One of the major advantages of an economic downturn (even a landslide like the current one is shaping up to be) is that there are great deals to be had. The challenge is that many of us are very bad at negotiating.
There is clearly an element of nature vs. nurture here; some of us are clearly genetically more inclined to haggle, while for others the process is more unpleasant and degrading than having teeth pulled.
This is especially true for salespeople who are typically outgoing and persistent, with a hide as thick as a rhinoceros. But when it comes to negotiating the detail of a deal, many experienced sales people crumble, especially under pressure from a well-trained negotiator or purchasing director.
Negotiation is a basic skill we use every day of our lives, whether it is making sure we get a cup of tea in the morning at home or in buying a car, when we are up against an expertly trained and highly motivated individual. Negotiation is not a black art: it can be studied and learned, and I have had advice from a true expert: Derek Arden.
Arden started his working career in a bank, in training and development; but soon found himself in major account management, negotiating with hard-nosed senior buyers at a large supermarket chain. He says he often left meetings with a strong feeling that he had come a distant second in the negotiation, if only because he was operating solo against a team of four people who were clearly expert in identifying and exploiting any of his personal or business weaknesses.
He resolved to read all the books available and go on courses to develop his own best practice for negotiation. He has since spent more than eight years passing on this knowledge to everyone from teams of salespeople to a high-profile individual in the Middle East who needed one-on-one coaching for family as well as business negotiations.
Arden explains that developing negotiation skills is a constant process; you always learn new techniques. Where most people fall down is in understanding the timing of a deal. This is aptly illustrated in his first major personal negotiating challenge, which was to arrange a favourable exit from the bank where he was working.
Arden's advice is that the secret to making a graceful departure from your current employer is to understand the timing: there will be a perfect time to leave, and forcing your own schedule on their internal processes is likely to be very counter-productive.
This leads us naturally into the key element of negotiation: preparation. Arden believes strongly that the most important work is done well in advance. The better prepared you are, the more likely you are to secure a good deal for yourself and for the other party. Successful deal-makers always ensure a win for both sides as they are always looking for a long-term relationship with the buyer.
The hardest part of negotiation is always the price, especially if the buyer gives no clue about what they want to pay. Arden suggests having three prices always to hand. First you should always have a high-value dream price, which buyers will accept more often than you might suspect, for example if they need your products or services in a hurry or are looking to empty a budget before the end of the financial year or risk losing it for the following year.
Then you should have a target price which represents what you feel the customer should pay, based on both value for money for them and a sensible profit for you. Finally, you have a walk away price, below which you cannot go, based on hard evidence developed internally from your delivery and finance people.
In a friendly negotiation you can even share this information, and a fair buyer should appreciate your openness and respond favourably. It is important to remember that very rarely do people buy the cheapest offer; what is more important, especially in these hard times, is your providing proof of value for money and return on investment.
Arden also trains people in advanced techniques including influencing and body language, all based around asking good questions, prepared in advance. As Rudyard Kipling aptly put it, "I keep six honest serving-men; they taught me all I knew. Their names are What and Why and When, And How and Where and Who.”
Copyright ©Mike Southon 2012. All rights reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
Most salespeople will get the majority of the specification down, but some have to call back a second time to get things they forgot, or that their colleagues tell them will be needed in order to produce an accurate quotation or proposal. You can imagine the impact this has on the prospect. If you’re in a competitive market with other people pitching for the work, you’ve put yourself on the back foot before you’ve even started.
These two areas are essential areas to investigate in every sales opportunity — you need to establish early on in your sales conversation how serious they are, and how serious the project is. Even more important however is getting the “why you” bit answered. The aim here is to uncover both the buying motivation, and also what chance you have of picking up this business. Remember, the fluffier the answers to the questions you ask here, the less likely you are to win the work!
Failure to establish the decision makers involved will mean that you could go all the way through the process, and then fall at the final hurdle as someone else comes in to influence the buying decision that you weren’t aware of. Once you’ve identified the decision makers, you can then decide your approach for engaging them. You also need to identify the process they’re going through in order to make the decision. If they’re cagey about the process this time, it might be that the person you’re talking to is low-level in the organisation. In which case, simply asking about a previous process for similar projects will uncover most of what you need to know.
Asking about the other options they’re considering will usually set the platform for you to get information about other potential suppliers/vendors. It will also get you vital information about alternative competition — either them finding another way to achieve the results they want, doing it themselves in-house, or not doing it at all.
Another area you need to know about is their timescales. Most salespeople make the mistake of only finding out when the clients want to implement the project or when they need to take delivery of the product. If you only get this timescale then you’re missing out on something that’s potentially more important. Make sure you understand their buying timescales to give yourself the best understanding of how to handle the proposal and give yourself the best chance of winning it.
