Sales · · 7 min read

Closing Deals: The Fundamentals of Sales Negotiation

To close more deals consistently, try sales negotiation strategies such as emphasizing losses, combining gains, and avoiding ranges. Here’s an in-depth look.


Life without compromise is life without growth. The same goes for sales. We can’t always have the deal we want. There should be a mutually beneficial compromise.

That’s where sales negotiation comes in.

Buyers and sellers won’t always agree on a deal. But, the right strategies can consistently ensure a positive buyer experience, prevent misunderstandings, and close more sales.

So, if you’re ready to start closing more deals, stick around! In this guide, you’ll learn:

  • The basics of sales negotiation
  • The benefits of sales negotiation
  • Real-world negotiation skills you need to learn
  • Sales negotiation strategies you can follow

What is a Sales Negotiation?

A sales negotiation happens during the final stages of your sales funnel. Buyers might have concerns about price, product features, timeline, or onboarding.

There will be cases where both parties don’t come to a compromise. It happens a lot. Even if you can’t close a deal, ensure your prospects have a positive experience.

Some negotiations can be done after the first meetings. Others, like in the case of enterprise sales, can stretch out across sales cycles.

No matter what industry you’re in, learning sales negotiation tactics can help your business make the most out of every call, meeting, or product demo. And the benefits don’t stop there!

Sales Negotiation Benefits

Including negotiation techniques in our pipelines allows for dynamic sales strategies. It helps us avoid conflicts, prevent miscommunication, and build trust.

Trust and respect are essential at this stage as they can lead to more opportunities in the future. Even if deals don't work out, you could still get referrals and expand your network.

Remember, sales negotiations aren’t an arena where you can be aggressive and force your prospects into a sale. You need to be composed, act as an advisor, and be empathetic.

Doing so allows you to turn “negotiations” into “consultations.” Instead of selling products, you focus on providing the best solution. But to get here, we need to understand the fundamentals.

Fundamental Sales Negotiation Skills You Need to Learn

sales negotiation strategy

Sales negotiation is both a skill and an art. Salespeople can consistently improve their skills, build relationships, and generate more revenue. Here are the fundamentals you need to learn:

Learning How to Handle Objections

Objections during the early stages of the purchasing journey are common. But, in the later stages, things can go perfectly, then suddenly, prospects might have objections.

This can catch us off-guard and leave us frustrated. That’s why we need to learn how to handle objections. Try active listening and understand the reason for the objection.

At this point, let your prospects talk. Absorb everything, then respond. Sometimes, people just want to be heard. Validate their objections and find the right compromise.

But if you can’t turn that no into a yes, you need to learn when to walk away.

When to Walk Away

You have to know when to cut your losses after trying your best. So, how can you identify if a deal can’t be saved? Here’s a quick checklist:

  • Is your prospect making unreasonable demands?
  • They show no signs of compromising on a deal.
  • Their needs can’t be met despite all the alternatives you’ve laid out.

Learning when to walk away lets your sales representatives focus on dollar-productive prospects. In some cases, walking away can sway prospects into taking the deal.

There will be several more opportunities to find the right customers or clients. Be sure to implement communication strategies so negotiations can stay consistent across all deals.

Active Listening

Being an active listener and letting your prospects speak their mind can sometimes get you everything you need to close the deal.

For example, one of the most common objections is the cost of our products or services. There could be dozens of underlying reasons why they have this objection.

Stop speculating and understand what these underlying reasons are. Address them and find ways to alleviate their concerns.

Even if the deal doesn’t push through, at the very least, you showed empathy and willingness to listen. It’s something that can be appreciated universally.

Keeping Emotions in Check

Negotiations can spiral into an argument in an instant if we let our emotions get the best of us. It’s a lose-lose situation. You don’t land the deal and lose the opportunity to create a wider network.

So, before stepping into a call or a meeting, set aside whatever you’re feeling personally and focus on addressing your prospect’s concerns. Likewise, you must keep calm regardless of whether the prospect is irate or difficult to deal with.

Looking for Alternatives

If your initial negotiations aren’t going according to plan, there are still layers of opportunities to convert a prospect—you just need to find them.

