Search Results for: negotiating

Top 10 Tips when Negotiating

negotiation

Everybody needs to negotiate from time to time; at work, at home, as a leader, as sales person, and as a consumer. For some it seems easy, but others view the process of negotiation as a source of conflict to be resisted and avoided if possible. Negotiation is a process and a skill that can be developed. Negotiation can be described as a process that involves two or more people dealing with each other with the intention of forming an agreement and a commitment to a course of action where compromise needs to be reached in order to move forward. In a sales environment, not every sales situation needs negotiation however when a compromise needs to be reached negotiation often involves a series of communications between two parties to form an agreement about the details of a sales solution. In many cases, it is possible for a proposal to be generated that satisfies the needs of both parties this is called a Win:Win.

different types of negotiation outcomes

different types of negotiation outcomes

Win: Win – In this approach, both parties go into a negotiation or transaction with the intention that they will give something towards the transaction in order to receive what they want. This is the strategy that has the best formula for success. However, sometimes one or more parties may have to accept less than they had hoped for when they entered the negotiation process. This is when you come across the Win:Lose. Win: Lose – The second approach has a good opportunity for success given one party is open to giving in order to receive, therefore paving the way for the sale to proceed. Both parties are open to giving, although the second party will give only once they have received. However where this approach can fall down is when Party B waits too long, wanting to receive as much as possible. If they wait too long, Party A may decide they wish to reconsider and a stalemate could ensue. In the worst case scenario the fulfillment of one party’s wishes may come entirely at the expense of the other party’s. In a Lose: Lose situation both parties are unwilling to give before they receive. This approach is the least effective when it comes to negotiation, given that it is easy for a stalemate to arise. Unless one party is willing to take the risk of compromising, there is likely to be no negotiation. Therefore, negotiation is the process of navigating your way through each of these alternatives, ideally aiming to come to an agreement that is complimentary to both parties’ needs. So here are 10 tips to help you navigate you way through negotiations.

1. Develop ‘negotiation consciousness’: Successful negotiators are assertive and challenge everything. They know that everything is negotiable. 2. Become a good listener: Negotiators are detectives. They ask probing questions and then remain silent. The other negotiator will tell you everything you need to know – all you have to do is listen. 3. Be prepared: The boy (and girl) scouts were right. Gather as much pertinent information prior to the negotiation. What are their needs? What pressures do they feel? What options do they have? Doing your homework is vital to successful negotiation. 4. Aim high: People who aim higher do better. If you expect more, you’ll get more. Successful negotiators are optimists. A proven strategy for achieving higher results is opening with an extreme position. Sellers should ask for more than they expect to receive and buyers should offer less than they are prepared to pay. 5. Be patient: This is very difficult for some people. We want to get it over with. Whoever is more flexible about time has the advantage. Your patience can be devastating to the other negotiator if they are in a hurry. 6. Focus on satisfaction: Help the other negotiator feel satisfied. Satisfaction means that their basic interests have been fulfilled. Don’t confuse basic interests with positions. Their position is what they say they want. Their basic interest is what they really need to get 7. Don’t make the first move: The best way to find out if the other negotiator’s aspirations are low is to induce them to open first. They may ask for less than you think. If you open first, you may give away more than is necessary. 8. Don’t accept the first offer: If you do, the other negotiator will think they could have done better. They will be more satisfied if you reject the first offer because when you eventually say “Yes”, they will conclude that they have pushed you to your limit. 9. Don’t make unilateral concessions: Whenever you give something away, get something in return. Always tie a string “I’ll do this if you do that”. Otherwise, you are inviting the other negotiator to ask you for more. 10. Always be willing to walk away: Never negotiate without options. If you depend too much on the positive outcome of a negotiation, you lose your ability to say “No”. Remember everybody lives by selling something. Author: Sue Barrett, www.barrett.com.au

The Difference Between Selling and Negotiating

Listening to the Needs of the Customer

Many people, especially sales people, often share the mistaken belief that Negotiation forms part of every sale which is not true. We often hear ‘my people need to be able to negotiate’ when upon further inspection they first need to learn how to sell. The reason many rely so much on negotiating is that their initial sales job was a poor effort. They neglected to properly establish the clients’ real priorities and needs and didn’t demonstrate how they can help the customer achieve results; financially as well as via their products, services, knowledge or intellectual property. Instead they find themselves in combative positions needing to negotiate over misunderstandings and limitations and the price rather than value.

So before you and your team head to attend a Negotiation skills course first check if all you need to do is learn how to sell first.

Negotiation with Customer

Negotiation with Customer

Here are some tips that help you know when to sell and when to negotiate.

