Sales Negotiation Mindset – Then Versus Now
“Once upon a time there was a bear who was hungry and a man who was cold, so they decided to negotiate in a neutral cave.
“After several hours a settlement was reached. When they emerged the man had a fur coat and the bear was no longer hungry.”
First published in 1969 – The Negotiating Game
This is a story from Chester L. Karrass’s 1969 book, The Negotiating Game.
It’s also the traditional view of negotiating.
“In a successful negotiation both parties gain, but more often than not one party wins more than the other.” says Karrass.
Ok. However, IMO, one of these things is not like the other…
- Negotiating a medical malpractice settlement
- Negotiating the release of hostages from a bank heist
- Negotiating a peace settlement between warring factions
- Negotiating commercial terms for a product purchase
Three of the four are life and death.
Three of the four are situations where both parties resolve to gain “more than the other”.
On the other hand, one of the four involves selling solutions to customer problems, being advocates for our customers, and truly caring for their outcomes.
Why must we keep treating negotiations like they’re all the same?
In a product purchase, the deal is not the goal-line…it’s an early milestone on the way to having a customer who buys, stays, buys more, advocates, and takes you with them to their next role.
I know, I know..I’m biased in my belief that you can negotiate transparently. The most popular workshop I teach is called Transparent Negotiations.
Your price should be your price – with rules. There are four things you should be willing to pay for, in the form of a discount – and that’s it! They are the Four Levers of Negotiation.
- Volume: When a customer is willing to commit to more of your solution, they should receive the benefit of that commitment. Volume tiers…whether it’s the number of licenses, users, locations, amount of data, etc.
- Timing of Cash: When a customer is willing to pay you faster, they should receive the benefit of doing so. Paying up-front is likely better for you that having a client who pays slowly (i.e., monthly, in arrears, NET60, etc.)
- Length of Commitment: When a customer is willing to commit to a longer period of time with you, they should receive the benefit of doing so. A client who only commits for a month at a time isn’t as valuable as a client who makes an annual, or even multi-year commitment.
- Timing of the Deal: When a customer is willing to help you forecast, by aligning mutually around when they expect to sign, they should receive the benefit of doing so. Different than your typical “this month only, 30% off!” fake expiring discount, a client who puts skin in the game around timing is of value.
Cards face up. Discuss it early when presenting your price. Share them clearly in your proposal. Use them to come to a mutually aligned agreement at the goal-line.
As Thomas Herbert Russell wrote in his 1912 book, Salesmanship, “The knowledge of buyers has increased, and they are no longer disposed to pay what is asked of them, unless persuaded in their minds that the sellers regulate their prices on some sound basis.” I believe that “sound basis” is the way forward…a price, the four levers, move on.
When done correctly (and it’s easy), trust is built to the goal line instead of eroded. Your deals become more valuable – short-term and long-term. And, if done right, your deals will be more predictable, too!
This is one article I have to follow up with and say…if you need help with this concept, reach out. I’m a sales keynote speaker who also teaches revenue organizations how to leverage transparency and decision science to maximize their revenue capacity. It’s what I do…teach sellers, their leaders, well…entire revenue organizations how we as human beings make decisions, then how to use that knowledge for good (not evil) in their messaging (informal and formal), negotiations, and revenue leadership. I wrote a book Book Authority listed as the 6th best sales book of all time (𝘛𝘩𝘦 𝘛𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘤𝘺 𝘚𝘢𝘭𝘦), and a second award-winning book (𝘛𝘩𝘦 𝘛𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘵 𝘚𝘢𝘭𝘦𝘴 𝘓𝘦𝘢𝘥𝘦𝘳).
Reach out if you want to discuss The Transparency Sale sales methodology, or really…anything else (sales kickoffs, workshops, keynotes, the economy, history, etc.)! Email info@toddcaponi.com or call 847-999-0420.
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