For example, if prospects object due to costs, offer an alternative solution through smaller commitments. You could tailor the package only to include what they need or adjust payment terms.

Finding alternatives helps you provide value to your prospects in the short term that could easily convert into a sale. More importantly, it establishes solid relationships that help you long-term, especially if a prospect is just starting to scale.

Sales Negotiation Strategies

sales strategies

Negotiations are rooted in sales psychology. It's an integral part of any sales process that shouldn’t be overlooked. Here are seven strategies to help you consistently land more deals:

Emphasizing Losses Over Gains

Highlighting losses instead of gains seem counter-intuitive. However, according to research from professors at Harvard Business School, people are more motivated to avoid losses rather than achieve gains.

Instead of saying, “Our product can save you 20% by automating {{X task}}.” You can say, “Based on your current set-up, our analysts project you’re losing {{X amount of money}} per month. We can help reduce those costs by 20%.

Losses outweigh gains. Framing our negotiations to avoid losses rather than to gain or save on costs have more of an impact when it comes to swaying the minds of our prospects.

Split Losses, Combine Gains

Leaning again into losses, studies suggest that people would rather gain money in installments and lose money at once.

Let’s say the end result is getting $50. Option one is getting the $50 outright. The second option is getting $100, but you’d have to give $50 back.

The $50 in the scenario works the same way. But, most would likely choose to receive $50 outright. That’s because individuals favor gaining more cash upfront than suffering losses.

So, when negotiating a price concession, you can divide your costs into smaller concessions. Meanwhile, when you’re asking for a concession, make one demand.

Don’t Over-Justify Your Product

After presenting your unique selling point and the value your products bring your prospects, you can let your initial offer stand. From this point, you don’t need to over-justify the pricing when met with objections.

Studies show that significant requests with weak justification tend to result in backlash. Prospects could object to more aspects of the deal rather than working on a compromise.

Instead of overjustifying, try offering alternatives such as reducing features, tailored payment plans, or offering smaller commitments. Doing so lets your salespeople avoid weak justification and focus on your defined concessions.

Define Specific Concessions

You can’t give up too much of your negotiating power. Before starting negotiations, ensure your team has clearly defined specific concessions.

Set a limit on what you can and can’t accept. Define discounts, freebies offered, features to include, and other aspects you can add to a deal.

Remember, negotiations have to be mutually beneficial. Don’t concede too much just to land a deal. Commit to your boundaries, be ready to handle objections, and offer alternatives.

Identify Key Decision Makers

Negotiating is easier when talking to the person with the ultimate buying power. Let’s say you’ve been nurturing a prospect for weeks, exchanging emails, and going through product demos.

Then, when it's finally time to negotiate, the prospect hits you with, “This sounds great, let me run this through my boss, and I’ll get back to you.

Was this time all for nothing? You can’t ever know. Different stakeholders have unique metrics for buying new products.

Add a solid lead qualification system in your sales process to ensure you're talking to the right decision-makers.

When Giving Discounts, Avoid Ranges

During negotiations, especially when discussing pricing or costs, don’t offer prospects a range. Avoid saying, “We can give you a 15-20% discount on this deal.”

Think about it, when a 20% discount was already on the table, why would you settle for 15%? So, when offering discounts, always quote a specific number, never a range.

Then, you can work around that number and go higher or lower depending on how the negotiations go. Giving a range gives your prospects too much negotiating power.

Wait For Verbal Agreement, Then Draft Contracts

Negotiations take time. So, before drafting any contract, ensure both parties verbally agree to the terms. This gives a lot of space for open communications and hashing out objections. You can draft legally binding documents once you’ve landed on a comprise.

Key Takeaways

Sales negotiation is a skill that can be learned, developed, and mastered. Make sure your salespeople are prepared to negotiate by following these best practices:

  • Learn how to handle objects and when to walk away from a bad deal.
  • Avoid over-justifying your product and let the prospect openly speak first.
  • Know your product or service well enough to offer the best alternatives on the spot.
  • Try emphasizing losses over gains to play into your prospect’s psychology.
  • Always define concessions to know which deals you can or can’t accept.

The best way to support your sales negotiation efforts and follow-ups is through email. On this note, Instantly has you covered! Sign-up for a free trial today!

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