You don’t have to discount price to win good business and good customer relationships even in tough markets.

I mentioned earlier this year my team and I are working on a large sales fitness training assignment in the finance sector around Australia.  These guys are hard up against it when it come to ‘price’ being a key target at the moment.  A number of their competitors are trying to buy market share with discounted prices.  The market is being hammered with ‘discounting’ of all sorts – some clear, some not so clear and some very dubious.

Many people have commented ‘Is this the right time to be investing in these people given the state of the market?”.

My reply is ‘This is exactly the right time to be investing in your sales people’.  And here is why.

Despite the doom and gloom and the current ‘price war’ trend this business and its people are winning good business and good customer relationships.  They are really focusing on applying what they have learnt, following a disciplined sales process, focusing on real client issues and needs and delivering real value by way of integrated solutions that are well priced and fair for all.

They have adopted a disciplined sales approach, have clear leadership and a clear, consistent  market message – see http://www.barrett.com.au/blogs/SalesBlog/?p=125

So I thought it would be worthwhile to share some of good news sales coming from the ‘tough’ markets of finance and show you what can be done if you set your mind to it.

Here are some good news sales stories fresh from the field as of last 2 weeks:

Follow A Structured Sales Process:

‘Having a few wins, did an end-to-end solution presentation yesterday with all that wonderful structure. It went pretty well and the “prospect” was very happy with everything. He was absolutely thrilled that we could satisfy all of his concerns and that I could facilitate every need. I was pretty happy with it, went off track a few times but checked myself and went back to the process.’  Business Manager

Determine Priorities

‘Last week, we were invited by an accountant to meet with a company to discuss their business and finance needs.  We were one several companies invited to present. We were informed after all the initial meetings were held that we were one of only two businesses invited back to talk further.  It was stated that we were the only business to really take the time to understand the key priorities of this business and not go into product mode.  They said this was refreshing and what the company was looking for in a partner.  Outcome: Discussions progressed to next stage.”  Business Manager

Offer Choice

‘We were approached by a current client with a pricing challenge i.e. the client said he wanted a cheaper price.  Instead of dropping the price, we chose to put the ‘price’ to one side and actually focus on what the client really needed.  Once we had a thorough understanding of what he needed we then presented him with 3 options – a basic, middle tier and end-to-end solution.  We invited feedback from the customer and he ended up taking the end-to-end solution.  It was also revealed that security was his key priority not price as originally stated.  Outcome: Signed up to new deal not based on a discounted price.’ Senior Manager

Beware the ‘too good to be true deals’

‘One of our clients came in with a deal from a competitor.  The client said it looked good on the surface but that he didn’t really understand it.  Even with all my 30+ years of experience I admitted I couldn’t make sense of it either.   It looked too good to be true and upon further investigation it was.  I asked the client what he wanted to do.  Outcome: Our Client tore up the competitor deal and stayed with us.’  Senior Manager

What can we learn from them?

• Address your customers key priorities first and create a solution that helps them achieve their objectives you can put ‘the price’ in the right perspective.
• Follow a structure sales process that keeps you on track helps you stay focused on your customer.
• Get any competitor deals in writing before quoting so you can compare apples with apples.
• Give your clients choice. Present some options which helps them make an informed decision about moving forward.
• Have a clear message.
• Be confident in your offerings.  Don’t get spooked.
• Be honest, up front, transparent and ethical in your dealings always.

Happy selling.

Everyone I am speaking to, at least, are aware they are working in a softening market.  Some businesses of course are counter cyclical, meaning they can make money in these tougher times i.e. outplacement firms for all the obvious reasons, but they are more the exception.  If you market is softer or heading or a down turn it doesn’t have to be all gloom and doom.  It’s true now you have to earn your real money through proactive sales practices.

