Facing Sales Pitches
So if you own or run any type of business, even if you are a department manager, you are constantly being pitched sales ideas from all kinds of companies. They may be trying to sell you marketing, services, inventory, or products. The process of dealing with salespeople has three parts: deciding whether or not you actually want to buy that item, negotiating the price of the item, and agreeing on whatever the terms are. Sometimes, it’s important to recognize that the salesperson has a little bit of an advantage over you. They do this all the time—they negotiate and sell this product every single day, day in and day out. Even if your role in your company has to do with sales, you’re not selling that specific item.
Leveling the Playing Field
Today, we’re going to talk about how to negotiate and close a sales deal as a buyer to your advantage. This will help you be on the same level playing field—or maybe even a little bit better—than the selling agent trying to close you into a product or service. We’re going to talk about pricing, how to make decisions, how to say yes, and how to say no. Even when you want to buy something, learning how to say no can work to your benefit.
Handling Qualifying Questions
The first thing to recognize is that you’re going to hear a lot of qualifying questions from that salesperson. Questions like: How soon are you looking to buy? What’s your budget? Are there any other decision-makers involved? Do other people need to be part of this? You’ve likely heard these over and over. They can be annoying, but there’s a reason they’re asking. Sometimes, though, it’s counterproductive for them to ask those questions because it doesn’t help their cause. We’ll show you how to turn those questions around to your advantage to negotiate and gain leverage.
Taking Your Time
The first thing you want to do is take your time. This might sound obvious, but it’s crucial. Don’t rush into anything. Salespeople often use high-pressure tactics, trying to make you feel guilty or wasting their time if you don’t buy immediately. If they pressure you, one response is to ask, “Don’t you want me to make an informed decision?” If they push back when you ask for more information, such as an email or brochure, you can use the same approach: “Don’t you care about me making an informed decision?”
Responding to Sales Tactics
When faced with questions like, “How soon do you want to buy this service or product?” avoid giving specific answers. Instead, say, “We have nothing we need to wait for, but we also have no deadlines. If this is something that’s good and will help our business, we want to do it right away.” This ties their need to sell quickly with your need to see how the product will actually help you. Make it clear that your timeline depends on the product’s benefits, not arbitrary deadlines.
Avoiding Deadlines
Never let them think you have a strict deadline. If you say you must close a deal within a week, they might delay providing information until the last minute to pressure you. By saying, “We have nothing we need to wait for, but we also have no deadline,” you keep control and focus the conversation on how the product benefits your business.
Ignoring Ego-Driven Sales Pitches
Many salespeople start their pitch by bragging about their company’s achievements: awards, big clients, years in business. But ask yourself: How does this help you? None of these things directly demonstrate how their product or service will benefit your company. If they’ve been in business for 20 years, does that make them better than a company that started last year with innovative ideas? Focus the conversation on how they will help your business, not their own reputation.
Dealing With Budget Questions
When they ask, “What’s your budget?” be cautious. They’re trying to qualify you and determine if you can afford their product. This can be a trick question because the price is what it is. If you share your budget, it won’t change the price. You can respond with, “If I tell you my budget, will it affect the price? No? Then why does it matter?” Another response could be, “Here’s how we look at budget: Everything we spend money on as a business must contribute to Purpose of making more money with our business. Does that make sense? Yep, good. So if we spend money, it’s for the purpose of making more money with that thing. So it’s not really an expense. It’s not like, you know, going and buying a pair of jeans as a personal expense that you’re just going to throw money away on. We’re investing our money.
Profit Margins in Business
Most businesses have a profit margin of about 20%. Meaning, if a business at the end of the month makes a million dollars in sales revenue, they keep $200,000 after they pay payroll, rent, utilities, insurance, cost of sales, cost of goods—all their expenses. At the end of the month, they keep about 20%. Make sense?
Return on Investment Calculation
If we spend $100 on something as an investment to sell more stuff, and we sell $500 more in sales, we break even, right? Because 20% of $500 is $100. So in order to have this item make sense for us, we have to sell probably 7, 8, or 9 times what it costs us. So if we buy something from you for $100, we have to see that it’s going to make us $800 or $900 in new sales—not existing sales, but new sales. Does that make sense?
