Sales negotiation – 4 table stakes

gI_77080_negotiation-book-coverIn today’s B2B buying environment, negotiation is likely to be part of any sales cycle.  It is also true that the buying process is no longer a simple linear step-by-step interaction between the customer and the seller; hence negotiation may occur at any time in the process and it can occur more than once.  Plus, sometimes things are settled but then come unraveled as other customer decision-makers enter the buying process.

With these thought in mind we are always on the look out for ideas on the topic.

Recently we were struck by a column in the business section of our local newspaper sharing 4 “must haves” when negotiating deals.  Although they are fundamental, they are not easy to achieve in the heat the deal.  Let’s take a look:

1.    Elements must satisfy everyone’s interests

It’s necessary to ensure the deal satisfies the interest of both parties.  Of course, you can’t always know for sure, especially if the customer holds their cards close to the vest.  But if you start to pick up signals that the agreement doesn’t appear to be in your customer’s interest – yet they still seem willing to move ahead – it’s a red flag. Investigate more. Something is likely going on that will destroy the agreement later in the buying cycle.

2.    Incentives to ensure everyone’s compliance

Make sure the agreement includes clear provisions incentivizing all parties to comply with their commitments. No one can predict the future. But, including a clause spelling out the consequences of not complying is fundamental.

3.     Parties’ psychological commitment to deal

Secure, long-lasting business arrangements occur when everyone feels like they got a decent deal. Not perfect deal, but a sufficient, decent deal. You don’t want your customers resenting the deal over the long run.  This is particularly important in B2B sales because you will be looking for future business from the customer and customers have long memories.

 4.     Appropriate legal language

This is particularly important for smaller companies that are engaged in B2B sales and may not have an in-house legal staff.   Most significant deals involve legal verbage and provisions.  In the urgency to close the deal, this language may seem to be just a detail, but it isn’t.  The specific language and details can be hugely important down the line. Make sure you understand the legal provisions and the risks associated with them.

If you are going to be engaged in an upcoming negotiation and would like a comprehensive review of the topic, download our free eBook – Major Account Negotiating – we explore the negotiating strategies and skills used by top B2B sales performers including:

  • building the customer relationship
  • creating and sustaining trust
  • creating a bigger pie
  • planning a negotiation strategy
  • selling value first, not price
  • executing a negotiation strategy
  • price discounting and the importance of selling value
  • face-to-face negotiating best practices
  • handling deceptive tactics

In major accounts the aim of your negotiation must be to successfully close the deal and build the relationship. The first objective requires identifying, exploring, and addressing the interests and concerns of both parties. The second involves building and sustaining a collaborative climate. At the foundation of a successful negotiation strategy in an ongoing business relationship is to achieve a balance between these two, sometimes conflicting, objectives.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

 

 

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Sales excellence – listening is not a spectator sport

Active listeningListening isn’t a spectator sport.  You have to get in the game.  You must convert from thinking about listening as something that is passive – to something that is active.  Here are seven best practices to help salespeople do a better job at active listening:

  1. Make sure you understand what the customer is saying before you move on to the next topic – try summarizing.
  2. Ask the customer to expand on topics they position as high priority.
  3. Share your experiences with topics the customer raises to illustrate your understanding.
  4. Take notes to keep track of what is being said.
  5. Take into account not only what a customer says but also how it’s being said – like how they use qualifiers or evasive language.
  6. Listen for what is not being said.
  7. Turn up your listening volume when the customer introduces new challenges, high risks, and key opportunities.

Listening is one of the most under emphasized skills in selling.  We all know asking questions is a core competency but you cannot ask questions skillfully if you don’t listen.  Just as you can’t write if you don’t read – you can’t ask if you don’t listen.

Consider the Hundred Percent Rule – salespeople should take 100% of the responsibility for making sure the customer understands them. And take 100% of the responsibility for understanding what the customer says.

 Do you want to take a deeper dive into active listening, call planning and other sales skills? Click here.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

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Sales coaching – too bad it doesn’t happen more often

sales coaching

Sales coaching

People who are knowledgeable and experienced in sales excellence know sales coaching is worthwhile; it can make a difference; and it needs to be a priority.  Sales pros agree sales coaching is a necessity if you want a world-class sales team.

While most sales leaders agree about the importance of sales coaching, most also admit “the job isn’t getting done.”  Many great companies start sales coaching initiatives with tremendous energy and commitment.  Far fewer exit the other end of the tunnel.

Two developments increase the urgency for a renewed dialogue about getting sales coaching to happen.

Sales force performance is a bigger piece of the competitive advantage puzzle.  Presently, it is extremely difficult to sustain a competitive advantage by product alone.  Even if you have a winning product, the competition is likely to get a product to market that is just as good, at half the price … in half the time it took several years ago.  Although a superior sales force is extremely difficult to assemble and train, once you have one, it is of the few sustainable advantages left.