So with on the agenda, one of my clients in regional Australia kindly sent me a great article on “The three basic sales strategies in a softening market”.  It was presented at the client function of a regional accountant firm he had attended.  The article is by Robert Miller, who wrote Strategic Selling and set up Miller Heiman group.  Here the excerpt from the article:

“Here are three strategies proven by winners to work in a downturn:

1. Count your chickens.   Make sure that you are looking after your existing customers better than usual (if that is possible) because there’ll be plenty of hungry competitors out there to do anything to steal them from you.  If you step up first, and raise service levels when everyone is talking doom and gloom, you’re going to be a beacon in the dark, and attract both old and new customers alike.  You’ll also raise the bar so high your competitors will waste a lot of valuable resources trying to jump over it.
2. Find your lost chickens.  Lost and lapsed customers – and ones you just plan mislaid, are still more likely to buy from you again, than a new client.  So it makes sense to go back, find those lost chickens, apologise, crawl over broken glass if need be and win them back into your pen.  We all lose customer in good times for the simple reason that sales people like the thrill of chasing new customers more than the drill of looking after the old ones, so there will be lost chickens on your books.  If you dropped them because they would not meet your price, see if there is a way you can meet their price point profitably with and economy offering.
3. Steal someone else’s chickens.  With competitors cutting service levels you have the perfect opportunity to raise yours (having first done if for your own customers, you should be good at it!) and steal their chickens.  If you’ve retained all of your sales force when the market is rife with lay-offs, you’re in the perfect position to ask your entire sales and service teams to step up to a new mark and secure their company’s future (they know they are thereby securing their jobs, so you don’t need to raise this as a threat).

The odds are in your favour
Here are some interesting odds calculated for four types of sales behavior.  They might not be precise for your industry, but I’ll guarantee their relativity is accurate regardless of your market:

1. Sell a current customer a current product: 2:1
2. Sell a current customer a new product: 4:1
3. Sell a current product to a new customer: 8:1
4. Sell a new product to a new customer: 24:1”

I found this to be a true in most situations and a useful guide to keeping your sales pipeline fresh and full in these softer markets.

Happy counting chickens and selling.

I awoke early this morning to the sound of gentle rain falling and found myself immediately praying for more.  This prayer came automatically during one of the most tragic weeks in Victoria’s history with the tragedy of the bush fires in many parts of our state.

As a Victorian I have found myself upping my prayer quotient for rain for some time now, not just for the bush fires but for the many people whose lives are affected by the drought here and elsewhere.  In addition to my prayers, like many families, my family and I have been doing our best to save water and change the size of our carbon foot print.  Yet at times like this one can’t help but feel somewhat helpless and useless.  All I felt I could do under the circumstances was to pray and give money.  And the irony of Australia is that our Queensland cousins have been praying for the rain to stop.  I hope both our prayers come true.

As I lay there that morning thinking about the feelings of helplessness many are feeling in the midst of nature’s power over our collective destiny, it got me thinking about what we can control and what we can’t control and the importance of hope, purposeful action and good news.

It got me thinking about what people do in a time of crisis and how they fight to take back some control and regain their balance, albeit a new balance in many cases.  Witnessing the collective strength, courage, tenacity, compassion and determination of the people directly facing and dealing with the consequences of the fire and floods shows us what we are really made of.   It shows us that despite the grief and suffering we are experiencing we are resilient and determined to begin again.   It shows that people are able to take control and attend to their fellow human beings with kindness, compassion, support and purposeful effort.   It gives many of us hope that we have a shared future, albeit a future that is fundamentally changed forever. It is said that a crisis brings people together and highlights the most amazing qualities in people.

The fire and these human qualities were the key topic at a business leaders forum I am a member of  and attended the other day.  We discussed people’s resilience, determination, courage, creativity and ingenuity to work together and find a new way forward.  We also discussed the importance of giving people hope, clear information, positive news and strong, clear leadership in a time of crisis.

We discussed the fires and the impact on our collective psyche.  This then lead us to discuss more broadly how many people are feeling helpless and somewhat hopeless in the midst of the global financial crisis we find ourselves in now.  The global financial crisis was likened to a fire storm with the bad news still coming.   This association was not meant to detract from or trivialise the bush fires and the terrible consequences for all those directly involved in anyway, however the metaphor of fire and smoke was used to help us think more broadly about the consequences of our actions at all levels during these unprecedented times.

It was stated, among  other things, that the smoke of a fire is usually the most deadly, and many more people die of smoke inhalation rather than from the fire itself.  The ‘smoke,’ in relation to the global financial crisis, was the doom and gloom being spread about the world.  The group felt that the haze of fear and uncertainty which is affecting many in relation to  job losses, financial loss, business closure, family and community breakdowns, etc. is not being properly offset against the creative and positive opportunities for change and learning that also exist in these challenging times.

It was reported that the group had seen some people so distressed they are paralysed by fear and feel unable to see a way forward and take decisive action.  We expressed our concern that this may lead some people doing things that may lead to further grief and turmoil because the ‘smoke’ of fear was choking them.