  1. If the customer expresses needs – you should SELL – by addressing and satisfying these needs.
  2. If the customer expresses objections – you should SELL – by correcting any misunderstandings, managing any limitations which outweigh the objection and providing documentation, if needed.
  3. If the customer expresses interest – you should SELL – by closing the sale and taking the order.
  4. If the customer rejects the deal and makes demands – you should NEGOTIATE – by Buying time if needed; Analysing the proposal from the perspective of the Customer, Competition & Priorities; Analysing the proposal based on your objective, the negotiable points and non-negotiable points; added or equivalent value.
  5. If the customer considers your proposal – you should NEGOTIATE – by presenting the best two options given the client choice and correctly positioning your offering from a Value and Functional perspective.
  6. If the customer accepts the best proposal option – you should SELL – by closing the sale.
  7. If the customer rejects the best proposal – you should NEGOTIATE – by having fallback position proposal offer.
  8. If the customer accepts 2nd fall back proposal – you should SELL – by closing the sale.

Make sure that your sales people know the difference between selling and negotiating by initially training them in good consultative selling process. When they have that mastered, move to training in negotiation skills. Good selling should never need to be combative nor should good negotiations. If done well on every level there should be a win:win for all.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Influencing vs Negotiating

It has often been said that very strong negotiation skills are critical to being a high performing sales person. However, findings from our “sales force fitness” profiling work, where we profile critical qualities for successful sales performance in many businesses, large and small, is telling a very different story.

Before you invest your training dollars into negotiating skills training for your sales team, you might like to think about investing it into influencing skills training instead.

Why? The ability to positively influence prospects or clients towards your brand and product offering – more so than negotiation – is what is needed in today’s market.

Products/solutions are often quite clearly defined and a salesperson’s ability to negotiate price and value-added services is limited in today’s market.

We are now finding some companies are setting prices for their sales teams with no room for negotiation, thus eliminating price negotiations altogether.

(Not always a bad thing if you ask me, given all the pricing discounts I have seen sales people giving away unnecessarily over the years.)

So what is a sales person to do now?

We are consistently hearing in interviews with high performing sales managers and sales people that the ability to positively influence the client is a more critical competency than the skill of negotiating. This has direct relevance to the emotional intelligence (EI) area of managing others emotions.

The emotional management of others is the skill of influencing the moods and emotions of others. A sales person’s ability to:

  • Influence a prospective customer to say ‘yes’.
  • Overcome a customer’s reservation towards a new product.
  • Help a client feel enthusiastic about a product they recently purchased.
  • Plan with a client how to best engage their ‘economic buyer’.

These are critical to success in business today.

In addition, we are finding that:

  • Accurately reading the client, gauging their reactions and then adjusting your own style is also being highlighted as a key competency of high performing sales people. This is relevant to the EI competency of recognising emotions of others, emotional reasoning and managing others emotions.
  • Building relationships and trust is also critical. For the past three of our major corporate projects in assessing “sales force fitness”, it has been cited as a key point of competitive difference. The ability to build trust-based relationships is influenced by a number of EI competencies – emotional self awareness, emotional awareness of others, ability to influence others’ emotions and emotional control.

Ask yourself: “How effectively are my sales people perceiving, understanding, reasoning with and manage their own and others’ feelings.” These skills are cornerstones to successful selling, as emotions are an inherent part of why people buy and why they do not.


Survival of the Adaptive P1: focus on changing buying habits

most-adaptive-part1

Charles Darwin’s Theory of Evolution is often misquoted as being ‘the survival of the fittest’ when in fact it is ‘the survival of the most adaptive’. And that is how we need to be if we want to survive and thrive in these ever changing markets – adaptive.

This series of ‘Survival of the Adaptive’ articles will look at the key things we need to do as sales teams to contend with the many changes afoot in our 21st century world and market place.

One of the ways sales teams can adapt and really get ahead of the curve is by paying attention and focussing on how customers and prospects are buying, how their buying habits are changing.

The digital revolution and the explosion of social media has profoundly changed what influences customers. When considering a purchase now, buyers (with easy access to literally hundreds of alternative sources of supply) tend to read online reviews and compare suppliers and price.

Once face-to-face with a salesperson customers are obviously in a stronger position than ever before. After the purchase buyers become reviewers of service delivery. They have become more demanding about ongoing relationships with suppliers who they pressurise for added attention, incremental service and support. And because they have the negotiating upper-hand, they can usually get what they want. If a supplier decides not to meet their demands, buyers are able to quickly and easily switch.

What is surprising is that many salespeople – even though they are aware of these changes and their managers have access to terabytes of data about buyer behaviour – still fail to assess just what influences their customers and prospects today.

Those that have a sales strategy that proactively monitors buyer behaviour and build responsiveness into sales activities are finding that by replacing traditional above-the-line advertising with Internet-based social interactions and deploying salespeople to help buyers integrate solutions rather than simply push their products and services are generating more business, at better margins.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au 

How buying patterns have changed

how-buying-habits-have-changed

Salespeople everywhere are faced with demands to meet increasingly high quotas in the face of growing market complexity and relentless financial pressure. There is also more competitors with Me2 products –just as good as brand names–, and an increased pressure on margins with buyers reluctant to make early commitments. Salespeople are facing demands like they never had before.

