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Hurdles in the Sales Process: The Negotiation

You think you have never conducted a negotiation in your life, you are not a salesman after all? Then I’m sorry to disappoint you, because all of us negotiate in our daily lives. Whether it’s about what movie you go to with your partner, when you meet with your friends or when you ask the shoe salesman for a discount. We are in negotiating situations much more often than we think. Some of us do it professionally, others only privately. In your professional life, if you have chosen the job of a salesperson, you naturally want to perform well. In sales, it is therefore very important to be educated about all the factors of a sales meeting. In the following, you will read about the factors that determine the success of a sales meeting.


Preparation is the key to success

Like a sales meeting, a negotiation meeting also needs to be well prepared. The more information the seller can gather about the buyer, the better. The decision-making process at the customer must also be taken into account, as this is where the deal gets the green light or not. But not only information about the customer is important, because the competition and the market also indirectly affect the decision. Intercultural obstacles can arise during the conversation, since there are many differences in negotiation styles in-between cultures. You need to observe the interlocutor to understand his responses during your meeting. Before the meeting, you should also set the price limit up to which you want to close the deal. Besides that, setting main objectives for the meeting is important. Even if the customer is willing to buy the product, a negotiation meeting still does not have to be successfully concluded, for example if both parties cannot reach an agreement about the price. Therefore, a walk-away option is necessary to make future deals possible.


Stages of an International Negotiation Meeting

Preparation and planning: before starting a negotiation, the parties must first identify the initial conflict and the history leading to the negotiation. This also includes the people involved, as well as their perception of the conflict.

Definition of ground rules: Once the planning and strategy have been established, the parties have to start defining the ground rules and procedures regarding the negotiation itself. This could be e.g., where will it take place, what time constraints, and to what issues the negotiation is confined?

Clarification and justification: When initial proposals have been exchanged, both parties will explain, amplify, clarify, bolster and justify their original demands. The Clarification and justification-step need not be confrontational! Rather, this is an opportunity to educate and inform each other on the issues why they are important and how each arrived at their demands.

Bargaining and problem solving: The essence of a negotiation process is the actual exchange in trying to clear an agreement – a proper bargain. This is where concessions will need to be made by both parties. The seller and the client can reach an agreement utilizing tradeables. Tradeables can be, for example, the 7Ps – Price, Place, Product, Promotion, Process, People involved, Physical evidence. However, other things, such as the contract conditions or the terms of trades, are all effective ways to make a point. Here, too, the sensitivity of a successful salesperson becomes apparent, because he or she manages to uncover uncertain pain points and to react to them with confidence.

Closure and implementation: The final step in the process is a formalization of the final agreement.  This also includes developing follow-up procedures that are necessary for implementation and monitoring. For more complex negotiations, this step will require establishing the specifics in a formal and written contract.


People buy from people

Especially in a world where work processes are being digitized and human contact tends to diminish: Do not forget this sentence under any circumstances. The knowledge of this saying belongs to the small multiplication table in sales. It may sound trivial, but in practice it is often neglected. The saying says that people buy and sell – not machines. Therefore, it is enormously important to consider this in the entire sales process. A small tip, for example, for preparing for a meeting: Why don’t you search for your conversation partner on social media, maybe you’ll find common interests? This common interest can then be a small talk start to the conversation, so you both start the conversation much more familiar.

There’s an old saying that doing business is psychology. Psychology just means the knowledge about people. So, if you want to stand out as a good salesperson, show your counterpart emotional intelligence, make him feel good! Make a joke – that strengthens the connection and trust. Also, important: structure your meeting well and don’t make it too complicated; people like things they understand, so explain the benefits of your product simply and concretely – as practically as possible.

In a negotiation meeting, both parties want to achieve the best possible outcome for themselves. This can also mean that sometimes compromises and concessions have to be made. Creating trust to the customer and maintaining a positive attitude throughout the negotiation will support approaching the agreement – with the persuasion that you both will win. It is not just about negotiating the best price and hence generating the best profit for the seller, but rather about building a trustworthy relationship from which both parties can benefit now and in the future.


Authors: Nguyet Huynh, Heinrich Herwig, Lee Sauer (exchange students of Turku UAS)