The media (rightly or wrongly) was singled out by this group as a major culprit for taking a particularly negative stance on offering up a diet of bad news and for not providing a more balanced approach and insight in reporting on constructive, positive, hopeful news stories coming out of these challenging times.  We felt the media could do a lot better in this instance given their influence on our psyche.

Many in the group said they were refusing to watch or read the news now and decided to take a more proactive stand despite the media.  This wasn’t avoidant behavior, they were choosing to clear the smoke and gain a fresh perspective and look at the real evidence at hand.

We discussed that the positives coming out of this financial storm and how this has allowed many people to rethink what they want to do, how they want to really live their lives and run their businesses.  It was commented on that after any fire comes new growth and new opportunity.

We all felt that this financial crisis, as challenging as it is, gives us all the opportunity to create a ‘new’ normal.

We talked about people, businesses and communities, who despite the haze of gloom and doom are not taking this major crisis lying down.  They are looking for signs of growth, for collaboration, for a ‘new normal.  They are bucking the trend of despair and fighting back, dealing with adversity and seeing the world a new.  It is what we as humans do to give us hope.

Our group said we wanted to see more of these constructive, positive stories about what people are actually doing to make the most of their situations represented more in the media.   We want to hear and have broadcasted how people are creating their ‘new’ normal, their ‘new’ ways of doing business and how they are working collaboratively together instead of in competition.  One of the leaders who attended the meeting, mentioned that instead of attacking his competitor in these tough times, he intends to meet with them to discuss how they can work together to survive and begin to thrive again in business.

Other people I am speaking to within the business world are sharing similar stories of opportunity and the creating the ‘new’ normal.

Ironically, the very same media who have been reporting on the financial gloom and doom are looking for good news stories from the fires to give us hope.

What this leadership group wants is for the media to up the reporting on good news business, environmental and community stories where people are creating jobs, looking at ways to secure their future and so on not to just feel good but because they are actually happening and are real.

I must say I was heartened by this discussion, unlike another major business leaders event I attended two weeks ago that seemed to dwell on the negative and was trying get us back to ‘old normal’.

Whether the media responds to our request or not I encourage  everyone in business to go out and meet with your clients, suppliers and partners. I encourage you to meet with your friends and communities.  I encourage us all to listen to and understand each other like we never have before.  Find out how what we each value and what our priorities are and how we can work together to create a more sustainable future and make this best of it despite the prevailing circumstances.  I encourage us to share stories of new opportunities and different types of growth models that don’t just rely on growing bigger and consuming more non renewable resources by selling stuff for stuff sake.

We all agreed that we need to draw upon our resilience, determination, creativity and ingenuity to work together and find a ‘new’ way forward.  Just like we are witnessing at the moment in this time of tragedy.

At this meeting our chairman quoted from Charles Dickens ‘A tale of two cities’ which seemed quite apt in relation to our times and the choices we have to make:

“It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness; it was the epoch of belief, it was the epoch of incredulity; it was the season of Light, it was the season of Darkness; it was the spring of hope, it was the winter of despair; we had everything before us, we had nothing before us; we were all going directly to Heaven, we were all going the other way.”

Despite the difficulties we all face we can still pray and act with clear purpose and make the most of what we have and what will become.

And I’ll keep praying for rain here in Victoria and for all those people affected by the fires and floods, for our environment and our communities and keep doing my best to change my ways for a better more sustainable future.

PS Let us know your good news stories and maybe we could start here our good news push here.

I often get requests by sales mangers for negotiation skills training for their sales people when in fact upon further investigation their people usually need consultative selling skills training first.  You cannot negotiate effectively if you cannot sell effectively first.  Both are processes which need to be learned and applied in the correct order.  However over 90% of sales people follow no logical process when selling or negotiating leaving their sales at risk.

So to clear up the confusion between selling and negotiation I thought it might help to examine when you sell and when you negotiate.

It’s important to note that when you are selling, negotiation is not mandatory.  You do not have to negotiate at all if the customer’s issue is very serious and outweighs the cost of your solution and they to buy outright

Everybody negotiates all the time, at work, at home, and as a consumer and as a sales person. For some people 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. In a sales environment, 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. However, sometimes one or more parties may have to accept less than they had hoped for when they entered the negotiation process. And finally, in other situations, the fulfillment of one party’s wishes may come entirely at the expense of the other party’s.

