My friend Jake in enterprise software sales had been chasing a deal for weeks. He finally landed a meeting with the big e-commerce company, and things were looking good. They loved the product, they saw the value, and he was sure he had it in his bag.

Then, right when things were wrapping up, the CFO hit him with: ‘We like it, but your competitor is offering a lower price. Why should we go with you?’

Now, a lot of salespeople would panic at this point. But Jake? He didn’t even flinch - because he was ready for it. He had done his homework. Instead of arguing about price, he pulled out data from other businesses just like theirs, showing how his software helped them cut operational costs by 25% in a year. Suddenly, the conversation wasn’t about price anymore – it was about value. The deal was undeniable, and the CFO agreed to the purchase.

They shook hands on it, and that’s how Jake closed the deal.

Sales negotiations aren’t about having the smoothest pitch or the perfect response at the moment. Read the room and treat it like a conversation. It will flow.

Read this blog to find out more about sales negotiations, how to prepare effectively, some tips on how to get better at your skill and common mistakes to avoid.

What is sales negotiation?

Sales negotiation is the process of finding a balance between business goals and customer needs, ensuring a win-win deal.

While sales representatives tirelessly work to generate revenue for the company, the goal is to build long-lasting relationships with customers and keep them happy.

Before a potential prospect converts into a paying customer and the sale is finalized, a series of sales negotiations take place between the buyer and seller, often to arrive at a deal that is a win-win for both parties, making sure the benefits are mutual.

These sales negotiations unfold differently, and the approach you take can make all the difference. Let’s understand what they are and how they impact the sales process.

What are the different types of negotiations?

🔃 Distributive negotiation 

In this kind of negotiation, a power play occurs when both parties try to win the negotiation to maximize their gains. This is a win-lose situation and does not lead to forming long-lasting relationships. 

🥳 Integrative negotiation 

This type of sales negotiation is a classic example of a win-win situation where both parties gain equally from the deal. The goal here is to retain customers and maintain a healthy and lasting bond with them.

👬🏽 Multi-party negotiation 

Two or more parties are involved in this type of negotiation, making it more complex. Each of them tries to negotiate on different terms such as cost, responsibilities, and profit. It is important that you have the right set of skills to land on a mutually agreeable deal in such cases.

🫱🏾‍🫲🏽 Principled negotiation 

Sales negotiation is done on fair grounds here. Both parties objectively try to understand each other and what they’re expecting of each other from the deal. It is logical, transparent, and beneficial to both. 

👨‍👩‍👦‍👦 Team negotiation 

This is a group vs. group negotiation where not just one but multiple people on each team are involved. In such cases, teamwork and coordination are essential to arrive at a clear conclusion. 

How to prepare for effective sales negotiations?

Holding negotiation discussions requires effort; here are a few common ones you must keep in mind:

👩🏽‍💻 Research your prospect 

This is the first step not only in sales negotiation but also in sales as a whole. Perform extensive research on your prospect, what they do, their pain points, and their desired solution, then align your offerings. This helps you narrow down customers and focus on high-value clients who are more likely to benefit from your offer.

📝 Conduct competitive research

Next, conduct competitive research to establish clear pricing for your offerings against existing products/services in the market by proposing clear value. 

📄 Set clear objectives 

Before entering into any kind of communication with your customer, the objectives of the deal must be made clear. What is it exactly that both parties are looking for?

💡 Propose a value 

Once you have set objectives, communicate the unique selling points (USPs) of your product or service to your clients. Highlight how your offering can make their life easier and what problems they will cater to.

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🚧 Anticipate Objections

Your clients are likely to have concerns, therefore make a list of objections and prepare to handle them while reinforcing value.

📲 Gather social evidence

Collect case studies, testimonials, and data to reinforce your value proposition and demonstrate credibility. Real-world results help establish trust. 

What are some tips to get better at sales negotiations?

You probably already know a great deal about negotiating, but these common tips can help hone your skill:

👂🏼 Active listening 

Actively listening to the customer during a sales negotiation helps you understand what they are expecting out of this purchase. This will in turn aid them in crafting a suitable solution and answering any concerns or queries they may have. It also shows that you value their opinions and are willing to go the extra mile to provide personalized customizations.

📑 Art of Persuasion 

Providing your customers with proof of testimonials from customers or social media will add to your credibility. It encourages the customer to place trust on solid grounds. 

🫱🏾‍🫲🏽 Always lead the discussion 

Be proactive and initiate the conversation with confidence. Making the first offer helps you set the foundation for negotiations, allowing you to guide the discussion effectively. 

For example, if you start by quoting, “Our price is $1000”, then the buyer will use that as his/her reference point. Even if they negotiate for a lower price, they will use the original one to compare.

 🧘🏼‍♂️ Regulate your emotions

When you’re trying to make a sale or negotiate, remember that you’re confronted with people whose decisions are sometimes emotionally driven. As a salesperson, maintaining composure during sales negotiations is key to closing a deal and retaining customer loyalty.

If the opposite party feels understood, respected, and valued, they’re likely to come back for another purchase or refer you in their network, leading sales to rise.

💡 Highlight solution, not features 

Focus on the solution, not just the feature, when presenting your product or service. Buyers care about features, but what truly convinces them is seeing how it directly benefits their business. 

Shift their mindset from “This person is selling me something” to “This product can actually help us.” Appealing to both logic and emotion is key.

👌🏼 Handle objections efficiently 

Objections in sales negotiations often stem from concerns about price, trust, or better offers. When buyers hesitate, reinforce the value of your product by addressing their concerns directly and highlighting its benefits. Create a sense of urgency with time-sensitive opportunities, then confirm their readiness to move forward. With the right approach, you can turn hesitation into a confident ‘yes.’

What are common mistakes to avoid during sales negotiation?

The greatest of minds make mistakes, and here are a few you should avoid during sales negotiations:

❌ Talking too much/over justifying 

Avoid talking too much during a sales presentation or negotiation without having to listen to what the client has to say.

Such behavior is off-putting and can lead to losing a sale. Instead, encourage reciprocity in conversation. Let them address their concern, ask questions, and discuss doubts. The goal here is to make their collaboration feel valued.

☹️ Offering early concessions 

Avoid lowering your offer value the moment you feel like the deal is slipping out of your hands. This indicates you don’t have as much faith in the product.

🙅🏽 Saying yes too quickly 

If your client makes an offer, do not hurry and be quick to say yes and close the deal. Take a pause, think about it, and make a counter-offer to score a better deal that is beneficial to both parties

For example: If someone offers to buy 15 items for a lower price, instead of agreeing to it immediately, tell them that if they bought 25 items in bulk, you would provide them a special discount.

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There will be times when you might have to hold sales negotiation meetings online, which have its own set of challenges. Let's understand how these discussions can be different from when they are face-to-face.

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Conclusion

To wrap things up, remember that being good at sales negotiation takes practice. Whether you're doing it online or in person, the key is to know your stuff, build a positive relationship with the buyer, and find solutions that work for everyone.