Lesson 47 - Negotiate Like a Pro

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Negotiation is about ensuring you and your prospect can reach a deal that is mutually agreeable (and provides great value) to all parties. This lesson will teach you negotiation strategies, including how to work with deal desk, concepts like BATNA, and thinking outside the box when it comes to concessions. Your assignment will involve planning for an upcoming negotiation, including your key asks and potential concessions.

Transcript

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Nicholas, welcome back to the daily quota. I'm your host, Nicholas Hill, and in today's lesson, we're diving into the art of negotiation. Now negotiating is a critical skill for any sales professional, and it can make or break your ability to close deals. Today we're going to be talking through when you should negotiate, how to understand what both sides want and ways that you can get creative with your deal structures. Before we do that, we need to talk about deal desk if your organization has a deal Desk team, you should meet with them, and you should absolutely begin to understand the way that these teams can structure or negotiate deals on your behalf. A deal. Desk team is incredibly innovative at being able to come up with unique structures that can get a deal done. Now you might not call it a deal Desk team. You might call it a deal review team or negotiations team, but whatever the case, you need to understand what resources you have at your disposal for getting a deal across the finish line when you've agreed to move forward but can't agree on pricing or terms, so lean on your deal Desk team early in the process. Understand what's possible. Ask them about things like pricing tiers, discount structures, multi year, step up agreements. Any other ways they've been able to get creative in the past, and don't hesitate to get them involved in a negotiation early on often, they can provide guidance, options, things that they've seen in other deals that you might not have considered. All right, let's dive into negotiation. So the first question you need to answer when you're about to close the deal is, am I even at the right stage to negotiate. What I mean by that is negotiation should really only be done once you and the prospect have agreed that your solution is the solution for them. They've evaluated, they understand the value you're tied to a significant business challenge, you've confirmed budget alignment, you have verbal buy in from the key decision makers, including the economic buyer, and that will allow you to then negotiate from a position of strength. If the prospect is fixated solely on price, if they're trying to force terms that put your company at risk or a disadvantage, it's probably better to politely exit the negotiation, let them know that the terms of the proposed agreement are fixed. Your time and your resources are valuable, right? Make sure that you're investing them in deals that are mutually beneficial. Once you've decided it is right that you're at the right stage to negotiate that it makes sense to do so, then you should do some discovery to understand what your prospect wants to get out of the deal. Now, if you're early in your sales career, you might think, Well, don't they just want the best price, but that is not always the case. What they want is the best value and the best experience. So price is definitely going to play a factor, but they will also be thinking about things like implementation time. How long is it going to take to get off the ground? Change Management, flexible payment terms, access to your product roadmap or beta features, priority customer support, dedicated account management. They might be thinking about things like guaranteed uptime percentages. You know, maybe they they want your product to have, like a 99 point something percent, guaranteed uptime, training and onboarding packages or professional services that come with the deal, co marketing opportunities. Maybe they want to use, maybe you can use their name, or, you know, vice versa, data migration. They want to know that data migration will be a smooth and seamless process, integration with existing tech stack, assistance, right? Assistance with those integrations. So they will want these things to be laid out in the agreement, right? And so it's not always about price. It's not always about length of contract. The list goes on and on, and on. Right? Think about the different things that your prospect wants, and what are those things that might exist outside of price. And remember that your goals go beyond price too, right? Ultimately, you want a satisfied customer that's going to do business with your organization long term. So negotiating for you is not just about price. If you're only negotiating on price, that could be a missed opportunity. You want to think about multi year agreements offering discounts for committing to a longer term contract, which secures revenue, predictable revenue for your company long term, and it provides the customer with cost predictability which they like. Step Up agreements allow the customer to start at a lower price point and then incrementally increase over time, which makes it easier for them to budget and allows you to gradually reach your target pricing goal, usage based pricing, or tiered discounts. This could be. Something where you adjust pricing based on usage threshold thresholds. You offer tiered discounts for higher usage that can incentivize the customer to expand their use of your product, flexible payment terms, offering deferred payments or custom payment schedules that can help cash flow constrain prospects to move forward with with a deal and then adding services, so thinking about onboarding or consulting or change management services, so enhancing the value of your offering by including onboarding, training, consulting, helping to ensure that once they have your product that they'll achieve success with it. And then co marketing opportunities. I mentioned this on the prospect side, but co marketing means that both parties work together on promotional activities that benefit each other's brand. So this could be a joint webinar, case studies, shared social media campaigns, co branded content, blog posts, white papers, events, and you can use CO marketing as a bargaining chip, which will add visibility or thought leadership for your organization, it's especially valuable if your customer is a well known brand, remember everything that I just mentioned, always check it with your deal desk, team with your manager, you know, make sure that these things are allowed. They may not be allowed per your finance or legal team. Another powerful tool in negotiation is understanding what's called a BATNA. You may have heard this term before, B, A, T, n, a, the best alternative to a negotiated agreement. BATNA is basically what is your backup plan if this agreement falls through. So thinking about if this deal doesn't close, do you have other prospects in your pipeline that are going to get you to your number and then, what is their BATNA? Do they have other vendors that they can fall back on? What is their What is the urgency? What is the negative consequence of them not making a decision? You need to understand their alternatives and your alternatives knowing that the BATNA, your BATNA, their BATNA, can give you leverage in negotiations, if you know that their alternatives are weak or have potentially horrendous negative consequences, then you have the upper hand in your negotiation. And conversely, if your backup options are slim and you really need to get to your number, you may need to get more creative in your negotiating tactics. A few final tips on negotiation. One, don't open with concessions, right? Your product is valuable. Your solution is valuable. You need to anchor high in your initial conversations and be slow to make concessions. This sets the tone that you're confident in the value of your solution. Second, use silence to your advantage. Once you've made an offer, stop talking. Let the prospect consider that offer. Let them mull it over. You don't need to feel compelled to speak. And a lot of times, people will just see who speaks first, because that's normally the person that's going to make a concession. And then finally, you should always follow a give to get philosophy right. We're not here to take, take, take. The goal is to give something, give value and get value in return. This is a mutual exchange of value. So if you're offering a discount, you should be asking for something in return, longer commitment, additional licenses, step up agreement, ela, or enterprise level agreement where you're going, kind of wall to wall within an organization. This keeps the negotiation balanced. It reinforces the value of what you're offering. All right, now it's your turn for your assignment. You're going to select an active opportunity and evaluate your negotiating your negotiation strategy for that opportunity. So identify your key negotiation levers, talk to deal desk, if you have one, understand your best alternative to a negotiated agreement. If that deal falls through, how else are you going to get to your number? Develop a plan to address potential objections, and then build your overall negotiation strategy tailored to that specific deal. Finally, you should create a mock negotiation scenario with a peer and practice this negotiation, these can be tense. They can be difficult to do in the moment. Work with your peer, your mentor, your manager, your new hire buddy, your study guide, will help to walk you through this, and that's it for today's lesson on the daily quota. Thank you for listening, and we'll see you next time you.