The Three Most Common Mistakes Made in Sales Negotiations

Posted on 02/01/2006 in Sales Negotiation Skills

The Three Most Common Mistakes Made in Sales Negotiations

  1. Conceding too much too soon
  2. Underestimating your power
  3. Responding poorly to adversarial tactics

Average negotiators make these same mistakes repeatedly.  Successful negotiators are successful, in part because they have learned to eliminate these common mistakes.  You can improve your ability and the ability of your sales team by eliminating the common mistakes described below.

Mistake #1: Conceding Too Much Too Soon

The most common mistake made by average negotiators is to concede too much too soon.  If the customer says something like "your price is too high," the average salesperson will immediately make a price concession.  Instead, successful negotiators always try to:

  • Get something in return by using "if/then" language
  • Use a settlement range for maneuvering room.  Every negotiation involves one or more issues.  Successful negotiators plan a settlement range of acceptable outcomes for each issue
  • "Agonize" when appropriate
  • Concede an elegant currency rather than make a concession on price. An "elegant currency" is anything that has high value to the customer and is low cost to the seller.  Exploring for and exchanging elegant currencies increases the likelihood of reaching a win/win.

Mistake #2: Underestimating Their Power

Average negotiators underestimate their power.  Many people approach a negotiation believing that they are in a less powerful position than the other party.  Salespeople often feel that the customer holds all the power. 

Actual power is difficult to assess, so most of us depend on our perception of power.  The following is a simple rule to use when considering the power in any given negotiation situation.  The Power of Alternatives:  Power in negotiating is a function of alternatives. The more alternatives you have, the more power you have.  To increase your power, be sure to identify your critical wants and needs, and then identify alternative ways that you can get those needs met if you don't reach an agreement with this customer.

Mistake #3: Responding Poorly to Adversarial Tactics

The most common way that average negotiators respond to adversarial tactics is fight or flight.  In other words, break it off or respond in kind.  Both of these responses will not result in win-win negotiations.  The best way to respond to adversarial tactics is counter-intuitive.  Successful negotiators have learned not to react, to stay calm and to disarm the other person, and to then use win/win tactics rather than adversarial tactics. 

Learn more by visiting our Sales Negotiation Skills Workshop page and if you are a sales manager and would like help teaching negotiation skills to your sales team visit Giving and Getting Concessions when Negotiating Sales Meeting Kit.

 

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