Sales excellence is more difficult to achieve.  Not only is superior sales performance more important than ever; it’s harder to get there.  Today, salespeople must develop their knowledge and skills to an unprecedented level.  Now top sales performers have to know more and know it at a higher level of competency than ever before.  In many companies, a substantial number of the top performers 15 years ago would not make the first cut for this year’s President’s Club.

One step for making it happen is addressing a critical stumbling block for achieving sales excellence – getting serious about sustaining a coaching effort.  In that regard it’s not that folks don’t think it’s important; they do – also is not primarily a lack of skill.  Sure some front-line sales managers need to improve their coaching but even when they do, sales coaching often still does not occur.

We would submit the fundamental culprit is lack of commitment and discipline.  Consequently another high priority sales coaching initiative or a new sales coaching training program, by themselves, are unlikely to fix the problem.

Enter Trigger Events

In organizations certain events occur that create an enormous amount of organic energy and focus.  This is due to the strategic importance of these events and the time, effort, and financial resources the organization has committed to making them happen.  Let’s call these occurrences – Trigger Events.

Launching an important new product, initiating a rebranding effort, implementing a merger/acquisition, and instituting a strategic sales shift like moving from selling individual products to selling an integrated solution are all examples of Trigger Events.

When it comes to sales coaching, Trigger Events are important because if you initiate a targeted coaching effort for making them successful, the importance of the Trigger Event will provide the focus and commitment necessary to make sure the sales coaching happens.  All Trigger Events represent some type of strategic shift so the sales team will indeed need to adjust and adapt their selling skills to the new reality.  So sales coaching is clearly needed and warranted.

Example – New Product Launches.  Let’s take the example of a new product launch.  In this case let’s assume the new product is a potential game changer.  In such a case the company would have committed substantial R&D and Marketing dollars and lots of people would be interested in creating a success story.

In is also true if the product is a game changer, then the sales team will likely face new sales challenges and a need to upgrade their selling skills.  So it will be easier than normal to get everyone behind the idea of implementing a six-month targeted sales coaching effort for helping the sales team get smart about selling the new product.  And if needed, it will also be easier to get the budget to implement manager coaching training or purchase a coaching software package customized for the new product.

Summary.  When it comes to sales coaching our observation is the problem is not so much about bad coaching but the fact that coaching does not systematically occur.  When it does occur, it works.

So one answer to the dilemma is connecting the sales coaching effort to a high priority Trigger Event that has everyone’s attention and focus.  Then our bet is the right people will get serious about sales coaching, its merits will be demonstrated, and perhaps sales coaching will become institutionalized.  And if the latter thing happens – that’s a good thing.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

 

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Customers have changed – so must the sales and marketing relationship

Sales-MarketingSales and Marketing can no longer be two trains passing in the night, as so many VPs of Sales we know lament.  The cost of not fixing this misalignment is now too high. Bridging the gap between Marketing and Sales must be a priority.

Customers are changing what they buy, how they buy and what they are willing to pay for it.  In general more people are engaged in the buying decision than ever before and they are more concerned about economic value.  They expect sales reps to function as trusted advisors, as opposed to, product facilitators.

This means that salespeople must operate differently. As shared by Lynn Vojvodich, the CMO and EVP of salesforce.com, salespeople must know more about their customers – specifically:

  • Who they are
  • What they buy
  • What they like

It’s hard to imagine getting this right without a high level of cooperation and collaboration between Marketing and Sales. The relationship between Marketing and Sales can no longer be limited to Marketing throwing leads and product brochures over the fence and Sales failing to follow-up.

If sales reps are to win where customers expect trusted advisors, then the collaboration between Marketing and Sales must exist throughout the sales cycle and be characterized by a relationship where each is helping the other do what they need to do.  It is all about cooperation and collaboration and integration – the cost and negative consequences of standing alone are now too high.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

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College graduates – should you consider a sales job?

Sales reps and new college grads

Sales reps and new college grads

From time to time we come across articles that tell a tale of doom for Sales as a career.  The stories predict dramatic reductions in the number of sales reps as the future unfolds.  So if you are in Sales or are thinking about it, it is only a journey for the occupational brave-of-heart – so they say.

Given this rather draconian version of the state-of-the-career, we were delighted to read a recent article in the Wall Street Journal by Lauren Weber.  Weber points out – “As the economy gains momentum, companies selling technology and other services to corporate customers are struggling to fill lucrative sales jobs.”

Weber’s voice is not one from the wilderness.  Hence we would suggest it’s not prudent to bury the sales profession quite yet.  Yes, there are industries where some companies have instituted substantial reductions in their sales teams.  The pharmaceutical industry comes to mind – for example, Eli Lilly laid off a 1000 salespeople in 2013.  It is also true that the profession is changing.  Today customers want sales reps that can function as trusted advisors not product facilitators and some current sales reps will not be able to make the shift.

