Sales Negotiation: Definition, Skills and Tips

By Indeed Editorial Team

Updated February 24, 2022 | Published April 26, 2021

Updated February 24, 2022

Published April 26, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Sales representatives work with customers to sell products for their company, and sometimes customers might want something different from what is being offered. In these cases, a sales negotiation takes place so both the sales representative and customer reach an agreement. It ensures a profitable transaction and customer satisfaction. In this article, we discuss what a sales negotiation is, why it's an important skill for sales representatives and offer tips for conducting an effective negotiation.

What is a sales negotiation?

A sales negotiation is a discussion between a buyer and a seller to make a sales deal. These negotiations allow sellers to address a buyer's concerns about a purchase by reestablishing the value of the product or service and making compromises. These discussions also allow sellers and buyers to part ways amicably if necessary.

Related: How To Negotiate Product Prices With Customers

Why is it important to know how to negotiate sales?

Negotiating sales is important for both buyers and sellers, and it's a skill that sales representatives will probably use frequently in their careers. Here are some reasons for sales representatives to know how to negotiate sales:

Make more deals

To make a deal, a sales representative and a customer agree on the specifics of a purchase. These specifics could include a change in the price, different contract terms or additional gifts. Sales negotiations are how representatives make deals with customers who want to change the specifics of a purchase, which is important in the context of a company's profits.

Increase sales

To increase sales, a representative can negotiate with hesitant customers and convince them to make a purchase. This is beneficial to the company making a profit and to the customer when negotiations often lead to extra benefits and lower prices. With negotiation, a representative can sometimes make more sales than if they didn't attempt a compromise.

Related: What Does It Mean To Earn Sales Commission? Definition, Types and Examples

Connect with customers

Sales negotiations are a great way to make customers feel engaged with the company and product. When representatives are open to negotiation, they are often listening to customers and showing they respect their concerns. People who feel comfortable negotiating with a company's sales representatives may be more likely to make purchases in the future.

Learn what customers want and need

Negotiations are also a great way to find out what customers want and need from a product. Representatives who negotiate well find out exactly what concerns customers have. They can then use that information to help their sales team change products, create specials or market differently.

Counter-offer effectively

Another benefit of knowing how to negotiate sales is that representatives can effectively give a counter-offer to customers who want to change the specifics of a purchase. With excellent negotiation skills, the representative can keep calm and make a sale for a profit by encouraging the customer to compromise as well.

Tips for conducting a sales negotiation

Consider following these tips to help you when conducting a sales negotiation:

Be prepared

It's important to know about your customers to negotiate with them effectively. If you're negotiating over email or have spoken with this customer before, try to prepare your negotiation by understanding why they want the product and how much they will pay for it. With this knowledge, you can offer specific compromises for them and possibly close the deal.

Read more: Negotiation Skills: Definitions and Examples

Identify decision-makers

Decision-makers are the customers who decide whether they will make a purchase. For example, if a mother is shopping with her children, the mother is the decision-maker because she will be the one making purchases. When you begin a negotiation, try to identify who the decision-maker is so you can direct your attention to them and increase the chances of closing a deal.

Actively listen

When negotiating with a customer, use active listening to address their concerns thoroughly and understand what they want from a purchase. This can help you answer questions they have and offer the best solutions for compromise to convince customers to make a purchase while also making them feel respected.

Strategize

For some negotiations, consider stepping away from the customer to strategize with your team. This can be helpful if you need advice on what compromises to suggest or what concessions you're allowed to make to close the deal. Doing this also gives you a moment to clear your head and prepare a better response when you reenter the negotiation.

Address underlying concerns

Sometimes, customers can't articulate their concerns with a purchase, so it's helpful if you can determine and address the underlying concerns of their hesitation to buy. It may take some practice, so pay attention to the typical reasons customers want to walk away or negotiate and use that information to predict a customer's underlying concerns.

Stay positive

When negotiating, remember to stay positive and make the experience a pleasant one for the customer. This can help you maintain good customer relations, which can create repeat customers and generate potential leads. In addition, customers often enjoy talking to positive representatives, so you may reach an acceptable agreement more easily.

Build trust

Building trust between yourself and your customer is another good way to conduct a sales negotiation. Being thoughtful, respectful and honest allows customers to trust what you say about the quality of a product and the value of the deal you're offering. Practice building trust with repeat customers to get to know your target demographics and encourage them to tell their friends and family about your products.

Use empathy

It's important to remember that your customers are people, so practice empathy when conducting negotiations. When listening to their concerns, try to give them options that will truly address any issues they have with the purchase, and be respectful even if they opt out of the deal. Your empathy and kindness could mean those customers return to make a purchase at a later date or recommend your company to their friends and family.

Related: Sales Job Skills: Definition, Examples and Tips

Emphasize value

When customers negotiate, they are typically looking for a good deal, which may include a discount or lowered price. A successful sales negotiator will emphasize the value of the deal they're offering so that customers feel they are still getting what they want, even when they also agree to a compromise.

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