(How can you use negotiation to prevent customer cancellations aka Salvaging the Sale)

Sales is a challenging profession. Closing a deal takes time, effort, resources, and skill. Sales professionals know that hearing “no” is part of the job. You will get rejected a lot more than you will succeed.

Many deals get to a point where you need to start thinking about moving on. Should you continue to drive forward with a customer, or should you cut bait and move on to another prospect?

Many sales reps give up too early on a deal. Just because things become challenging doesn’t mean you can’t come to a mutually beneficial agreement with a client. Rather than give up, it’s important to make an attempt to salvage the sale. Don’t let your time and effort go to waste.

Part 1. 

What is negotiation?

What are negotiation skills?

Before a negotiation: 5 tips to help you prepare

During a negotiation: 5 skills to close the deal

Exercises:  Negotiating with Different Buyer Personas

RC32825

Part 2. BATNA

Top Reasons for Order Cancellation/Refund and Effective Solutions

Common Negotiating Mistakes (Video)

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Negotiation is crucial when you are in sales. Being able to go back and forth with customers to try and strike a deal is a huge part of our job. A few things we gotta keep in mind - listen to what the other person is after and make sure we understand their needs. Then find that middle ground where the customers and us can win. win-win situation. 

1. What is negotiation?

Negotiation is a type of discussion that helps two or more parties reach an agreement. During a negotiation, people work to find an acceptable solution that meets their needs. This often involves some sort of compromise or “give and take,” in which each person makes concessions for the benefit of everyone involved. 

Negotiation concessions are all about making compromises or offering something valuable to the other side to help close a deal. It’s a key part of the process- basically, being willing to give a little to get something in return.

2. What are negotiation skills?

Negotiation skills are the abilities and techniques that help you achieve a beneficial outcome during a negotiation. They’re typically soft skills—in other words, interpersonal skills that help you interact with others. That’s because negotiating is all about empathy and communication. 

During effective negotiations, we need to: 

Persuade.

Understand the needs of the other person.

Build rapport.

Clearly express what you want to happen. 

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Negotiation skills can be divided into two main groups: techniques to prepare for a negotiation, and the skills you use during the negotiation itself. 

We cover each type below.

3. Before a negotiation: 5 tips to help you prepare

Negotiations can be intimidating, especially if you’re not sure what to expect. But while you can’t predict exactly how the other person will react, you can plan your own approach and ensure you have the information you need for a successful negotiation. In other words, we need to be READY. 

Here’s how to prepare: 

1. Set your negotiation goals

Concrete goals help guide your negotiation—so you know what you want to happen and when you should walk away from the table. To set goals for  negotiation, we ask yourself the following questions: 

What’s the best possible outcome? Aiming high during a negotiation improves your chances of getting what you want. Think of the best outcome you can reasonably expect. For example, aim for the most profitable scenario. 

For example, advise the customer to pay for the difference between the shipping cost applied upon check out and the shipping cost that they have to pay. 

What’s the worst outcome I’m willing to accept? 

Most negotiations involve a bit of give and take, so keep in mind that your best-case scenario probably won’t happen. That said, it’s important to identify your bottom line so you know when to walk away from the bargaining table. 

For example, write down the most you’d be willing to cover for additional shipping costs. 

WHAT HAPPENS THEN IF WE CANNOT AGREE?    

Your BATNA is essentially your plan B, the alternative you have in mind if negotiations fall through. It is the option you can turn to if the current negotiation does not result in a satisfactory agreement. Your BATNA should be realistic and viable, providing a suitable alternative that meets your needs and interests.

Example:   An order was canceled because of unavailability (OOS). 

You are now offering a similar product as an alternative.  If the negotiations hit a roadblock, you find out that a competitor is offering a similar set for $700 with a FASTER delivery time. In this scenario, your Best Alternative to a Negotiated Agreement (BATNA) as a salesperson would be to suggest the alternative supplier's offer to the customer, and you shouldn't finalize the sale for less than $700 to ensure a competitive and beneficial outcome for both the customer and your business. 

(In context, you'd rather get the sale (by giving away max discount) than have the customer purchase from the competition as long as it remains profitable) Discount away if you have to - just make sure you're still making some green while doing it!

