Customer Success | 5 MIN READ

The Art of Negotiation: A Guide for Customer Success Managers

Do the customer success managers know the art of negotiation well enough? Here are five tips that can teach you the art seamlessly. Learn about them now.

Simran Mohanty
Jun 2, 2021

Art-of-Negotiation

Art of Negotiation

Sustaining and retaining customers could be challenging at times – and that is completely fine. At the same time, making a positive impact on your customer relations is practical if you know the art of negotiation. Daniel Pink, in his bestselling book, ‘To Sell is Human’, speaks extensively about how negotiation as an act is only human. With a perfect negotiation, you can unravel through a customer’s journey with you and understand their needs better. Understanding your customers often puts you in the driving seat and retains the customers for long.

Despite customer success managers hoping that the onus of negotiating will be handled by the other teams, it is not that realistic. The CSMs will still have to encounter situations where they will have to negotiate deals with the customers and win over. In this blog, we will talk about 5 such negotiating tips and skills that are an essential guide for Customer Success Managers. But before that, let us brush up on some basics.

Table of Contents

  1. Active Listening is the Key
  2. Set the Bar for Discounts
  3. State out your Questions and Doubts
  4. Explain your ‘NO’
  5. Differentiate the Customer from the Crisis

The Art of Negotiation – Four Steps

The Art of Negotiation – Four Steps
Source: ProcureAbility

As they say, victory needs preparation – for getting a balance negotiation, you too need to have some level of preparation before you execute. Here are the four steps involved in achieving this:

  • Develop Negotiations Strategy: Know how well your customer support team is performing. What are the current prices being paid and are your customers even satisfied? Answering these questions will give you enough food for thought for the next step.
  • Prepare for Negotiations: Study the market and the target audience. Analyze the trends and know the best benchmark pricing in your niche.
  • Conduct Negotiations Session: Chalk out a worksheet with all the dos and don’ts. Define the team’s role and divide your work accordingly.
  • Follow- up and Provide feedback: Were the three steps preceding the final step adequate or does it need any reiterations? Go figure!

Active Listening is the Key

With active listening, you stand a chance to gather more information about the customer’s concern that can eventually augment your negotiating position. Most of the managers tend to miss out on deals as they speak more and listen less. Let not a similar case befall you. Active listening allows your customers to talk to you frankly. As a CSM, it is your responsibility to make the customer comfortable. Maintaining some eye contact with mirroring gestures can do well in this regard. Additionally, paraphrasing what you hear from the customers can give them a chance to clarify and apprehend better.

Set the Bar for Discounts

It could be a plausible scenario where your customer comes complaining that they see a new product in the market that has the same features as your product but at a better value. Hence, all they want is some concessions in order to continue using your product. That is when it is pertinent to know the maximum discount your company can allow at this point. When you set the bar beforehand, you are better focused on convincing the customer rather than worrying about the limit for the deal-breaker. Also, make it a point to trace out those customers who over demand.

State out your Questions and Doubts

In an interest-based negotiation, both the customer as well as the CSM get benefitted from each other. When you ask the right questions to your customers, you get better insights into what they exactly want. This way, you move the needle towards the negotiation. Here are some of the questions you can ask a customer during various negotiation phases:

 SITUATIONQUESTION
Customer wants to switchWhat can we do to make you stay?
Customer is dissatisfiedHow can we make your experience better?  
Customer cannot use your productCan you describe the query in detail? We will walk you through the steps.
Customer does not want to upgradeThe feature Z belonging to our upgraded plan can solve your issue. Would you like to upgrade?

Explain your ‘NO’

A customer does not want to hear a ‘NO’ and you know it. While there is no right way to say no, make sure that you justify your ‘NO’ with the correct examples and suitable explanations. It should be clear to your customer why it is not possible for you to second their demands. Tell them why the feature that they have requested is tough to achieve rather than blatantly refusing with a big ‘NO’. Some customers might take it too seriously and churn away instantly. Finding the balance is the key here.

Differentiate the Customer from the Crisis

As a CSM you will have to carry out tough conversations with your customer. When things get bitter, know that it is the crisis that both the parties get frustrated with and not really a customer-company thing. Disagreements are an inevitable part of your relationship. But it is equally important to work together and come to a mutual point and find a solution that does not lead to long-term damage. Do not give away too soon because of the fear of missing out on your customer. Entering into terms that you cannot meet or are not sustainable for your company will bring you no good anyway.

Parting Thoughts

You do not want the customer to leave yet you do not want to reduce the process too as that would cut away the profits. This is exactly where you need to deploy the seeds of customer success negotiation and know how to imprint the indelible art of negotiation. In each of the five steps discussed here, balance is the key. In the end, you will have to ascertain what best works out best for you.

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Originally Published June 2nd, 2021, Updated June 2nd, 2021

Simran Mohanty

Simran hails from the content marketing backdrop with extensive knowledge in blogs, articles, and technical whitepapers in the non-fictional domain. She uses her 'gift of the gab' to explore new possibilities on her way and to make an exquisite impact on her readers. In her spare time, she likes to read journals on artificial intelligence or play with her cute kittens. You can connect with her on LinkedIn here.

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