The art of negotiation in sales

What is negotiation?

Is it a life-and-death struggle? A battle where if you win, I lose, and if you lose, I win? Is it about tricking someone, or browbeating them into paying you more or taking less? Is it about pride, respect and personal prestige?

Nine times out of ten, the answer to all of these is no.

Why most negotiations aren't a zero-sum game

The problem is that most people treat negotiation as a zero-sum game: one side triumphs and the other is defeated. But that's rarely the case.

If it were, why would anyone do a deal in the first place? Why would someone agree to a deal that's bad for them?

The vast majority of the time, a negotiation is a positive-sum game: a win-win where both sides benefit. That's the whole reason you've got as far as negotiating.

So you're not fighting over the pie, with the victor enjoying its delicious spoils. You're deciding what share of the pie each side gets.

Understanding that is the first step to becoming a better negotiator.

How to prepare for a negotiation

Once you see it like this, preparing for a negotiation is easy. Work through it in this order:

1. What the other side wants, and why.
2. What you want, and why.
3. The arguments, rational and emotional, on each side.
4. The arguments for making the deal, and for walking away.

With that framework in place, it's very easy to see what game you're playing.

How to run the negotiation

Weigh up the ledger. Decide the minimum share of the pie you'll accept and the maximum you'll ask for.

Then make your arguments and counter-arguments, and push for as much as you can. Either you get a share you can accept, or you walk away.

What about the cut-throat negotiations you see in films?

They exist, but they're rare. Sometimes negotiations are contentious, and tricks and coercion come into play. That's a zero-sum game.

So the first job is to recognise which game you're playing.

Why negotiation in sales is almost never zero-sum

In sales, it's almost never a zero-sum game. Unless you're selling immorally, you should be convinced that what you sell will do the prospect more good than it costs them.

Seen in this light, you negotiate from a position of strength, inside a framework you fully understand that leaves nothing to chance. And, crucially, you create win-win outcomes. Those lay the groundwork for repeat business and referrals, which make you far more money in the long run.

A lesson from the City: play the long game

When I worked in the City of London, I negotiated as a broker between parties I did business with often, sometimes every day. Some brokers treated those negotiations as a zero-sum game. It was a very fast way to lose people's trust and confidence.

Being reasonable, and sometimes giving ground on points that you and your client didn't really care about, built goodwill. It also created a debt you could call in later, on the points that mattered more.

So think long term, have a strategy, and remember every concession on both sides. That's how you keep winning the larger share of the pie while gaining and keeping trust.

Each side often wants a different piece of the pie

I always thought about incentives, not just for the deal in front of me but for the long term. And those incentives were often slightly different for each side.

For example, the other side might not want to concede on a specific point. But their incentive to keep doing business with us mattered far more to them. So when a point was critical to my client but only of medium or low importance to them, I used that bigger incentive as leverage. They acted against their own interests on the smaller point, and still felt they were winning the deal.

This is where the complexity comes in. Often the two sides don't even want the same pieces of the pie. Understand that and plan for it, and you can get absolutely everything you wanted while the other side feels they got absolutely everything they wanted.

Because they did.

The trap bad negotiators fall into

Bad negotiators in sales turn deals into zero-sum games. They win in the short term and lose in the long term.

Don't fall into that trap, and you'll reap the rewards.