Sunday, 3 November 2013

What is the Difference between Selling and Negotiating?

There are two essential skills that you have to master if you want to prosper as a sales professional.  These are the skills of selling and negotiating.  They are inextricably linked together in the sales process and although the boundaries between them are blurred, they are two distinct stages and subtly different skill sets.

Selling is all about convincing customers to purchase a product or service, or to enter into some form of arrangement or agreement with you.  Selling can be defined as establishing a need or want to buy (and people tend to buy what they want rather than what they need), and then matching the benefits of your product or service to that need or want.  These benefits and how they help the customer to get what they want are articulated in your sales proposal or value proposition.

Negotiation is about agreeing the terms upon which the purchase, arrangement or agreement will take place.  This may include many factors such as volume purchased, delivery schedule and method, purchase frequency, amount of payment, timing of payments, service levels, product or service configuration and so forth.

To maximise your profit margin the golden rule is: sell first, negotiate second.

 The reason for this sequence is that the more convinced the customer is of the benefits of your product and service the more they are likely to be prepared to pay for it.  Selling is about communicating the value of what you have to offer.  The more value a customer perceives a product or service to give them, the higher the price they will be prepared to pay for it.

On some occasions selling alone may be enough.  You may be able to convince the customer to purchase your product or services without any negotiation taking place.   However, in the majority of modern selling situations, you will be drawn into negotiation.

If you allow yourself to be drawn into negotiation too early (and experienced buyers will attempt to do exactly this,) you are weakening your negotiating power and missing out on the opportunity to convince the customer of the benefits (and therefore the value) that your product or service will bring them.  To prevent this happening it is important to focus on three distinct stages in the sales process – these are in sequence: planning and preparing, selling, and then negotiating.

In the course of my work as a speaker, consultant and corporate trainer the situation with the majority of sales people is as illustrated below.   

A small amount of planning is conducted (in my experience far too many sales people do not plan and prepare well enough for customer meetings) and as a result of this the depth and quality of their selling is limited.  They will then frequently find themselves dragged far too quickly into the negotiation stage (which lessens their ability to communicate value) by the customer, who is deliberately trying to tip the balance of power in the negotiation in their favour.

The ideal scenario is as illustrated in the next diagram:

The sales person plans and prepares for both the selling and negotiating stages thoroughly.  They, then enter the selling stage, spending sufficient time to understand the customer’s needs and wants and then articulating a powerful value proposition. They then make the transition into the negotiating stage, maximising profit margins by conducting an effective negotiation that is built on a firm foundation of planning, preparing and good quality selling.
If the foundation of planning and preparation is weak, the selling stage will usually be too shallow and short and will lead to the power balance in the negotiation being tipped in the favour of the customer.  The customer will then exploit their advantage and the sales person’s profit margins inevitably suffer as a consequence.

If you take the time to build a solid foundation of planning and preparation for your customer meetings then your ability to sell will improve, which will in turn lead to you feeling stronger and more confident in the negotiation stage.  The more confident you are feeling, the better your profit margin is likely to be.  And the foundation of confidence in both selling and negotiating is planning and preparation.

Simon Hazeldine MSc FinstSMM is an international speaker and consultant in the areas of sales, negotiation, performance leadership and applied neuroscience. 

He is the bestselling author of five business books:
  • Neuro-Sell: How Neuroscience Can Power Your Sales Success
  • Bare Knuckle Selling
  • Bare Knuckle Negotiating
  • Bare Knuckle Customer Service
  • The Inner Winner
To learn more about Simon's keynote speeches and other services please visit:

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