it, you can arm your sponsors to negotiate effectively. For example, if a sponsor presents your pricing to the CFO and they suggest sharpening the pencil, the sponsor can respond by saying they’ve already discussed the pricing structure with you and identified opportunities for discounts based on faster payments, longer commitments, or increased volume. This approach makes negotiating more transparent and consistent, allowing the entire organization to negotiate their own deal.

Psychology of discounting
15:57

Sales negotiation is a multistep process, and it’s crucial to get it right. But why do salespeople tend to negotiate too early? It’s a psychological aspect that can be explained through an analogy. Imagine you’re taking your dogs for a walk in a forest preserve, and you’re in a hurry to finish the walk. You just want to get it over with, but then you find a $20 bill under a rock. Now, you slow down and start kicking over every rock because you wonder what else you could find. The same applies to sales. The moment you give anything away for free or offer a discount, you slow down the sales cycle because buyers start asking what else they could get for free or at a discount.

Instead of discounting early, lay out your pricing consistently via the four levers and let the buyer negotiate their own deal. This approach changes the dynamic immediately and makes buyers feel empowered. Furthermore, negotiating with power alone is not always the best approach. When you educate your sponsors on your pricing structure, you arm them to negotiate for you. This transparent approach can also speed up the sales process.

Transcript

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