Spencer Wixom, Chief Customer Officer at Challenger, spoke during Clozd’s Win Loss Week on the best tips and tricks to negotiate a deal and how you can do your best to ensure it closes.
Challenger published a research finding that showed that if the buying process is painful, the customer is more likely to regret buying. As a seller, that means even if you win the deal, you may have lost the relationship if the buying process doesn’t go well. The best way to combat that is to ensure the buyers have a good experience throughout their journey, even through the tough parts—like late-stage negotiations.
Challenger conducted a study with over 300 individual sellers. Even though they found that 70% of sellers think they do well at maintaining a good relationship with customers, there were three areas where sales struggle: creatively figuring out terms and conditions, getting a good price for what you sell, and being appropriately assertive when things get heated. Tension can lead to more difficult buyer processes and buyer remorse if you don’t have the right tools to manage it properly.
“The negotiation helps your relationship with your customer. You increase trust by being fair.” - B2B Sales Rep
Sellers are looking for support. The same study revealed that 78% of sellers said they needed help with a strategy for/don’t currently use the organization's guidelines for managing tension.
The right tools for managing tension in a sales negotiation can give you a standard to measure your performance—whether the negotiation led to a good outcome and how well you performed during the negotiation. So, what tools do sellers need to have a good negotiation strategy?
A map and a rule of thumb.
A map can help you understand where you’re going and the points to navigate around on your way there. If there’s no map from the beginning, you run the risk of being surprised by different obstacles you perhaps didn’t see coming.
The rules of thumb are the principles you follow to manage situations as they arise.
The Challenger map for B2B negotiation has two parts: selling and negotiation, which they refer to as “sizing the pie” and “protecting the pie.”
“Selling and negotiation are two distinct things in a buying journey. They overlap with one another, and the activity you do to sell sets the stage for what you negotiate.” - Spencer Wixom
Sizing the pie is when you are building the value of your product in the eyes of the stakeholders. Essentially it’s when traditional selling activities are involved. Protecting the pie is the negotiation process. You may notice at some point in the sales process that you are meeting with fewer stakeholders and the questions are laser-focused on pricing and the economic value of your product—this is when you’ve moved into the “protecting the pie” portion of the sales process.
Spencer noted to work towards protecting the pie, the trick is to identify the pivot point where the focus on selling changes to the focus on negotiating. From there, you can determine how well you followed your map.
Negotiations can go awry when you give away too much of the pie you built. Maybe you did a great job building excitement for your product around the buyer’s organization, but they suddenly throw you a curveball—a wanted price cut, an extra review step, new stakeholder, etc. Don’t react emotionally! Sellers will often feel like they have too much riding on the deal to lose it, so they will act unreasonably, offer discounts, or other unnecessary concessions.
The best thing you can do to be a successful negotiator is prepare for negotiations. High performers are more concerned that everyone gets something out of the deal. If you’re ready beforehand to negotiate a beneficial deal for all parties, you can avoid tension.
High-performing negotiators keep it professional, mirror the customer, and use customer stories to push the deal along. Lower performers may try too hard to push a friendship between them and the buyer—or do the opposite: try too hard to keep all emotion out of it.
Lastly, figure out how to handle the price early on. High performers set early expectations, whereas lower performers may leave price conversations open-ended (which can satisfy the customers in the moment but can make negotiations harder later on).
Learning to be an excellent negotiator can help you in every aspect of your life. Keep in mind your map and critical rules of thumb to help you deliver the best product to your customers and the best end result for your company. For other tips and sales tactics, check out the Challenger Blog.
Clozd is a leading provider of technology and services for win-loss analysis. We help our clients uncover the truth about why they win and lose so they can start winning more. For more information on how to get started with a win-loss analysis program, go to www.clozd.com/win-loss-analysis.