Whoever is in B2B Complex selling, all of us go through the “negotiation” phase of “Sales Process”, Unless you are a Monopoly or a Utility player in your industry, most of us go through it time & again.
Few of us have undergone “Negotiation Skills” training in our Sales Career. It taught us several concepts viz. “Body Language, Eye movement, Negotiation styles such as Good cop- Bad Cop etc”. I am assuming most of the sales reps become good in their observation skills over time. So, I won’t go deeper into the above.
Based on my own selling/team-management experience and working closely with diverse Sales Organizations, I have tried to capture key differences in traits between “Best” Sales Professionals and the “Rest” in their ability to manage “negotiation”. I am not claiming following to be always true. Just that, it pains to see “Hardworking Sales reps” at times giving away steep discount. Had they played their cards well (still maintaining win-win with their customers) and prepared a bit more, their company’s margins could have been better. Following is based on my learning. Feel free to correct me, add more points or ignore what you feel is irrelevant. Here you go.
Average Hard-working Sales Rep | Great Sales Professional |
|---|---|
Consider selling and negotiating as same or overlapping | They know - Negotiation is not a substitute for selling |
Negotiate too soon | They negotiate late. They Negotiate only, when necessary in the buying cycle |
Don’t know much about customer's decision criteria | Have done her homework well before getting into negotiation. This helps her focus on areas of maximum importance to the customer, instead of remaining "pricing" focused |
Negotiate primarily on price | Keep larger picture in mind. Generally, don’t keep price as an initial point |
End up giving steep "concessions" | Knows various Negotiation levers eg. "Trade Off". Split the difference", “extension” etc. Gives (steep) discount as a last option |
Prepare to react/defend for Nego meetings | Also use "Questions" as an effective strategy tool for Nego meetings |
Take extreme stands - either they don’t budge at all or give a heavy discount | They prepare their upper and lower limits of negotiation range and subsequently narrow the difference |
Mostly lands up in Lose(for seller)-Win (for Customer) | Prepares and achieves Win-Win |
Tries to keep controversial Scope of Work items under the wraps. Mostly it leads to escalation during implementation stage | Explicitly discusses everything to avoid surprise during implementation phase |
He is under pressure while entering negotiation meeting | Knows well that even other side (customer) is under pressure as well |
Enters late in the sales cycle (mostly at RFP/RFQ stage). Don’t have coaches in the deal | Enters early in the sales cycle (at problem/concept definition stage). Have been able to develop coach/es. Hence gets required insights/guidance before negotiation meeting |
Does not prepare in a structured manner for the meeting | He follows "meeting preparation" process. Knows how to start the meeting, what questions to ask, he pre-empts customer's questions /expectations/ reactions/ objections, prepares his responses for different scenarios and knows his best case and worst-case position |
Generally, drops his price too soon. Don’t have plan B if customer does not agree to his offer | He has developed alternatives and tries to optimize outcomes. He will go for Win- Win |
He does not do a great job during "selling" stage and positions his solution as "me too" | Does a great job during "selling" stage and positions his solution as "uniquely differentiated" |
He is not able to think like the other party | He thinks like his customer and knows what the buyer’s actions/expectations at this stage of buyer’s decision-making process would be |
Does not know what buyer's view about importance of his product or "difficulty of substitution" of his product | Knows well where his product and his company are positioned in Buyer's internal analysis of "segregation of suppliers" |
Does not know Value/ROI of his product for the customer | He develops himself to sell on "Value" and not on "cost". His coaches guide him to maneuverer the Nego process |
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I am sure there are many more to this list. One key point I would like to highlight is – “Negotiation is not a substitute for selling”. Selling done well eases the negotiation pressure.
Selling + Negotiation (backed by Structured meeting preparation) should improve the odds of winning, winning with right margin and eventually creating Win-Win with our customers.
