The Bottom Line: Redefining Negotiation November 27, 2007 Keep your sales team from getting eaten alive
By Dave Stein
Any sales manager will tell you that negotiation is one of the required skills for success in sales. Yet few salespeople are equipped to go one-on-one with the increasingly experienced and tough corporate buyers and purchasing officers with whom they must negotiate in order to make a sale.
Even some companies that provide guidance for pursuing the most complex sales opportunities not only leave money on the table, but allow the perceived value of their brand to be whittled away during negotiations.
The Strategic Account Management Association and Think! Inc. recently completed a study that benchmarked the current state of negotiation against other professional skills and practices in the selling and account management disciplines. Look at this statistic: Eighty-three percent of the 361 respondents reported that they have no negotiation strategy, or merely an implied one.
Within the companies surveyed there were considerable discrepancies in how negotiation was seen. Executives were 77% more likely to view their decision-making authority as highly centralized, whereas salespeople were 71% more likely to view it as somewhat or highly decentralized.
Brian Dietmeyer, CEO of Think! Inc., says that many companies have little agreement cross-functionally on what a successful negotiation should look like. Only when organizational silos are broken down and stakeholders are aligned around desired outcomes—margin protection, mitigation of legal risk and top-line revenue, to list three examples—can a solid foundation for successful negotiation be built.
The study also showed that of the 50% of respondents who attended traditional negotiation skills training, only 6.8% rated themselves as highly effective negotiators. Tactical negotiation training alone doesn't get the job done in today's highly competitive selling environment.
Think! Inc.'s approach integrates negotiation with a company's sales process so it is managed strategically, starting at the discovery phase of the sales cycle. Integration of negotiation into the sales process has other benefits as well, including knowing what is important to the customer and what isn't, so that trading can be leveraged. The study revealed that 79% of respondents said they effectively trade for customer demands only occasionally, or not at all. In most cases, they just give value away. Dietmeyer says that when negotiation is integrated with an effective selling methodology, there is no longer any reason for a salesperson to get rocked back on their heels when a purchasing executive says their competition is offering what they are—at 20 percent less.
Going head-to-head against professional negotiators isn't easy. If that is part of a salesperson's job, then it is our responsibility to provide them with a proven and effective approach.
Sales & Marketing Management Magazine
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