To enhance customer satisfaction, consider offering incentives and alternatives. Provide discounts, exclusive offers, or loyalty rewards to show appreciation for their business. Additionally, offer alternatives or substitutes when addressing concerns, showcasing flexibility and a commitment to meeting their needs. By presenting enticing incentives and practical alternatives, you not only resolve issues but also strengthen customer loyalty and trust. This approach demonstrates a customer-centric focus, turning challenges into opportunities to create positive experiences and long-term relationships.

2. Know your angle

Your angle is your negotiation strategy. It’s the doorway you’ll enter the negotiation through and the key points you’ll use to convince the other party to make a deal. Picking an angle beforehand helps you prepare what to say—so you can negotiate intentionally rather than just reacting to the other party’s approach.

Your angle is basically your game plan. Deciding your angle ahead of time helps you figure out what you need to say so you can lead the negotiation instead of just responding to what the other person throws at you. You want to be deliberate (planned, studied) about moving things in your direction, not just reacting to them. So take a minute to choose your angle before jumping into negotiations - it'll serve you well.

3. Workshop your negotiation style

Your negotiation style is the way you speak and act during a negotiation. Identifying your style helps you understand how others might view your behavior. Then, you can use that perspective to improve your performance. 

To identify your negotiation style, think of how you’ve behaved during past negotiations. Are you usually afraid to ask for what you want, or do you tend to push too hard? Do you only consider the benefits of a situation, or do you focus too much on potential pitfalls? The most important thing here is to be real with yourself. Nobody is a perfect negotiator, and understanding your personal roadblocks help you make a plan to improve your communication skills. For example, you could work on your assertiveness if you tend to be timid, or practice active listening if you tend to push too hard. If you often find yourself distant or indifferent, it's a good idea to practice using empathy words.

4. Google them

Here are some questions to consider: 

To your knowledge, what limitations is your customer facing? What are the possible outcomes they could achieve or risk losing in this negotiation?

If you’ve worked with this client before, how have negotiations gone with them in the past? 

What kind of relationship do you want with them in the future? 

Who holds the most power in this negotiation, and how might that affect the negotiation process?

What outcome would they perceive as most beneficial, and why?

IV: During a negotiation: 5 skills to close the deal

You’ve done the prep work—now it’s time to buckle down and close the sale. These are the skills and tactics to flex once you actually hop on a call or sit down at the negotiating table. 

1. Encourage mutual respect

In negotiations, it pays to treat people well. Showing respect helps build trust, develop rapport, and signal to the other party that you care about their point of view. When you’re respectful, it encourages the other party to do the same—making them more likely to listen to your proposals.

Here are some ways to bring respect to the bargaining table: 

Practice active listening in order to understand the other person’s point of view. (jot down notes on the PL sheet - customer’s timeline, concerns about budget, ETA, specific feature of the product they need, etc) 

Pay attention to your nonverbal communication—for example, make verbal nods or “hmms, yeas” to show you’re listening. 

Use your emotional intelligence to understand and empathise with the customer. 

Build rapport by introducing yourself and asking how the other person is doing. 

Separate the person from the problem. Remember that outside this negotiation, they’re just a normal human being with their own struggles and experiences. 

When talking to customers, it's important to encourage mutual respect. Here are some things you can say:

- “We're all here to find the best solution. Let's work together on that.”

- “I want to make sure I understand your needs fully. How about you share more about what you're looking for?”

- “This is an important decision. Please let me know if anything I say is unclear or if you have additional questions.”

- “We may not agree on everything. As long as we listen to each other with open minds, I'm sure we can find common ground.”

- “Thank you for your business. Treating customers with respect and caring about their experience is important to me and this company.”

The goal is finding a win-win. Keep the conversation polite and focused on the customer's needs. With an attitude of cooperation, I'm sure we can get there.

2. Ask questions

Questions help in three big ways: 

They help you understand the other person’s wants/needs.

They show that you won’t settle for a less-than-effective solution.

They draw out why the other party wants to make a deal. 

This last benefit is a tricky but important one. Posed the right way, questions can remind the other party why they want to work with you and incentivise them to make a deal. 

Here are some good questions to ask customers to help with sales negotiations:

- “What are your main goals or priorities for this purchase?” 

Understanding what's most important to them can help you focus on those areas.

- “What options have you considered so far?” 

Knowing their other options shows you understand their process so far and helps you address any concerns they may have had with those options.  

- “What is your timeline for making a decision?” 

