How to Successfully Negotiate with Clients
Negotiation is often defined as an art. Art requires a special eye for color and composition and nuance – the emotional aspect of a painting or sculpture that catches your attention and draws you in. But art requires technical skill as well, to accomplish the goal of bringing a vision to life.
In much the same ways, the art of negotiation requires the ability to detect nuance as well as practical skills in moving the process forward.
Every artist starts with a vision
They don’t simply start chiseling away or daubing paint on paper. They know what they want to achieve. As a negotiator, you also need to have a clear goal in mind from the start. That way you have something to reach for, and you’ll know when it’s in hand.
Everyone’s a winner – or should be
An artist knows when they have succeeded. They are pleased with the work they have produced. For some, that’s the only goal – to please themselves. But most artists want others to enjoy their work, too. And when that happens, it’s a dual win. Where negotiation differs is, that to be truly successful, it must produce dual winners, with both sides getting something they want. Neither may get everything they wanted, but neither walks away empty-handed or feeling trampled.
Unfortunately, this is where many negotiators fail. All too often, one or both parties come to the process believing there will be a winner and a loser. Since no one wants to lose, both start the conversation with unrealistic expectations and, often, a belligerent attitude. This can easily lead to the conclusion no one wants – everybody’s a loser.
“Understand that negotiation doesn’t have to be a power struggle,” advises Invoice2go CEO Greg Waldorf. “It’s a chance to listen and be heard, to show and earn respect and to develop a solid relationship with your customers that they’ll want to tell others about.”
He’s right. So let’s talk about how you can accomplish all that.
Recently we published a blog in which we talked about active listening. This is a popular phrase now, and different sales experts interpret it somewhat differently, but the underlying concept is the same. Rather than focusing on making your key points and insisting on getting what you want, focusing on your client’s wants and needs will generate a better return for both of you.
Active listening has value because it enables you to hear and understand the “why” behind what your client is saying. When you know their reason for objecting or delaying a decision, you can directly address that as you negotiate. Doing that builds trust. The client sees that you really are hearing his concerns or desires, and you’re doing everything you can to help him get what he needs.
Toward that end, remember that one of the keys to active listening is asking follow-up questions. You don’t have to rely on your ability to “read between the lines” as your client talks. Ask why the sticking point they mentioned is a concern.
Active listing is a critically important skill for any negotiator who hopes for successful outcomes. But it’s not the only skill you’ll need. So what else does it take to make the most of every negotiation and still retain a positive relationship with clients?
Match your approach to the client and the issue at hand
Negotiation can take several forms, so you need to know which skills and tactics to use to achieve your goal. For example, negotiating the job details with a new employer will be different than negotiating the sale of a product to a customer. The good news is that, most of the time, if someone is making the effort to negotiate with you, they’re demonstrating their interest in reaching the goal, whether that’s landing you as a new employee or acquiring your product or services. So, in reality, you both have the same goal. That’s a great starting point.
Know what you want, and where you’re willing to compromise
Come to the table prepared. If you’re negotiating price, choose high and low anchor figures – the price you won’t or cannot exceed and the lowest price you are willing to accept. But remember that price isn’t the only determining factor. For instance, your active listening may have revealed that the client is not waffling on the price, they’re worried about cash flow. Can you extend payment time in order to secure full price?
If the client is hung up on the price, is there a free upgrade, follow-up service, or something else you can throw in to add value to the deal? Maybe you can get the work done sooner, if timing is an issue for them.
If your client cannot meet your low-anchor price, can you offer a less-expensive alternative? A product with fewer features, or a narrower scope of work? Can you extend your “sale” one more month to accommodate the client’s purchasing approval timeline?
Technically, these are all compromises on your part – your side of the give and take of negotiation. Coming into the discussion knowing what concessions you’re willing or able to make prepares you to make the best deal possible for you and your client.
To quote Kenny Rogers, know when to fold
There may be times when you have to walk away from the sale. That can be a tough lesson to learn, but there is always a threshold below which you simply cannot go. Or, there may be client demands you cannot meet, no matter how creative you are. If other sweeteners you’ve offered to add value are not enough to convince your client, then you don’t have a deal.
That said, if there seems to be even a little sliver of daylight, leave the door open. Find a way to extend the conversation, or set aside additional time to see if one or both of you can come up with a new option that may make the deal work after all.
One trick successful negotiators often rely on to avoid an impasse is to divide a problematic discussion into segments. We’re all familiar with breaking big projects into smaller tasks. You can do that in sales too. Is there a starter package or a trial service or a single part of your proposal that the client can approve so you can complete a mini-deal and start moving forward?
Finding success when things get tough
You don’t have to be in sales very long to encounter a difficult client or customer. Some people are just naturally contentious. Others expect the negotiation to be adversarial so they meet that head-on. Others are having a rotten day for some reason that has nothing to with you or whatever you sell. Using your active listening skills is one of the best ways to win people over.
When you’re able to build positive, trusting relationships, people can see you aren’t focused solely on making a sale or getting your way. You genuinely want to help them get a good deal that solves a specific problem for them. And that’s how to successfully negotiate with clients.