Do your sales reps make unnecessary price concessions?
/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:
| Sales | 100 |
| 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.
ZEHREN♦FRIEDMAN offers a full range of negotiation skills courses to help you negotiate better.
Read more here: http://zehrenfriedman.com/skills-training/negotiate