A timeline helps you understand any pressure points or deadlines they may be working with.

- “How will you be measuring success for this purchase?” Knowing how they define success, whether it's cost, features, or something else helps you showcase how your proposed solution meets those goals.

- “What questions do you still have for me before moving forward?” 

Leaving room for any lingering concerns or uncertainties ensures you have answered all of their questions before asking for the business.

The key is focusing the discussion on the customer's needs and priorities. Asking thoughtful and meaningful questions demonstrates you are looking out for the customer and not just trying to make a sale.

3. Play the reluctant party

In every negotiation, there tends to be an eager party and a reluctant one. It’s better to be the reluctant party because it gives you more negotiating power. When you’re reluctant, the other person is essentially pitching their proposal to you—meaning they’re more likely to make concessions in order to bring you onboard. 

By playing the role of the reluctant party (even if you’re not actually reluctant), you can prompt the other person to play the role of the eager party. Here’s how to do it: 

Use body language. Eager parties tend to be tense and sit forward in their chairs. Instead, try to stay relaxed and sit back from the table. If you’re on a virtual call, drop your shoulders and lean back against your chair. 

Speak slowly and softly. Eager people tend to speak quickly and loudly. Do the opposite to signal that you’re not raring to make a deal. 

Qualify your language. This demonstrates that you’re not 100% committed. For example, say “If we could do X” instead of “When we do X.” Ex. “ If we could drop this product off at the closest warehouse, it means you won't have to pay those extra shipping costs. What do you think about that? We could save you some money by getting it right to the depot near you.”

Be assertive. Assertiveness shows that you won’t settle for a solution that doesn’t meet your needs. You don’t need to speak loudly or aggressively to be assertive—you just need to stand up for your perspective in a calm and confident way. 

If you're able, pause the conversation to show that you’re not in a hurry. This can boost the other party’s sense of urgency and trigger them to make concessions they wouldn't otherwise make.

4. Stick to the facts

Assumptions can complicate even the most simple negotiation. To keep things simple, stick to the facts. Try not to assume anything about the other person’s motivations, what they might be thinking or feeling about the situation, or potential future scenarios that aren’t backed up by data. Assumptions are a normal part of being human, but a bit of self awareness can help you stay grounded and simplify the negotiation process. 

Focus on what the customer is telling you. Try repeating their words back to them during the discussion. You can say - 

“Earlier you mentioned that...”

“2 weeks ago, I remember you telling me that..”

"A couple of weeks ago, I seem to remember you mentioning something about..."

Repeating what they've told you shows that you're actively listening and helps keep everyone on the same page. It'll also help move the conversation forward in a positive way.

5. Explore options together

Finally, remember that effective negotiations are about collaboration. Your goal isn’t to get everything you want and give the other person nothing—instead, you want to work together to find the best solution for everyone. In that spirit, here are some problem-solving techniques to help you explore options during the “give and take” process of negotiation: 

“Expand the pie”—extend what you’re offering to accommodate the other party. 

Suggest alternative solutions that might be a win-win for everyone.

Trade favours—agree to honor specific priorities from the other party. 

Offer compensation to recognise where sacrifices have been made. 

Find common ground—identify values you share with the other party. 

Here are a few ways you could say to a customer that you want to explore options together during negotiations:

“I believe we can both benefit if we team up to come up with creative ideas. How about we talk openly about other options?”

“Let's work together and come up with some creative ideas. Maybe we'll find a solution that works for both of us.”

“I want to make sure that everyone feels listened to and happy. Would you be willing to have a conversation with me so we can carefully examine this from different perspectives? I am interested in hearing your thoughts..”

Additional tip:  

Rules vs Principles - When it comes to negotiating deals or coming to agreements with other people, we found that there's a difference between following rules and operating from principles. 

Rules are rigid, linear - they tell you exactly what you can and can't do. But principles are more flexible, they guide your decisions without being hard and fast laws. When we rely on rules too much in negotiations, it can make things adversarial and cause tension. But focusing on principles boosts creativity -  like mutual understanding, fairness, and compromise tends to lead to much better outcomes.

Although both things determine the way you act and take decisions, rules are imposed from the outside and must be obeyed to avoid incurring some kind of penalty (a punishment, a fine, a layoff, a season in jail, etc.) whereas principles are internal, and force you to do what you think it is right or correct.