Budget Decision and ROI Expectation
The way we decide our budget is we look for an 8 or 9x return on our money. So if what you’re selling costs $1,000, we want to see if we can make an extra $8,000 or $9,000 in sales from this. I know there’s no guarantees—it’s a speculative thing—but we have to see that most likely, that’s going to happen.
Sales Pitch Guidance
What you can do as a salesperson is help show me how it’s likely I’m going to make $8,000 or $9,000 in sales on this thing you’re selling me for $1,000. There’s your painting the picture. We’re giving you a roadmap of how to sell us.
Making Decisions on Purchases
If someone is selling you something for $1,000, and you can’t see where it makes you $9,000 in more sales, that’s your cue to decide. Even if it seems like a nice thing to have, if it’s not making you money, then don’t do it.
Factoring Risks and Failures in Business Investments
Some things you spend money on won’t make any money. You won’t know in advance which things work and which don’t. Maybe 10%, 20%, or 30% of the things you try won’t work. So, factor that in when making calculations and decisions.
Handling Sales Objections
If you tell your salesperson that something doesn’t show an 8 or 9x return, the objection is now on them to fix, not on you to argue with. This avoids situations where you have to defend why you’re not buying.
Qualifying the Decision-Maker
The third qualifying question is: Is there anybody else in the decision-making process for you to decide to buy this thing? You can ask them if they have authority to execute the deal without checking in with someone else.
Avoiding Back-and-Forth in Negotiations
In business transactions, avoid the back-and-forth where salespeople have to check with others. Ask if they are the decision-maker or just a lead qualifier. If they aren’t, request to speak directly to the decision-maker.
Being Wary of Sales Tactics
Always turn what they’re saying to your advantage. Don’t let psychological tactics distract you from making informed decisions. Stay focused on the facts of the product or service.
Evaluating the Sales Process
Salespeople will pitch their background, their other customers, and their product’s benefits. Ignore unnecessary details and focus on what matters. Ask them directly: “Is there anything else I need to know to make an informed decision?”
Responding to Timing and Pressure
But they also now don’t have a reasonable way of countering that by saying, “What? Come on, buy it right now.” They might say, “What questions do you have?” Well, I don’t know. I may have some that come up after I consider it. And if they start getting into timing and pressure of making a decision right then, take whatever the dollar amount of that transaction is. If it’s a $1,000 thing, a $50,000 thing, or a $100,000 thing, I would ask them, “Do you think it’s a good idea to make a $5,000 decision in 22 minutes?” Would you advise that? Would you advise one of your relatives to make a decision on $20,000, $30,000, or $40,000 with a 22-minute decision-making process?
Turning the Conversation Around
Again, you’re turning it around on them. Obviously, they can’t say, “Yes, I would,” because that’s irresponsible, misleading, and hypocritical. If they say, “Yeah, you’re right, you should think about it,” say, “Look, I’m serious about doing this. Obviously, I wouldn’t have contacted you. I want to spend money.” The other thing, going back to the budget item, if the person asks you, “What’s your budget?” another thing you can do that will really flip them out is take some very large number. Let’s say you’re talking to a company about marketing and advertising. Let’s say it’s a TV station that you want to do commercials on, and you expect that they might hit you up for $15,000 or $20,000 in advertising. Tell them, “We are looking to spend a million dollars on new advertising this year. We’re trying to find ways to spend money. Obviously, the money has to fit into our rule of eight or 9x, right, but we’re looking to spend a million dollars.”
Evaluating Returns on Investment
Is that true? Well, if I told you or asked you, if you could make an eight-times return on your money spending a million dollars, could you probably come up with a million dollars to spend? If you could be guaranteed to get eight times a million dollars back, probably would. So, in reality, you would spend a million dollars if you could guarantee to get eight times your money back. Anybody would, right? But that’s the thing about making a decision—it’s the guarantee, and nobody’s going to really have a guarantee. So that’s your out.