Current research from the Behaviour & Economic Research team at NAB¹  states that forward orders (in 2014) were very patchy for both big businesses and SMEs, making it very hard to forecast sales and manage pipelines. This only confirms the reticence of buyers to commit to purchase, which is felt by sales teams all around.  

Buying patterns have indeed changed making getting and winning sales that much harder. Just ask the salespeople out there. They will tell you things aren’t like they used to be. As salespeople we have to work smarter and harder. I can personally attest to that with over 30 years selling experience under my belt.

Buyers also can have the negotiating upper-hand, especially when comparing products and prices. If the salesperson can’t sell in real value and is only left with product and price, the buyers can usually get what they want, often at the supplier’s expense. And there’s also the buyers who don’t care about value, and are just after the lowest price possible.

If a supplier decides not to meet their demands, buyers are able to quickly and easily switch.

Social Media Social Networking Technology Connection ConceptOnce face to face with the prospect or client, the salesperson encounters a (potential) buyer who has more information than ever before; whether they are well-informed or ill-informed is another matter (see points 2 and 3 below). Buyers have become more demanding about ongoing relationships with suppliers who they may pressure for added attention, incremental service and support whether they deserve this attention or not.

After the purchase buyers become reviewers of service delivery and can make, break or dent a company or salesperson’s reputation by online reviews and the digital word-of-mouth.

These findings are backed up by a recent Mckinsey & Company report: ‘Do you really understand how your business customers buy?’ They highlighted

“The consumerization of business buying… Marketers have long drawn a bright line between consumer shoppers and business purchasers. Consumers, after all, care deeply about brands and are more readily influenced by advertising, media messages, special deals, and coupons. In addition, they often turn to friends and family for advice on what they are buying, are susceptible to impulse shopping, and can switch from one brand to the next with little cost. Business purchasers, by contrast, do a lot of research, look carefully at specifications, follow a formal buying or procurement process, can experience high switching costs, and usually worry most about functionality.

Yet an explosion of communication vehicles and interaction channels has ratcheted up the expectations of business purchasers. Many more influencers and decision makers are now involved in the purchasing process, and business buyers too have been shaped by their consumer shopping experience. As a result, their behavior has become more consumer-like. There is no longer such a thing as a simple cold call: customers expect a sales rep to be extremely knowledgeable about their business and perhaps even their own individual profile—at least if the purchaser is a millennial who has grown up sharing his or her life online. In other respects, as well, the purchasing process is becoming more fluid.”

With all these changes in buying patterns going on, it is surprising to find many organisations ignoring them and going to market with old approaches and strategies. What it is also surprising is that many salespeople – even though they are aware of these changes and their managers have access to terabytes of data about buyer behaviour – still fail to assess just what influences their customers and prospects today.

Interestingly, the few companies that have recognised these changes have adapted their sales strategies to accommodate them and as a consequence are making market share and margin gains – well in excess of their rivals in the same sales segments.

So what do we need to do?

Focus on how customers and prospects have changed their buying habits
NB: the last time we spoke about the issue of sales and social media we focused on companies whose clients and prospects are not necessarily internet users, or at least not for all intents and purposes. The information below focuses on buyers in markets highly influenced by digital media.

Laptop, Mobile Phone And Digital Tablet Pc Computer

The digital revolution and the explosion of social media have profoundly changed what influences many customers. Here are some interesting facts:

  1. Approximately 78% of B2C and 75% of B2B buyers use the internet and social media to research suppliers.
  2. When considering a purchase now, buyers (with easy access to literally hundreds of alternative sources of supply) tend to read online reviews and compare suppliers and price. In fact, consumers engage on average with 11.4 pieces of content prior to making a purchase.
  3. One study by Sirius Decisions (a global B2B research and advisory firm) indicates that 67% of the buyers journey is done digitally.
  4. Consumers are 5 times more dependent on content than 5 years ago.
  5. The B2B buying process is taking around 20% longer to close because of multiple stakeholder decision making –management by committee; in fact, LinkedIn as reported that on average 5.4 people are involved in the B2B buying decision making process.

Those sales and business leaders that have a strategy to proactively monitor buyer behaviour and build responsiveness into sales activities that work with buyers are finding that by replacing traditional above-the-line advertising with Internet-based social interactions and deploying salespeople to help buyers integrate solutions rather than simply push their products and services are generating more business, at better margins.

¹ http://business.nab.com.au/biggest-issues-facing-australia-today-special-report-9422/

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au 

Sue Barrett is the founder and CEO of the innovative and forward thinking sales advisory and education firm, Barrett and the online sales education & resource platform www.salesessentials.com. Sue was the first in Australia to get Selling a university qualification and has written more than 600 blog posts and 21 e-books on sales and with her team produces the ‘must read’ Annual 12 Sales Trends Report. Striving for better sales practices and improving sales teams and operations, Sue is a Sales Philosopher, Activist, Strategist, Speaker, Trainer and Adviser. Get to know her further on Twitter, Facebook, and Youtube.

 

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