Negotiations can take place in any part of your life – with your spouse, kids, employer, employee, customer, supplier – and the list of stages your negotiation might run through is just as long: Preparation, disagreement, communication, compensation, proposals, decisions, etc.
In working with our procurement team and negotiators, we found that expert negotiators have one major skill in common: the ability of separating the negotiation ‘process’ from the negotiation ‘content’.
- Process (the HOW) – The method or approach you use to conduct the negotiation; “how” you manage it.
- Content (the WHAT) – The facts or substance of the negotiation; “what” you are negotiating about.
Process usually beats content as negotiators become more skilled. They invest more time and effort in planning the negotiation or influencing process they intend to follow. The 80/20 rule can be applied to negotiation, where 80% of a negotiation’s outcome is achieved during preparation.
You are already in command of your particular field of technical skill or expertise – the content. Using this foundation, we can help you build the winning skills of managing the negotiation and influencing process.
In this article, we’re focusing on process and one of the most tricky parts of negotiation: objections. What are objections? How do you handle objections during negotiations? How can you overcome them to move a negotiation forward and find common ground?
What are objections during negotiations?
During a negotiation, an objection is an explicit statement by one party that there is a barrier between 1) the current situation and 2) what needs to be satisfied before moving forward.
Dave Shaby, the COO of sales training company RAIN Group, divides objections into four types. (These are specific to sales objections but can translate to any negotiation between two parties in business.)
- Lack of need
- Lack of urgency
- Lack of trust
- Lack of money
If you are a buyer of a software product and are negotiating with their Sales team, your objections will likely fall into the categories above. The objections of the Sales team could include things like “I can’t give you that discount without a longer commitment,” “I need to check with my boss,” or “We can’t give you those Terms and Conditions.”
What do objections look like in practice?
To understand what objections look like in a real negotiation, we like to simulate the process with a role play. Since this is a written blog and not a live discussion, use your imagination to consider this situation:
- Role A – Delivers objection
- Role B – Overcomes objection
- Role C – Observer
Role A: “We have all spent a lot of time on this project and we really want to move forward…. But we can’t accept your Terms and conditions.”
Role B: “Thank you for sharing that – I don’t understand what’s wrong with the T&C’s!
In attempting to overcome objections to their proposals, negotiators mistakenly try to bluff their way through by making further statements (of opinion), smothering with ‘facts’, telling the Other Party (OP) they are wrong, making threats, or asking leading questions. All these approaches are likely to put the OP on the defensive.
The observer usually witnesses this type of behavior seven times out of 10 during negotiation. The objection handler is focusing too much on the WHAT (the content), which pushes the OP into a corner.
So? What’s a better way to overcome objections without making the other side defensive?
Handling objections vs. negotiations
Some people might think handling objections and negotiations are the same thing, but they are actually different:
- Objections are part of negotiations. They are explicit statements made by one party that there is a barrier between 1) the current situation and 2) what needs to be satisfied before moving forward. Handling those objections is the job of the other party who wants to help the negotiation move forward.
- Negotiations represent the entire process, including objection handling but also planning, clarifying, bargaining, problem solving, implementation, and more.
Objection handling process: How to overcome objections
To overcome an objection, we need to find common ground by building rapport. And to build rapport, we need to ask questions. Rather than using avoidance or attacks, this will open up the OP’s view to reveal the blockage.
Our partners at ENS (“Effective Negotiation Skills”) use the ROHQ framework – Reflective, Open-Ended, and Hypothetical Questions – to illustrate the types of questions you can use to effectively overcome objections.
Reflective Questions (RQ) during negotiations
Before responding to the OP’s blocker with your viewpoint, work to build rapport with them. Ask a Reflective Question (RQ) to show you are listening and seeking to understand.
Start these questions with words such as:
- “So, you feel/think that…?”
- “So, what you’re saying is…?”
- “So, what your offer is to…?”
- “So, you’re prepared to…?”
Try to listen for the OP’s key words and the underlying emotional content of their answer. Then, paraphrase and mirror back the key point using an RQ. However, be careful not to imply any judgment or to parrot the OP in a way that’s offensive.
The goal here is to carefully phrase your question in order to get a positive “yes” response. Seek to move the OP away from areas of disagreement by reflecting your areas of mutual agreement – the common ground – back to them.
Open-Ended Questions (OQ) during negotiations
Next, ask an Open-Ended Question (OQ) to open up communication. Start these questions with words such as:
- “What is your view/opinion…?”
- “How should we proceed…?”
- “Why do you think that…?” (watch your tone here)
- “What other options are there…?”
- “What do you want instead of…?”
- “What would you do if you were me…?”
Here, you should be seeking a genuine expression of the OP’s opinion: their complete viewpoint and underlying feelings. Your aim is to understand their needs.
Be sure to wait before replying and allow the OP to express themselves fully. Resist the urge to respond quickly and cut them off. Instead, use active listening to locate the common ground.
You will probably need to repeat several RQ → OQ cycles of discovery (at least three) to fully open up the OP’s view before you steer the negotiation towards solving.
Hypothetical Questions (HQ) during negotiations
Statements are often considered to be competitive as they represent your views or position and do not evidence an interest in the OP’s needs. If the OP does not agree, they may respond by attacking your statement or defending their viewpoint, creating more conflict.
So, as you move toward suggesting options or making a tentative offer, consider instead using a Hypothetical Question (HQ) or making a hypothetical statement. Asking an HQ avoids these problems as it tentatively tests the water without you committing to anything officially. These questions might start with:
- “How would it be if…?”
- “Suppose that we were to…?”
- “What if we were to (do ‘X’), then would you (do ‘Y’)?”
Alternatively, you can make a statement hypothetically by indicating a third party’s view that might be explored: “I was talking to Kim the other day who suggested… What do you think of that?”
Handling objections in SaaS vendor negotiations
We hope these tips for overcoming objections will be helpful as you enter vendor negotiations in the future.
When it comes to negotiating your SaaS contracts, we know there’s a lot to think about. SaaS tools are important to the day-to-day operations of your business, but also your long-term growth, so the stakes couldn’t be higher.
Sastrify can negotiate the best prices and terms on the market for all your SaaS licenses. Our dedicated team of SaaS procurement experts can take over the negotiations so your team can focus on other core business tasks. Sastrify customers have saved over 20 hours per month and $12 million on SaaS licenses, leading to an average 3x ROI in the first year.
Book a demo to see how our experts can take over your SaaS negotiations, get you the best and put your software procurement on autopilot.