We Surveyed 6,600 Salespeople and This is What We Found
Negotiation is an important part of the running of any business. Whether looking to make an important deal with investors or customers, or negotiate an employment contract, it’s essential that you know how to negotiate and feel confident doing it. The world of sales revolves around negotiation, but it’s a skill that is often overlooked.
At Scotwork, we wanted to get a better understanding of how well people negotiate, where they consider the gaps in their skills are, and where they require further negotiation training, so we devised our Negotiating Capability Study to gain a greater insight into these areas.
We have spoken to 6,600 negotiators about how they feel about their own negotiating capabilities, understanding of the negotiation process, and areas that they feel that they would need help with. This was carried out through a questionnaire developed by Scotwork and has enabled us to draw conclusions and get a broad picture of the negotiation skills of salespeople today.
The ability to negotiate effectively is critical for all businesses regardless of whether they are buying or selling. We all know someone who we perceive to be good at negotiation, and whilst it might seem to be potluck, there is actually a lot of skill involved. Successful negotiation involves planning, being able to take a step back, and understanding value.
With this in mind, here are some of the most important insights that we gained through the Negotiating Capability Survey.
85% of sales negotiators don’t establish what the other side wants upfront
When you negotiate an agreement with someone, it must be beneficial for both sides. The other side are also looking for an outcome from the negotiation, so it’s important that negotiators look to establish what is important to them. Not only does this allow negotiators to assess the value of different components of the deal to the other side, but it allows them to emphasise this and ask for something in return that is of equal or greater value.
“The more that unskilled negotiators feel that the other party has an advantage, the more likely they are to offer them the negotiator’s equivalent of a free piano, and the less likely the other party is to be impressed by it”
David Bannister, Director
Over 80% of sales negotiators have no fallback plan
When people are going into a negotiation, it’s important that they have a plan and a list of objectives that are ranked in order of importance. Within this plan, there should also be a fallback plan in case they cannot get the outcome that they were hoping for. This might include having a walk-away point – knowing the limit that they’re prepared to go to before they would break off the negotiation.
“Limit is your walk-away point. Limit is most effective when you know it before you begin negotiating. Trying to define it in the heat of the moment will only compromise your position.”
Brian Buck, CEO
Over 60% of salespeople can’t always see the benefits of the outcomes of their negotiations
Before people go into a negotiation, it’s important to understand what success looks like. This involves knowing the objectives and the importance of each. It’s not easy to negotiate something if they themselves don’t know what they want out of it. By knowing the impact of the negotiation, they can judge how successful it had been.
“The reality is, in many negotiation scenarios, the client or supplier I am dealing with today may be a long-term partner, and the more effectively we can work together, in the long-term it’s better for me.”
Alan Smith, Associate Director
Just half of salespeople consider what’s important to them before they begin negotiating
Similarly, it’s vital for negotiators to understand what is important to themselves before beginning the negotiation. This way they can decide what aspects of the deal they are prepared to give up, and which parts they will not move on. With this in mind, a deal that both parties are happy with can be reached.
“Expert negotiators understand what they have to get and where they can be flexible”
Horace McDonald, Sales & Marketing Director
What Can Salespeople do to Improve Their Negotiations?
The survey has given us important information about the skills that negotiators have, as well as the gaps in their knowledge that need filling. Some of the key takeaways that we have taken from our Negotiating Capability Survey include:
Be Prepared
Preparation is the key to a successful negotiation. Poor preparation leads to an unsatisfactory negotiation – potentially deadlock and frustration. When preparing for a negotiation, people should:
Actively Listen
Remember that both parties are looking for something out of the negotiation. To ensure that they get what you want out of the deal, negotiators need to be able to understand the value of what they want. And to be able to do this, they must be able to actively listen to the other party. Listening also enables them to identify what they don’t know – the ‘unknown unknowns’ – and ensure that they adapt your strategy accordingly.
“The skillful negotiator uses silence to his or her advantage, is curious about the responses to their questions and switches off the transmitter regularly to listen attentively to the other sides issues, signals and flexibility”
Alan Smith, Associate Director
Be Flexible
One of the biggest mistakes that unskilled negotiators make is to be inflexible. Negotiation is a live situation that involves give and take until both parties are happy that they are getting what they need out of the deal. Flexibility is an important feature for expert negotiators, enabling them to manipulate the situation until they have an outcome that they are happy with.
“A great negotiator is able to create flexibility for themselves in a negotiation by having a list of both “wish list” items and a good strong list of meaningful concessions.”
Robin Copland, Director
Continuously Evaluate Efforts
Any negotiation involves making some concessions. A negotiator’s ability to continuously evaluate the situation helps them to gain the best outcome. If they are able to continually assess the value of certain aspects of the deal to the other party, they then have the power to negotiate a deal that both parties are happy with.
There are several aspects to being a successful negotiator: the ability to look at a negotiation with a clear head and a planned strategy, be flexible along the way and actively listen to the other party.
Our Negotiating Capability Survey has highlighted that these are some of the areas that people struggle with the most – but they are also areas that can be learnt. For more details about the survey and how people answered, you can download the full survey below:
