How to negotiate a sale

Checklist

  1. 1 Before the negotiation begins, prepare yourself; aim to appear keen to do the deal, but not desperate.
  2. 2 Clarify your objectives (eg price, volume, or a quick sale) and how important the deal is to you.
  3. 3 Find out what the customer wants. What features or extras do they value, and what are their priorities - price, service or delivery?
  4. 4 Research the customer's position: how urgently they need your product, what they can afford and what alternatives the competition are offering.
  5. 5 Assess the value of your offering to the customer: what benefits it offers, what problems it solves for them, what alternatives it replaces.
  6. 6 Identify the strengths and weaknesses in your proposal and plan your strategy; aim to reach a deal which will suit the customer as well.
  7. 7 Decide what could be negotiable; try to identify concessions which would cost you little but which the customer would value.
  8. 8 Consider the potential impact on other deals and other customers of any concessions you make.
  9. 9 Clarify your terms and conditions from the start of the negotiation.
  10. 10 Pitch your opening price high; explain how the value in what you are offering justifies the price.
  11. 11 Agree what the negotiating points are.
  12. 12 Concentrate on asking questions and listening; fend off questions aimed at discovering your own negotiating position.
  13. 13 Test the strength of any concessions the customer asks for; ask whether they are deal-breakers, or what alternatives there are.
  14. 14 Look for reciprocation on any concessions you make: for example, an increased order size in exchange for a discount.
  15. 15 Summarise each point as it is agreed; shake hands on the deal when all the points have been covered, and follow up with a written agreement.

Cardinal rules

Do:

  • find out what the customer wants
  • decide in advance what areas you are prepared to negotiate
  • ask questions, and listen
  • aim for reciprocation on any concessions
  • confirm the deal with a written agreement

Don't:

  • make concessions from the start
  • reveal your negotiating position
  • throw in extra concessions for nothing