*Editors Note: Guest post by Ben Sardella, Co-Founder at Datanyze. This blog post is a recap of the Deck he presented at Sales Hacker Series in San Francisco on October 23rd, 2014. SlideDeck is viewable below.
The relationships we have with our clients are cultivated for a very long time. Negotiations are a mutual agreement where both parties feel like they got something out of the deal and you don’t “win” a negotiation by making the other person lose. So as you approach your negotiations, make sure you’re approaching them with a win-win attitude, especially if you’re in the SaaS space.
Think: When does the negotiation process actually begin?
When you take a step back and think about negotiations, it’s really all about qualification. When you qualify a deal the right way from the start, you know where the negotiations are going to be headed when it’s time to talk about price, contract terms, etc. You also will know what objections that might come up.
A “Mutual Action Plan” can kickstart the negotiation process by simply coming to an agreement on the series of events and common interests.
Think: How would you buy from yourself?
If you haven’t thought about that as a salesperson, you should probably stop and think through how you’ve purchased software for your organization, or you’ve seen members of your organization purchase some solution of service, ask them how they went about that process. That’s really going to give you some insights how your own customers are buying from you.
Build a buying process map with the knowledge that you have of buying services yourself, as well as how your customer’s have purchased in the past, looking at what it takes to make buyer make that final decision to work with you and what steps they take along the way is critical for your success as a salesperson.
Too often, we build a sales process to match our goals that we need to close a deal, instead of mapping that to the goals that align with our buyers. Taking the steps to build a buying process map will give great insights on when and what the negotiations and objections will be.
Take it a step further by creating a buyer persona map that has targeted messaging, benefits, and expected objections. For example, a CEO is going to have different objections that a VP of Sales, or the VP of Marketing, etc. So aligning what you feel would be the benefits as well as the objections that are going to come up from these individuals as you interacts with them during the process is really key to understanding what pitfalls you may run into and how the conversations are going to go.
4 Typical Objections
1. Not interested / Resistance to Change
This is one of the most difficult, but most common objection that we deal with when we try to sell. But the reason that this comes up in a lot of cases is that we likely did not qualify properly. They’re telling you “There just isn’t enough pain, and the status quo is perfectly fine with that.”
In this scenario, the next steps to take are asking probing questions to uncover areas of pain that you’ve seen from similar customers. Get into an agreement that if they were to solve their pain points they’d be able to see some ROI in a given time, then they would be interested in making that change sooner rather than later.
2. Need to Get Approval / Not the Decision Maker
You’re not dealing with the decision maker. So in this case, ask the right questions to get in front of the decision maker early. If someone is dragging you along and you’re not talking to an executive that’s going to sponsor this project, you’re likely to have a long and dragged out sales cycle. In the end, it may never get in front of the person that you need to engage with.
Don’t tie yourself just to the end user, also think about the overall value that the company is going to get to overcome the objections that executives may have.
[Tweet “Ask the right questions to get in front of the decision maker early.”]
3. Timing
When that happens, it means that we haven’t established the cost of doing nothing yet. They probably like your service but there is just no immediate urgency for it. So understanding the short term and long term goals of your customer is really important in this case.
A lot of times if you’re in SaaS, you could ask “What if I offered you this product for Free, and started to charge you in 2 months. Would you close the deal then?” If it’s a “yes” just not right now, then challenge the buy by offering flexibility in your contract terms such as a free month or lower monthly costs to start at the beginning of the term.
Asking questions like that will help you figure out what is really important to them right now.
4. Cost / Lack of Budget
There’s never been once when there wasn’t enough budget to address the pain we had, or for a customer to buy something to address a pain that was immediate and urgent.
Haven’t established ROI/value above status quo/current pain (remember, budget always exists if the pain or return is too great to ignore). Overcome this common sales objection by getting back to the value you provide and the cost of not selecting your service.
Also, target those areas where those budget dollars are being spent for the same results. For example, if you’re selling into marketing, chances are they’re spending budget on content. Leverage your service to help them out in those areas.
[Tweet “Overcoming Objections: There’s never been once when there wasn’t enough budget to address the pain we had.”]
5 Most Important Questions to Ask to help lower barriers (e.g. objections) in future negotiations
If you won:
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- What events happened recently that led up to the purchase?
- When did this happen?
- What made you choose us?
- How could we have made it easier to become a customer?
- Do you know anybody who has gone through the same events recently that could use our service?
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If you lost a deal or lost a customer:
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- What events happened recently that led up to the purchase/decision?
- When did this happen?
- What made you choose our competitor over us?
- How could we have made it easier to choose us (or less likely to leave us)?
- Do you know anybody who has gone through the same events recently that could use our service?
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Take findings from questions and do a force field analysis from deals won and deals lost – focus on reducing common barriers/objections for future deals.