However, if one looks across the wide variety of B2B industries, particularly in the technology sector, then the future for sales as a profession is better characterized by words like – expanding, exciting, challenging, rewarding, and even entrepreneurial versus descriptors related to gloom and doom.

Bottom line – if you are in college and just about to graduate then considering an initial job in the field of B2B sales actually is a good idea.

Let’s look at why that might be.  First, a couple of basic statistics – 1.6M students graduated from college in 2014.  The unemployment rate for college graduates between the ages of 21-24 is around 8.5% and the underemployment rate is around 16.8%.  For those underemployed working in jobs that don’t require a college degree, 20% are making $25,000 or less a year.  So although the job market has clearly been improving, particularly in the last several month, the search for great jobs for new college graduates is still challenging.

So why not look to those companies that Weber was talking about that were “struggling to fill lucrative sales jobs?”  For part of the reason let’s turn back to Weber’s article.

She points out that many young people are uninterested in Sales because “there’s a huge stereotype that Sales isn’t really a career.”  We would add to the stereotype description by noting that many young people feel that a Sales job is all about – being pushy, functioning as a lone-wolf, tricking customers to buy what they don’t need, risky because everything is based on commission – and the point of view that either everyone can do it or the perspective that it is a gift of birth.

All of the above is a dated stereotype that is more about Arthur Miller’s fictional character of Willie Loman than today’s B2B salesperson. There are no more born sales reps than there are born doctors or engineers.  So with the unemployment figures in mind and lucrative potential jobs being available, let’s look at some specifics as to why it might be worth considering sales as a first job out of college.

  • Establishes a great foundation.  Whatever your long-term career, having an initial experience as a salesperson establishes a great foundation because it provides an opportunity to interact with a wide variety of customers and other internal staff like marketing and technical support.  If you are a business major wanting to specialize in Marketing or a mechanical engineer desiring to do engineering design, then a better understanding of what customers want and need is a great first step.  
  • Develops a transferable skill set.  In today’s market becoming a skilled sales rep is not about learning a grab bag of tips and tricks or mindless hours learning product pitches.  The successful sales rep possesses competencies related to being a trusted customer advisor such as: resource management, relationship building, consulting and project management.  All of these types of competencies require being proficient in planning, organizing, problem solving, collaboration and communication.
  • Provides financial rewards.  Compensation for entry-level sales jobs and the financial rewards that can be achieved by making Sales a career stack up well against other fields.  In addition as the Wall Street article points out – some companies are rethinking their compensation packages to increase the fixed base portion, while maintaining the commission structure, to make entry-level sales jobs less risky – while still providing the potential for significant financial rewards.  Over time if you decide to make Sales a career in industries such as high-end medical technology, the financial packages can be in the mid six figures for high performers.
  • Creates a personal network.   Even with all of today’s computer-based job boards, the old saying – “getting great jobs is about knowing the right people in the right places” still holds a lot of merit.  An initial job in Sales provides the opportunity for you to meet a substantial number people in a wide variety of companies, as well as, a number of people inside your own organization.  If this resource is thoughtfully developed, it is a huge asset for career building for a multitude of reasons.
  • Provides an opportunity for personal development.  Regardless of your first job, one of the important criteria for selection is the degree to which that job provides an opportunity for personal development.  Does the company provide you opportunities to expand your technical and interpersonal skills? Sales is a key function inside any organization; hence companies invest substantially in the training and coaching of their sales team.  Last year American companies invested 20 billion dollars in sales training.

As a final note having worked over a 25-year period as a sales training consultant with a wide variety of companies, we have had the opportunity to meet and get to know a lot of people in the field of sales.  As a result we would add one more plus for taking a second look at sales as a career – your colleagues.  We have found sales people to be smart, hard working, personable, and perhaps most importantly a lot of fun to work with.

We also found there is a tremendous about of misinformation and myths about what sales jobs look like, what sales people do and work life style of salespeople.

So with all this in mind, if a recruiter from a great company comes by looking for sales reps, take an extra minute and see what they have to say.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

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Our most popular sales blog posts …

Curious as to which sales blog posts have been most popular? So were we! We’ve compiled them for you into the Winter 2015 edition of the Best of the Sales Training Connection. Take a look …

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Happy Valentine’s Day

Roses are red

Violets are blue

Happy Valentine’s Day to our readers

and to our clients, too!

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Do you understand the impact of pricing reductions on profit?

Sales - Profitability and Price

Sales – Profitability and Price

In a Harvard Business Review post, Rafi Mohammed reviewed an interesting McKinsey study on the relationship between price increases and profits.  Just to build a bit of suspense, try the following question – “How much would a 1% price increase boost your profits?”