Do people respond better when they feel heard and respected?

Definitely. Coming from a place of principles over rules helps with that. It's about finding solutions where both sides feel they've gotten a fair deal, not about strictly enforcing procedures or demands. 

Exercises: Buyer Personas

Understanding and being able to negotiate with various buyer personas is crucial in sales negotiation. Every buyer persona has unique needs, desires, and challenges, so it's essential for us, sales experts, to recognise these aspects and adjust our negotiation approach accordingly. Moreover, knowing the different buyer personas can enhance customer relationships, resulting in higher sales and customer retention.

1. Ben, a business owner, recently purchased a ramp which is unfortunately too short for his needs.  He wishes to return the ramp he bought. 

2. Susie and Adam, an old couple who needs a pet ramp for their pet. They recently purchased from the website and eventually found out that their dog is too scared to use it. They are wanting to return the ramp they bought. 

3. We have here Karen, wife of Ken who just purchased a set of ramps. She does not know the specifications he needs but she called requesting to refund what Ken paid. 

4. Craig, a builder, asked us to quote him for a set of custom ramps.  Upon receiving them, he found out that the ramps were fabricated incorrectly. 

5. Georgia, a company secretary, ordered 2 sets of UBD200SM-G and UBD100SM-G. Of these is out of stock with a later ETA. She is offered an alternative but is not willing to pay more for the price difference. 

6. A company owner, Brett, ordered Heeve 2.3m Aluminium Curved Folding 3-Piece Loading Ramp. There was an inventory error and so the order cannot be fulfilled. 

7. We’ve got here Troy, business is unknown, who ordered Whipps 1.5 Tonne 2.0m x 300mm Aluminium Machinery Loading Ramps. He just found out that the ETA of these ramps is 5 to 6 weeks. He wants to cancel the order as he needs this as soon as possible.

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V. Top Reasons for Order Cancellation/Refund and Effective Solutions

1. Out of Stock

When the warehouse says you're out of stock during a sale, don't panic. It happens to all of us. Stay calm and focus on solutions, not problems. Here are some things you can try:

- Apologise for the inconvenience and thank them for understanding. People appreciate polite acknowledgment. 

- See if you have the item in another location or warehouse that can be shipped. Customers will like the flexibility.

- Suggest an alternative product of similar quality. Highlight the benefits to solve their problem. "This other item is very comparable and may work even better for your needs."

- Offer to pre-order the item for them or place them on a waitlist for the next shipment. Give them a call as soon as it's back in. Follow up!

- If it's a big ticket item, see if a deposit will hold it for them once it's back in stock. Make them feel secure in their purchase. 

- Thank them for their time and interest. Ask if there's anything else you can help with in the future. Leave the door open for when the item returns.

*Internally, we would want to avoid this incident from happening again. Since all sales agents are aware how to manage stock on Shopify, we should immediately mark the item out of stock and add it on the OOS or BIS list so we can ask for an ETA from the supplier.   

2. Suitability issues 

First off, listen to understand the customer's concern. Make sure you get all the details on why they don't think your product or service is a good fit. Ask follow up questions too if needed.

Once you have the full picture, address their specific issues directly. Explain how your solution actually does meet their needs in a way they may not have realised. Provide examples from other similar clients too if it helps make your case. 

If you come across any inconsistencies on the website that are causing confusion after gathering sufficient information from the customer, make sure to email the Content team right away to address and resolve the issues. 

Sometimes, all it takes is a different perspective to change someone's mind. Instead of focusing on why something won't work, try highlighting the benefits they actually want. By shifting their view and focusing on the possibilities, you might just help them see things in a new light.

And don't be afraid to offer a compromise if part of their concern is valid. See if you can adapt your solution a bit while still delivering what they truly require. Meeting them halfway can get things back on track.

3. Dealing with sales objections around ETA or estimated time of arrival 

It's all about managing expectations and communicating clearly. First, listen fully to understand the customer's concern or deadline. Then acknowledge their issue and take responsibility to resolve it. You can say something like "I appreciate you bringing this to me, let me see what we can do to help meet that timeline." From there, give a realistic ETA if you can while also providing updates and alternatives if needed. 

Being transparent about any challenges helps build trust. You can also ask questions to clarify needs and find the best solution together. The key is avoiding excuses and focusing on solutions. With patience and teamwork, you'll get through ETA objections and keep the customer happy.

