I’ve learned so much about sales from being a proud father of three — not the least of which is the art of negotiation.
From after-school snacks, to TV time, to bedtime routines, not a day goes by where my kids don’t challenge the house rules to better their personal situation.
Kid: “Daddy?” [holding a bag of chocolates] “Can I have these chocolates?”
Me: “The whole bag?!? No.”
Kid: “Can I have five?” [holding a handful]
Me: “No, you can have ONE.”
Kid: “Four?” [still holding a handful]
Kid: “Aw, c’mon!” [already stuffing chocolates into their mouth]
What is it about kids that makes them killer negotiators? How are they able to relentlessly pursue their desired goal while still giving the illusion that they’re engaging in a give-and-take negotiating framework?
After many years working with and coaching professional salespeople — and of course, being a dad — the answer has become clear: Children are the best negotiators for three reasons:
- They have a clear and focused end-goal
- They’re extremely persistent
- They’re not encumbered by the knowledge of what a good deal is! (i.e. they’re unconsciously unreasonable)
Think about it. In business negotiations, we have rules and constraints like operating margins, payment terms, legal requirements, and we often come to the table with complex discount and approval matrices for our products and services. As a sales rep, when it comes to negotiating, you know what these parameters are and you do your best to work within them. But what happens when we become too familiar with these constraints?
The Curse of Familiarity
Back at Salesforce, one of the reps on my team, who had been with the organization for a number of years, was negotiating a licensing agreement. Having been through many similar deal and negotiation cycles, he knew that under most circumstances he had the ability to offer a 25% discount on a particular product line. Over time, he would often let customers quickly negotiate him to this position before pushing back. Not surprisingly, most of his deals tended to conclude with these parameters.
On the other hand, one of my newer reps, less familiar with selling the very same product line, operated under a different set of directives. Her goal was simply to maximize the revenue and payments of each opportunity. She operated under the assumption that a 10% discount was more than generous and negotiated to that end with her clients. Over time, her average discount rate was consistently less.
In a negotiation, we’re often encumbered by our own experiences and knowledge of a what a good deal looks like.
This applies not only to prices for goods and services but also to secondary constraints like delivery timelines, and terms and conditions. We also (especially in North America) tend to negotiate with an innate sense of fairness, even though our clients are often unaware of what our business constraints are.
Delivering a Win-Win Negotiation
Negotiation is, to a large degree, rooted in satisfaction, and in most cases, clients are simply looking for concessions (e.g. a discount without a prescribed magnitude) to fuel that sense of satisfaction. They want to feel as though they got a good deal.
So how can you negotiate within a win-win framework while at the same time protecting your margins? Well, instead of moving to a 15% discount off the bat, put yourself in a beginners mindset. Start with a 5% discount and operate as though that 5% discount is considered a very good deal (which indeed it might be). Then, if you do need to provide concessions give them slowly and deliberately. For example, instead of jumping from a 5% to 10% discount, move to 7%. In sales as in life, people don’t appreciate things that come too easily. A mindful negotiation practice can significantly build up your client’s levels of satisfaction and create the win-win experience you’re looking to deliver.
Negotiating in good faith and helping your clients reach a mutually satisfying agreement is the hallmark of any top-notch sales rep. When in doubt, taking a lesson from our children and forgetting everything you know about what a reasonable outcome may be the killer strategy you’re looking for!
Looking for more helpful negotiation tactics? Check out my 4 Tips for Negotiating at Month-End.