Negotiations take time. It’s extremely rare that a real business deal gets done in the first meeting, and with time, comes uncertainty. This uncertainty can bring with it any number of factors that could hinder or break a deal. To avoid this epic pitfall, here are five reasons negotiations fall through and how you can prevent them from happening:
- Timing – Sometimes people enter a sales funnel when they aren't ready to buy. Whether a marketing person hooked them in at the wrong time or they approached you for information and you tried to upsell, timing may not be on your side when it comes to certain deals. If you come to a point where the timing is clearly off, don’t try to push them into doing something. This takes away your position in a deal right from the beginning and quite honestly its not fun to sell that way. Take a position that you are going to put the ball in their court, and they can get back to you when they are ready to buy something great. This convey's value in what you are selling and value in what you do.
- Budget – During a contract negotiation, it’s common to understate your actual budget in order to try and secure a lower purchase price. This strategy is used fairly often and it’s something you should be looking for as a salesperson. However, there are times where the low budget is the actual number they have to work with. If this is the case, you can’t keep pushing a larger deal because it just isn’t going to happen. Take their budget for what it is after you feel it out, and try to work with them to accomplish their goals. Create a win-win, but be careful to not discount your products too much. It will damage your credibility quickly.
- Stakeholders – New stakeholders get up and sit down at the table during every negotiation. Sometimes people bring in their boss to sign, sometimes they bring in a subordinate to review the product. All of these people have influence on the situation in one way or another. And if any one leaves, the entire negotiation could be quickly thrown in a different direction. Great sales people can feel this out and respond accordingly. Before the negotiation, try to prepare yourself for any key stakeholders that may enter the ring. Make sure you understand why each person is their driver on the final decision.
- Terms – This happens frequently. Two people sit down with a mutual goal in mind, but they can’t seem to get there. Just when you think the deal is done, one side finds a small detail and turns it into a catastrophe. If you run into this situation, you have not listened well for the deal drivers. Really try to see their driver, this will help determine if you can meet them somewhere in the middle. If the other side is making ridiculous claims and asking for far too low of a price, you are working with the wrong person in the first place. This could damage your credibility as a negotiator, not to mention the brand of the company you work for. If you can’t agree on terms, first see if you can salvage the deal. But sometimes, all you can do is walk away.
- Negativity – It’s nearly impossible to get a deal done when someone doesn't feel good about it. Before you ask for the close, make sure there is a deal to close. Both sides have clear expectations for the product they are purchasing. If the other person walks away feeling like they’ve won, you’ve won too.
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