It’s vital in any sales opportunity, let alone a proposal situation, that you identify budget or funding as early as possible. As most decent-sized projects require money from someone’s budget, or the company to have thought about how they’re going to pay for it, failure to identify this can mean the project stalling at the last minute — when you’ve put lots of time and effort into it.
Make sure that you’ve got the budget area covered and you’ll reduce the risk of the project being put on hold, or shelved, plus it may also highlight other people involved in the buying process that you weren’t aware of.
This is the final and most important part of any sales situation, and even more vital at proposal stage. Now for those of you with a short sales cycle, you could also think of the word closing here. For those of you on longer sales cycles, usually with higher-value items or projects at stake, think about gaining commitment to the next stage and to yourself and your company. Failure to get commitment to the project and/or next stage and also to you and your company will mean that you’re likely to be disappointed when it comes to announcing who won the business and who lost it. So gain commitment to ensure you end up in the winner’s enclosure.
So, make sure you take action on the above and the best of luck with your sales!
Most sales and marketing processes work like this: the marketing department generates sales leads that are passed to a sales person; the sales person does an initial qualification, probably discarding half of them; during the sales process, further qualification may happen, either by the prospect or the sales person, and finally about one qualified lead in four gets converted into a sale.
These numbers may change depending on the business but on average, I would assume around ten leads from marketing are needed for one sale.
So what happens to the leads that have been discarded? At worst, they may have been deleted from the marketing database and now aren’t on any system at all. At best, they will remain in the marketing database but not flagged as being special.
And why should they be special? Surely they are have been qualified out or lost? In fact, failed sales could be your most valuable future leads. They are the potential rebounders — hot leads that could be easy wins if they come back.
In our business, we get a steady stream of leads — people looking at our offering. Some get qualified out early because they don’t have the budget, or don’t want our delivery model. Later on they might be lost because they have specialised requirements or simply prefer another vendor and go with them.
Six months later, however, some come back. They have decided that they now have the budget, or maybe our delivery model wasn’t so bad, or they looked for a specialised system and gave up, or the competitor they initially chose disappointed them.
Converting “fails” into customers
Even though the initial attempt at converting these leads failed, compared to the rest of the marketing database they are statistically more likely to convert than the others that we know nothing about.
Actually, these “failed” leads had decided they wanted a system like ours and had some idea of what their requirements and budget were. They fell at the last hurdle, but at least they started the race. So whatever tripped them up the first time, they might get over if they started the race again.
So, don’t throw away so-called failed sales leads. Keep them in the database and segment them into a special campaign. This may require a CRM system that integrates the sales and marketing processes together, so prospects can be moved back and forth between marketing and sales with their history intact.
However it is managed, businesses need to get those failed leads back out of the bin.
John Paterson is CEO of Really Simple Systems.
If out-selling your competitors in 2013 is your goal, then here are seven simple tips to get you started.
1. Ring-fence your existing accounts
If you want to get ahead, and stay ahead, of your competitors in 2013, the very first thing you need to do is ring-fence all your existing customers. What are your relationships like with your existing accounts? The ones you don’t get on as well with? Would they tell you if a competitor had been in? And if they did, would you retain the business at the same price, or would you have to price match to keep it?
2. Focus your prospecting
The quality of your prospecting will be one of the biggest factors in how successful you are in 2013. There will be certain specific criteria that make certain prospects more ideal for you than others. If you don’t know what they are, you need to find them out — and fast! If you’re really not sure, take a look at your existing client base. What was it that made them purchase at the moment they did?
3. Become a “valued resource”
In order to be seen as a valued resource, you have to earn it. Get updated on industry trends, technological advancements and understand the impact that these could have on your client’s business. You have to be able to hold a business conversation with the level of decision-makers you’re meeting. Invest the time to do things like this, and it will pay you back tenfold!
4. Have a plan for your attack
One of the best ways to get ahead of the competition is to win some of their customers from them! Why not map out competitors’ accounts in your territory, then create a call plan for getting in to see them, and focus on winning their business. Experience shows that focused approaches like these have a far better chance of success — and also put a big dent in your competitor’s motivation at the same time.
5. Increase your activity
Now, once you’ve targeted your prospecting, the next thing you need to do is crank up the volume. I’m a big fan of a high level of activity and the reason for this, is that the more deals you have in your pipeline, the more you can afford to lose! Purely by increasing your activity, you increase your chances of success — and therefore increase the amount of money you can earn. Who wouldn’t want to do that?
6. Keep motivated
We all know that motivation is important for a salesperson. But it’s the salesperson’s ability to be consistently motivated that will help them stand out from the rest.
7. Sharpen your sales skills
If you want to stay ahead of your competition in 2013, you’ll need to sharpen your sales skills. This means getting up-to-date, relevant sales tips and advice from trusted sources. If you get some internal training at your company, great! If your company invests in bringing an external trainer to help you improve, even better! If you’re one of those people that believes in investing in yourself (even if your company doesn’t), I take my hat off to you.
