Skilled sales negotiators close more profitable deals and build better, longer lasting customer relationships at the same time. If your salespeople are really good, even modest improvements to the top-line can make a big difference to the bottom-line.
Is Negotiating Worth the Effort?
If your salespeople were really good negotiators, do you think they could close deals, on average, at a 1% higher price? If that seems reasonable, consider the value added straight to your bottom line. Consider a typical example:
|Costs of Goods Sold||60|
|Selling & Administrative Expenses||25|
|Interest, Depreceiation, etc.||3|
|Net Income (Pre-Tax)||12|
Now add a modest 1% to sales revenue as a result of better negotiating, making it $101. If the negotiating is skillful and graceful, the 1% higher price won’t cause a loss of sales. Other expenses remain the same and the extra dollar of revenue falls straight to the bottom line. Now we have $133 of Net Income, and increase of 8.3%! If you can negotiate, on average, a 2% higher price, Net Income soars to 16.6%!
Here’s some good news: Skilled sales negotiators close more profitable deals and build better, longer lasting customer relationships at the same time.