A dilemma many sales directors and managers face is the question about the scope for negotiating they give their salespeople. Over the years they have told me that the more they give a salesperson to negotiate with the more they will give away. As a result some decide the best course of action is to give them nothing and then when there is a need the salesperson has to involve them and they will make the decision. May be it is a power / authority thing, may be they just don’t trust their salespeople (and they haven’t considered that setting rules and training them may eliminate any need for concern)? May be they use it as a way of staying involved in the day-to-day selling to give them a feel for the marketplace and may be they use it as a vehicle to prove they’re worth their higher salaries and expense accounts (oh how the cynicism flows!).
What is interesting however is that when they get to negotiating the outcome can be the same as if their salespeople had handled it. In both cases the supplier concedes something to win the order. Let’s cut the ‘nice-ities’ and call it what that really is … discounting. Of course many salespeople will give you a hundred and one reasons why it had to be done:
- “They threatened to place the order with the competition”
- “We’ve spent too much time and effort to lose it at that stage”
- “The most important thing was to win the order”
- “It was done to get closure on that day. If we hadn’t done it they never would have bought!”
- “They made it clear from the beginning we would have to do something to win the order”
… and so on.
Asked what they got in return for the price concession (or inclusion of additional products or services – i.e. ‘buy 100 and get 10 extra free’) and people get defensive. “You don’t know these people!” they exclaim. “Even if I asked them for something there is no way they would give it.” (Interesting little word that “even” – it means they didn’t even attempt it!) “And anyway I’ve tried it before and they didn’t give anything then either!” (Oh well … if they’ve tried then I guess that must be okay!!!)
Sometimes you have to take a step back, realise why you are negotiating (and more importantly why your customers/prospects are negotiating) and have the confidence to ask for something in return. You may be amazed at what you will achieve. Equally, there is a time for negotiating and a proven process for doing it. Get the timing wrong (and some customers will deliberately ensure you do) and don’t follow the process and you put the world against you, all the pressure on you and make negotiating something to be dreaded rather than enjoyed as what it is, part of winning the deal.
To identify if you would benefit from knowing more about how and when to negotiate, how to enjoy it rather than dread it and how to do it successfully answer YES or NO to the following questions:
- Are your sales people typically asking you what they can give in a negotiation without also asking what they should get in return for such a concession?
- Do your salespeople give you every reason why you should agree to concessions on behalf of the customer regularly without also stating why your offer is so good?
- Are your salespeople negotiating from the beginning of a sales conversation on occasion or worse still, all of the time?
- Do your salespeople just head into a negotiation without a plan of what to do and when?
- Do your salespeople know how to trade variables of your product and service and know their worth?
- Do many of your sales happen as a result of a concession?
- Do you fear losing an order when the prospect / customer threatens you with your competition?
- Do you find in a negotiation your customers seem very pleased with themselves – in fact more pleased than you do with the outcome?
- Are you uncomfortable with negotiating?
- Do you find yourself being rushed into a negotiation – i.e. before you think the sales conversation has run its course?
Where you answer YES to any of the above they are areas you / your team need to work on.
Learn how the most successful salespeople prepare to and then conduct their negotiations so you achieve better results now! Click here for details on my ebook The Negotiation Process and identifying Our Variables module.