4. Lack of decision making ability of the person negotiating

Being unable to make decisions can hurt you in sales negotiations. Things move so fast online these days. If we don't have what it takes to seal the deal, you're going to miss out on a lot of opportunities. Our numbers will drop and customers may start looking elsewhere. To stay ahead in this game, we have to be learning all the time. What worked last year might not cut it now. We need to be tuning into what customers want and adapting our style. We have to keep sharpening those negotiation skills too if we want to thrive out here. It's tough out there in e-commerce - we don't adapt, we don't make it.

• Do your research. Make sure you know all the ins and outs of the product you're offering. Know your numbers like the back of your hand so you can confidently respond to any question or objection that comes your way. Being prepared will help you think on your feet.

• Listen actively. Don't just wait for your turn to talk - truly listen to what the other side is saying. Pay attention to their needs and priorities. The better you understand their perspective, the easier it will be to find common ground and compromise. 

• Weigh your options. When faced with a big decision, take a step back. Consider all the potential pros and cons of different choices before committing. Having a few alternatives in mind will prevent you from settling too quickly for something that's not ideal.

• Trust your gut. At the end of the day, use your experience and instincts. If something feels off about a deal, there's usually a good reason why. Listen to that little voice in your head - it'll save you from making the wrong call.

• Learn and apply from your past experiences. 

Common Mistakes when Negotiating - 14 Common Negotiation Mistakes (youtube.com)

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BATNA (Best Alternative To a Negotiated Agreement)

Significance of BATNA

A BATNA is important because it helps you set your reservation point, which is the lowest acceptable offer you are willing to accept. Without a BATNA, you might be tempted to accept a bad deal or make unnecessary concessions out of fear of losing the opportunity. A BATNA also helps you assess the value of the offer and compare it with your alternatives. If the offer is better than your BATNA, you have a positive bargaining zone and you can negotiate further. If the offer is worse than your BATNA, you have a negative bargaining zone and you can walk away.

How to Identify BATNA

To identify your BATNA, you need to do some research and analysis before the negotiation. You need to identify all the possible alternatives that are available to you, and evaluate them based on their feasibility, desirability, and probability. You can use criteria such as cost, time, quality, risk, and reputation to rank your alternatives. You also need to consider the consequences of each alternative, both positive and negative. The best alternative among your list is your BATNA.

How to improve BATNA

Your BATNA is not fixed or static. You can improve it by generating more alternatives, increasing their attractiveness, or reducing their drawbacks. For example, you can seek for additional quotes from suppliers, create new offers, new package, you can also enhance the value of your product or service, or highlight its unique features or benefits to make it more appealing. You can consider exploring the availability of the next day shipping and delivery option, a special discount on their order perhaps, or offering payment terms. 

When to use your BATNA

While it's essential to be transparent about your BATNA, it's equally important to communicate it strategically. Revealing your alternative options too early in the negotiation process may weaken your position. Share your BATNA when you believe it will have the greatest impact and influence on the other party.

BATNA Common Mistakes 

Using a BATNA strategy can help you achieve better outcomes in your sales negotiations, but you also need to avoid some common pitfalls. One mistake is to overestimate or underestimate your BATNA, which can lead to unrealistic expectations or missed opportunities. Another mistake is to ignore or dismiss the other party's BATNA, which can lead to impasse or conflict. A third mistake is to rely too much on your BATNA and neglect the relationship or the value creation potential of the negotiation. A good negotiator knows how to balance their BATNA with their interests, goals, and preferences.

Application: 

At the end of this discussion, everyone in the team is encouraged to complete the details below when negotiating to save a sale:  

1. Opening Offer:  

2. BATNA: 

3. Lowest Acceptable Offer: 

Example: 

1. Opening Offer:  Ask the customer to pay for the whole amount due/Depot Collect/Priority Delivery or fabrication/extended warranty/etc; 

2. BATNA: Covering 20% of the cost + depot collect; 

3. Lowest Acceptable Offer: Covering 20% of the amount due + Special discount on next order. 

Here are some great examples that are related to this training. Make sure to take your time to listen and read through them.

Sample tickets  - FD 321721, 328390

Sample call - Offering an alternative - OOS.mp3 Asking customer to pay for additional shipping fee- RC33088.mp3