This is very common in sales, where the client is constantly seeking concessions to which the salesperson agrees, up to a point. Sales people, especially less experienced sales people, often feel that concessions must be made to win the deal. Negotiation strategies, on the part of the sales person, seem to go counter to sales instinct, and focus on specific customer value delivered by the seller, which is unique, of value to the client, and often, not obvious or ignored intentionally by the buyer.
Increasingly, negotiation is becoming an important part selling. Formal negotiations learning is perhaps, one of the best investments, the company can make.
Five major problems
A combination of the recession and general business cautiousness in spending has created unique market conditions that will most likely persist long after the economy recovers. We see some of these as permanent changes in the buyer/seller relationship, making a major shift in negotiation learning necessary.
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These are the five major problems:
Sellers, more than ever, are, more and more, facing more professional procurement officers.
Increasingly price conscious customers, will most likely exist after the recession is over.
Deals are commoditized, with professional buyers focusing on price to the exclusion of all other features.
Irrational competitive company behavior including discounts and giveaways by competitors make some deals unprofitable.
Consolidation of customer base through mergers and acquisitions and business closures make remaining deals bigger, and with that, more important.
Ultimately, this means that seller behavior must change, and negotiation learning becomes a top priority. As we become more commoditized, negotiation, and the ability to shift the focus from price to value, becomes paramount.
Two important questions
As we look at the sales process, particularly last year, and this year – 2009 and 2010 – we see some distinct trends in buyer and seller behavior. However, there are really just two key points that are pivotal to keep in mind in any negotiation, and the job of a good salesperson is to constantly focus on those and bring them back to the top of discussion:
What are the consequences to both sides, buyer and seller, if they do not reach an agreement?
What are the likely terms of the deal if the buyer and seller do agree?
No matter the tenor or tone of negotiations, in reality, these are the only things that matter. Ultimately, the buyer has only three options: 1. Buy from you; 2. Buy from your competitor; 3. Do nothing. Therefore, your negotiation strategies are of paramount importance.
The bottom line
If you haven’t focused on negotiation strategies with your sales team before, now is the time. Moving the discussion away from price and towards customer need is essential. Those who can do this will be the survivors.
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