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!
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.
Friday 5th October marked one year since the death of Steve Jobs, but his legacy as an entrepreneur lives on. In particular, there are important sales lessons that we can learn from Steve Jobs.
In particular I admired his ability to release new products that people didn’t even realise they needed until he released them! At which point they became must-buys for a lot of people — and that’s coming from the owner of an iPod, iPhone, Macbook Pro and iPad 2.
So what sales lessons can we learn from him?
1. Don’t be afraid of being different
Steve Jobs was never afraid to stand out from the crowd and to pursue things that other people thought were stupid. Until he did them and the people stood back and applauded. In a sales context, what aren’t you doing right now because other people think it’s stupid?
2. Love what you do
One of Steve’s favourite sayings was “love what you do”. My question to you is “do you love what you do?” The answer for most salespeople, and most people in general, is “yes, when things are going well”. I’ve always said that in my opinion, sales can be the best job in the world when things are going well…. And the worst job in the world when things are going badly! So for those of you that don’t currently love what you do, you need a more compelling reason for doing what you do.
3. Turn your TV off!
I remember Steve saying: “We think you watch television to switch your brain OFF, and work on your computer when you want to turn your brain ON”. I’ve always loved that saying. When I ask most salespeople “how much time do you spend on trying to improve your sales or your sales career against how much time do you spend watching TV?” guess which one is normally most popular? Most salespeople I meet rarely work on their sales career outside of work and even inside of work they rarely work on improving it — they just end up doing it.
4. Create a buying experience
Steve Jobs and Apple were fantastic at creating a “buying experience” every time you bought one of their products. Anyone who has bought from Apple will confirm this! Whether it’s an iPod, iPhone, iPad, iMac or anything else in their product line, if you’ve bought one you’ll know that it’s a bit different from the usual buying experience.
An Apple store experience is just that — an experience. The majority of people on the shop floor know exactly how to answer your query, or find someone who does in a minute. Does that have any impact on how many people buy more products from Apple? Of course it does!
5. Don’t fear failure
The majority of people I speak to, at some point, have to deal with failure. So therefore most people also have to deal with a fear of failure. Something that happens in advance of an event that they think will mean failure for them. So one of the things that I do when I work with an individual or sales team is to look at what failures they’re afraid of. Number one on this list is usually cold calling, or in some cases, any kind of sales calls at all! How many of you or your team are putting off calling a prospect that could be a really good source of income for you, because you feel like you’re not ready?
Selling has changed over the years although much remains as it always was. Many of the attitudes of a successful salesperson have remained consistent but to be successful, salespeople also need new types of behaviour, skill sets and knowledge.
A useful model is BASK (Behaviour, Attitude, Skills and Knowledge)— getting all four right is essential for successful selling. Attitudes tend to be constant within a person. And while we can choose our behaviours, they naturally align with attitudes. Meanwhile, both skills and knowledge can be learned.
There has been a big shift in recent times. Our customers are more discerning and knowledgeable than ever. Sometimes they may have picked up the wrong information, or only have partial knowledge but it’s our job to use our knowledge and sensitivity so the customer doesn’t feel they have it wrong.
Don’t be pushy
We know that customers go through a buying process, no matter what they are purchasing. Salespeople have to guide customers rather than “push product” at them. Our approach needs to reflect that buying process rather than solely focus on a sales process. A successful sales process is structured and yet flexible and it helps the customer through their buying process.
It’s all about finding “congruence” — the point where the offering meets the customer’s needs and aspirations and the salesperson and the buyer are agreed on a course of action. And that is when the sale is made.
Understanding the personality of the customer is a vital part of the process. Some customers may find a particular approach patronising or even annoying.
Being congruent is not about imitating the customer, but it is about making our approach more acceptable to them and engaging with them more readily. Some may call this rapport — although we believe true rapport takes longer to form — but at its simplest, it is about establishing a connection with the customer.
There is no doubt that in a web-enabled digital age, the role of a salesperson has to change. Quite simply, in most markets, prospects now have more access to choice and information than ever before. This has altered the way buyers access choice and make decisions. Simple logic would, therefore, dictate that sellers have to react and alter their own behaviour.
Below are three questions every salesperson should be asking themselves today:
1. Where do I add value?
Quite simply, salespeople used to provide value by turning up. In a world where there was limited access to information, seeing a few sales reps was an efficient way for a customer to find out what was going on in a particular marketplace. This is no longer the case. Today, customer perception is that they can find out most of the information they require online. Therefore, salespeople have to define where they provide value in a face-to-face meeting. Regurgitating information that is already widely available, is not enough. Today, salespeople need to provide “insight”. That is, a perspective and understanding of which the prospect was previously unaware. This means that salespeople now have to be real experts in their field.
2. Do I understand the context of the purchase?
In a world where the customer is empowered, they have often undertaken much of their own research before they even speak to a salesperson. This means that salespeople are often seeing prospects a lot later in the buying cycle. In this scenario, it is imperative that the salesperson understands the context in which the purchase is being made. No-one ever wakes up in the morning and decides they want a new software system, training provider or photocopier. Understanding the events that are driving the interest in the purchase is vital.
3. How do I create a sales experience?
The web has provided everyone today with a voice. If they choose, people can post comments and views on Twitter, Facebook, YouTube and others and be read by an audience of which they could only have dreamed, a few years ago. People have become empowered and more active. For example, nearly all of the biggest shows on British TV today allow the audience to decide the outcome. People no longer want to be passive recipients. Now, they want to be involved in the process. In this context, just going through a boring sales presentation will not capture the imagination of a customer. Today, salespeople need to get the customer involved in the process. In other words, they must provide an experience.
These are just some of the new paradigms that salespeople have to deal with today. It is the best salespeople who will consider these type of questions and outperform others who are still trying to make the “old models” work in a world that has moved on.
You can read more about improving your sales in our dedicated sales strategy section.