Study Examines Factors That Impact Negotiations

Developed to better understand the changing nature of negotiations between buyers and sellers, sales training and performance improvement company the RAIN Group has released the results of a global study on sales negotiations. “Top Performance in Sales Negotiation” identifies what top performers in sales negotiation do differently from the rest, negotiation tactics used by both buyers and sellers, what buyers want, the role of price and the impact of negotiation training.

"Negotiation is different than it was even just a decade ago. We wanted to better understand the factors influencing negotiation outcomes, the tactics used by both sellers and buyers, and to learn what works and what doesn’t in negotiations today,” says Mike Schultz, president of RAIN Group and director of the Center for Sales Research. “We studied major factors that affect negotiations such as how prepared a seller is, to what degree the buyer is price-sensitive, seller understanding of power and leverage as well as negotiation tactics. What we found is fascinating.”

Looking at top performers in sales negotiations, the study illustrated performance metrics that put them ahead of their peers. Top performers were found to be 3.1-times more likely than the rest to achieve their pricing target, 12.5-times more likely to be very satisfied with the outcome of the negotiation and 3.5-times more likely to be extremely confident participating in negotiations.

The research, conducted by the RAIN Group’s Center for Sales Research, looked at negotiation success factors and tactics and found that buyers find a wide variety of the negotiation tactics they use with sellers effective from 63 percent to 85 percent, and that the No.1 factor separating most top performers from the rest is understanding the power and leverage held by each side in the negotiation. Only one in five buyers believe sellers deeply understand their ROI case, and just 19 percent of buyers strongly agree that sellers provide ideas in the selling process.

The study also found that, when looking at the role of price, top performers are 1.7-times more likely to find coming in high on price and negotiating down to be a very effective approach compared with coming in at core price and holding firm. In the final agreement, 88 percent of buyers receive a discount and 62 percent agree they have the flexibility to pay more if the supplier demonstrates why doing so is valuable. And when looking at the role of training, the study found that buyers are 1.5-times more likely than sellers to have received extremely effective negotiation training, and that top performers are 9.3-times more likely to receive extremely effective negotiation training than the rest.

"One in five sellers are top performers in negotiation,” adds Schultz. “There’s a lot of room for improvement. To achieve the greatest sales success, your team needs to know which tactics to expect and which strategies are actually going to work. If you’re getting beat up in negotiations, this report will give you the insights to turn it around.”

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