In the study McKinsey worked with the Global 1200.  They found that a 1% price increase – if the demand remained constant – would result on average in an 11% increase in profits.  Not bad.  Think how many more units those companies and yours would need to sell to achieve an 11% increase in profits at your present pricing.

One moral of the story is – it is worthwhile to have an accurate assessment of the impact of price concessions on profit.  It is important that this knowledge is understood not only by sales management but also by the sales team.   Equally important is whether you have unknowingly sanctioned a dramatic decrease in profits by pushing for revenue gains by permitting your sales team to negotiate price reductions?

The key to the McKinsey study was of course – “if demand remained constant.”  So, on a strategic level what actions could you take to make that happen?  Let’s take a look at a short list.

  • Coach your sales team until they have mastered the fundamentals of selling value.
  • Review the relationship between Marketing and Sales – today the two must be aligned through out the sales cycle.
  • Reexamine the degree to which the sales team is effectively leveraging institutional resources such as: CRM system information, inside sales, engineering/technical support and company success stories.

It is okay in some situation to provide price concessions to win the business.  What is not okay is the failure to sell value first and negotiate second, not understand the impact on profit of price concessions, and the failure to understand how to provide valued concessions other than price that have limited negative impact on profit.

A good test about all this is – ask your sales team to estimate what a 1% price reduction is on the profit from a sale and then sit back and listen to the narrative.  A great follow up question is to ask what else might have been done to win the business.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

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Sales management coaching – the power of questions

Sales Coaching

Sales Coaching

Asking questions is an underpinning of successful selling.  The notion – ask, listen, and then talk is a powerful principle in the science of successful selling.

Asking questions is also an underpinning of successful interactions between salespeople and their sales managers.

Consider this …

Effective coaching is not so much about teaching people, as it is about helping them to learn – that’s why top coaches ask more than tell.  The problem is too many times when coaching, managers do it the other way around.  They don’t ask enough questions and they talk more than the sales rep.

Given all that we thought it would be a good idea to provide some specific questions that could be used to get the sales coaching session on the right track.  While there are no silver bullets, here is a starter list of 11 questions that could be used when coaching after a sales call.

  • How do you think the call went?
  • What do you think was the customer’s major walk-away from the call?
  • What specific piece of value did the customer gain from the call?
  • How did we differentiate ourselves from the competition?
  • If you could do the call again what would you consider doing differently?
  • What happen that you did not anticipate – how could you have prepared differently?
  • Which part of the call didn’t go so well? How would you improve on it?
  • What did you plan to do that you didn’t do – why?
  • Who did the most talking?
  • Did you leave the call with one of the advances you planned?
  • What did you learn from the sales call that will impact your future sales calls on this customer?

Obviously the sales coaching questions that you would use would depend on the specific sales rep and the type of sales call.  So your list of questions would be unique for each call.  However, when coaching it is always a good idea to plan some coaching questions before the sales call and then modify the list as the sales call progresses.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

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Beat your competition – focus on the customer

Beat your competition

Beat your competition

Beating your competition … today’s it’s likely that you are facing more and better competition than in times of yesteryear.

So how do you increase your win rate?  First, a competitive edge is rarely achieved by knocking your competition.  Knocking your competition puts the competition on center stage.  You need to focus on the customer and manage the competition.

Show your customers why you’re the better choice.  For example: Does your product better meet their needs? Is your company easier to do business with? Do you offer a better price? Are your terms & conditions more favorable?

To show that you’re the better choice, two steps are critical.

Sell outcomes not products.  You win more often when the customer has a clear understanding that you can help them to do what they need to do better than the competition.  How can you help them achieve their business goals and leverage their opportunities more effectively and more efficiently than anyone else?  This is what selling value is all about and it is why great product presentations are simply an exercise in theater – not a best practice for beating your competition.

Achieve a competitive edge.   To achieve a competitive edge you have to understand your competitive strengths and understand your customer’s perception of that assessment.  It is particularly important to keep in mind that your assessment and customer’s perception are often not in alignment – when that is the case that needs to be addressed.

So how do you do all this?

First things first – have an informed answer to these questions:

  • Who are my competitors that have a viable chance of winning the business?
  • What are the decision criteria the customer will use to decide between the competition and us?
  • How do we stack up on those criteria from the customer’s perspective?
  • Why would the players engaged in the customer’s buying process buy from us instead of those competitors?

When answering these questions, think about your responses from two perspectives – your company and yourself. In some cases, a customer may buy from you because of the service you personally provide as their salesperson. We see this scenario often in the medical device market.

In other words, an answer to that fourth question is:  the customer might buy from you instead of your competitor even if they don’t see much differentiation between products or price because you provide value by the way you sell, as well as, by what you sell.  You are the competitive edge.

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2015 Sales Momentum, LLC

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