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.

Possible outcomes
There are five possible outcomes of negotiation:

1. Compete = Win:Lose
2. Avoid  = Lose:Lose
3. Accommodate = Lose:Win
4. Compromise  = neutral
5. Collaborate = Win:Win

In my experience when I negotiate I aim for #5 and get either #5 or #4.  I know that I do not want #’s 1-3 to happen.  However too often I see sales people end up with #’s 2 or 3.  This is no good for anyone and can train clients to expect things they do not deserve like unnecessary discounts.

Rule of thumb for negotiation in sales:

• Unless you have the power or authority to change or modify terms, create new product solutions, you cannot negotiate.
• Negotiation should never be a substitute for selling. You need to be able to sell well first and foremost.
• Negotiation is an effective strategic tool that you use ONLY when you need it.
• The earlier you give away concessions in the sales process the less impact they will have.
• Be aware of giving sales people the authority to discount.  All too often this is a licence to give away your margins too soon and too often.  We see this when people ‘cave in’ on price too soon for fear having to deal with potential conflict which usually doesn’t eventuate if the sale is done effectively.  However they never let the sale run its course to find out.
• Discounting is a negotiation tool that should only be applied as a last resort and should have a trade off in it for your business so can you benefit from the deal as well.  This is different from volume pricing which rewards people for buying bulk from you.
• If you postpone tough negotiations whenever possible you will miss learning about new things, getting new ideas, new ways of pulling your offer together as well as creating potential conflict down the track.

You sell when you:

• Identify clients’ real needs and priorities, create viable solutions that are of value to the client and outweigh the cost of purchase and gain agreement to move forward to close the deal and do the work.
• Can’t vary the terms.  If you can’t vary terms and negotiate and the client won’t agree to move forward with you on the current plan then it is a ‘no sale’.  Move on rather than give it away.  Giving it away is not negotiating it is just giving something of value away which costs you.

You negotiate when you:

• Both parties can vary the terms
• Resources are scarce
• Agreement and conflict exit simultaneously

Value versus Cost

To help you avoid unnecessary negotiations when selling first of all find out what people really value and what is most important to them.

If you and your sales people are having trouble doing this then you need to improve your and your sales teams’ ability to have quality business discussions with clients and prospects, in particular, their ability to thoroughly understand their customers priorities and business needs and how your products and service can be crafted into relevant solutions that will address specific requirements and create value for the client.

This would include developing their questioning, creative problem solving, up selling/cross selling and solution selling skills.

Effective negotiation in a sales situation requires people being able to:

• Be Assertive
• Challenge every assertion
• Get the real facts before offering up anything
• Uncover real needs and issues
• Negotiate late and negotiate little
• Manage conflict and not take it personally
• Analyse the situation and the demands and weigh them up appropriately
• Keep the customers’ needs in mind at all times as well as your own
• Aim high
• Respond to demands for concession
• Develop a proposal with guide-lines and trade-offs (if necessary)
• Prevent the customer from ‘fragmenting’ your proposal
• Present a total proposal that ‘adds up’ to a win/win solution
• Focus on achieving satisfaction for both parties
• Don’t make the 1st move
• Don’t’ accept the 1st offer
• Are willing to walk away
• Use all their most effective communication skills (listening, paraphrasing, questioning, problem solving, etc.)
• Apply a process
• Don’t avoid negotiations
• Have a ‘negotiation consciousness’

When do you need to negotiate instead of sell?

• When a client demands an arrangement which is different from what you are able to offer
• When you are dealing with a tough client who wants to ‘win’
• When a client and you disagree on some aspect of the proposal
• When the client will not agree to your initial offer (find out why because some people just like to win and want to bargain as part of the process.  This is quite common is some cultures as part of the ritual of the sale)
• When we are unable to reach agreement, even after many discussions
• When you can’t move forward unless you change your approach some way
• When you can’t deliver from you current suite of resources or you need to step outside of what you normally do to win the business (take care as this can be very costly)

I hope this helps put some perspective to selling and negotiation. I have found Neil Rackman’s Major Account Sales Strategy book is a good resource on this topic.
Happy selling and success to your sales negotiations.

Contact us to improve your selling and negotiation skills on 03 9532 7677 or You can reach me via http://www.barrett.com.au/AboutUs/ContactUs.html?ONEPAGE=TRUE.