However, you don’t have to spend money to keep your sales skills updated — there are lots of free or low-cost podcasts you can listen to and plenty of seminars you can attend without spending a fortune. Just make sure you put into practice what you learn.
We were told that Monday 3rd December 2012 was Mega Monday (or Cyber Monday as others call it). Apparently, on this single day, up to £10,000 per second was being spent online.
There are always forecasts like this, and always on the first Monday of December. I’ve never seen a retrospective analysis to determine if it’s true or not, but what I do know is that once Cyber Monday (or mega Monday) has been and gone the focus of Christmas shoppers begins to move away from online and toward physical shop-based retailers.
With two peak shopping weekends to go before Christmas, retailers need to stock up, spruce up, get festive and bring in extra staff.
The next two weekends are likely to have the highest footfall (especially since few online retailers will be guaranteeing delivery by Christmas on orders placed after 15th due to the overload on couriers and postal services) so you need to be ready to make the most of it.
Here are a few top tips:
So, lots of ideas and I am sure you have plenty more too. The key is to make the most of those two big weekends when footfall should be noticeably increased. And make it a very merry, Indie, Christmas!
Clare Rayner is the author of The Retail Champion: 10 steps to retail success.
Each year, the Christmas retail floodgates open with November’s Black Friday and December’s Cyber Monday and the festive shopping season continues with sales of epic proportions. In fact, Adobe Digital’s Online Shopping Forecast for the United States and Europe estimates that the online retail sector will make approximately $2 billion on Cyber Monday alone.
But the Christmas season is not just a time for big brand advertising — smaller merchants can also make the most of the festive retail fever. Below are some practical tips for retailers of all sizes looking to profit from the Christmas shopping rush.
Finding an original gift at Christmas can be hugely challenging, especially in an online landscape crowded with big brands offering discounts on bestsellers. However price isn’t the only consideration — originality can be a huge selling point. The old adage “it’s the thought that counts” is still true today; people want to know their loved ones have thought about what they would like to receive. Data analyst group Experian predicts that Monday December 3rd 2012 will see UK consumers spend 15 million hours shopping online. And throughout the month, time spent making e-commerce purchases will reach 375 million hours. A lot of this time browsing will not result in a purchase, as people are unsure of what to buy. The success of retailers like Notonthehightstreet.com prove the value of originality and inspiration.
With a vast content universe just a few clicks away from a retailer’s online shop front, it’s easy for shoppers to get distracted as they consider their seemingly endless purchase options. 21st century shoppers like to make an informed choice, so providing them with rich content will be critical to converting sales. Merchants should consider engagement tools such as videos to demo key products for Christmas, or interactive images that let you see how an item of clothing would look as part of an outfit.
Savvy merchants should look at Christmas from a shopper’s perspective. Most of us are faced with a raft of uninspiring Christmas lists from indecisive family members each year. What do you get your Dad apart from another pair of socks, and how can you think of an original gift for a partner you have been giving birthday, Christmas and anniversary gifts to for many years? Rather than taking a product-led approach, merchants should consider taking a demographic or price-led approach and curate Christmas collections, such as “under £10” or “for the in-laws”. This way they can engage and inspire shoppers, taking some of the legwork out of the illusive present hunt.
Shoppers will be actively hunting for promotions and interesting gifts on social platforms (and not always in their free time). VoucherCodesPro.co.uk recently found that the average Brit in full time employment spends up to 1.5 hours per day on social network sites during work hours. That equates to 7.5 hours per week. The most common times for switching on to social networks at work is between 10am–11am and 3pm–4pm. Tap into festive offer hashtags in the run up to Christmas, or run Christmas-themed competitions with the chance to win a gift bundle.
Christmas is a stressful time for shoppers, but it’s a huge opportunity for a merchant to make a favourable brand impression. This should include everything from the basics of offering good customer service and speedy delivery to added extras, such as gift wrapping, personalised notes or tailored free samples. While all these things should leave customers with a warm fuzzy feeling, retailers also want to ensure shoppers come back again and again, so you could consider providing existing customers with special offers to reward their loyalty on an ongoing basis.
Throughout the year, Monday has highest conversion rate for online retail. Data from Rakuten’s Play.com reveals Brits combat the Monday blues with an evening of online retail therapy — indeed, Play.com clocks its highest browsing and buying figures from 8pm–10pm every Monday, while mobile browsing surges on Monday morning from 7am–8am. Time your Christmas communications to hit when shoppers are more likely to make a purchase, whether this is through offers, suggesting items, or even limited edition products that will only be available for a short period of time.
Make the most of the Christmas shopping rush by extending these tactics across all your channels, from your website to social, and from email marketing to mobile communications.
Happy Christmas shopping season!
Adam Stewart is marketing director at Rakuten’s Play.com.