How to Start a Sales Negotiation Backed by Research

Unfortunately, Too Many Sales Reps Do Not Know How to Start a Sales Negotiation
You’re about to start an important sales negotiation, what you should lead with to start off on the right foot? Should you start with…

1. Your best offer?
   
2. Your best offer and a couple less attractive offers?
   
3. Several offers of roughly equivalent value?

What the Sales Negotiation Research Says
According to Research at the 18th Annual Conference for the International Association for Conflict Management, when it comes to sales negotiation, the most effective approach is Option #3: Several offers of roughly equivalent value. It seems that leading with a “best” offer or a “good, better, best” package can result in haggling or concessions.

However, research has found that presenting several “best” options – that all deliver roughly the same value – leads to more sales and more revenue. Choices make buyers feel in control, which makes them more likely to say yes and more satisfied with their decision. Unfortunately, this is contrary to what many sales reps think and do in business sales training workshops.

The Pitfall
The “good, better, best” approach seems to make intuitive sense, because you’re allowing the buyer to customize his or her own solution. But while this does give the buyer a sense of control – a good thing – it also risks dumping you into a protracted negotiation over what exactly should be in the “good,” “better” and “best” packages, and at what price. The research shows that you can make the buyer feel just as much in control, and reduce the risk of haggling, with several similar offers of equal value.

Action Steps to More Effectively Discuss Price with a Sales Prospect
Our sales microlearning library recommends 3 tips:

1. Prepare
   Internally, draft a series of similar offers – perhaps six to eight – that you can mix and match according to the situation. Get the help of your Marketing team if necessary.

2. Share Three
   Present three of these offers at your next sales negotiation. Don’t give the buyer so many that he or she gets confuse and ensure that they are all of roughly equivalent value in the eyes of your buyer.
   
3. Allow The Customer to Create a Fourth Option
   Since we are trying to give the buyer control and help get them exactly what they need, create the time and space for the buyer to mix and match components to create “their own” fourth option in a way that makes sense to them – and to you. You will be amazed by how much this process teaches you about what matters most to your buyer.

The Bottom Line
Too many sales people start a sales negotiation trying to anchor buyers on a high price, pushing their best offer to close quickly, or throwing in less attractive offers to help their case. All are a mistake. Give your buyer several compelling options of equal value so that they have the time and control to help create a solution that works best for them and for you.

To learn more about how to better negotiate, download The 2 Most Common Sales Negotiation Tactics to Prepare For