A sales executive’s guide to: Spotting an opportunity to improve performance quickly
The ability of a sales executive to differentiate between whether the organization has a selling problem or a negotiating problem can mean the difference between delivering the performance expected or not.
The truth is that a skilled negotiator (with the emphasis on “skilled”) will produce a good deal where a skilled sales person may not. And a skilled negotiator will do it without damaging the relationship. Negotiating skills are not “super” selling skills; there is a difference between the two that creates more ability to close good business. Negotiating skill is next lever to pull when the current approach isn’t working. Having skilled negotiators in your organization will improve performance measurably. For example, we know that the investment made in our workshop will produce a ten-times ROI in the first 90 days as a start. One client improved margins from 9% to 29%.
To diagnose whether or not your organization needs to improve their negotiating performance, look for some of the signs and symptoms:
SIGNS AND SYMPTOMS:
- Our salespeople don’t get enough back for what we give away to our customers. In some instances, our customers have come to expect that we give things away to
them without getting any real value in return and we’re setting bad precedents in the marketplace.
- When our salespeople get resistance from the customer, they attempt to persuade the customer. If their ability to persuade fails, they react by lowering the price.
- Customers for whom we are “bending over backwards” to please, and meeting their demands, are becoming even more demanding and more difficult instead of showing their appreciation for what we have done.
- As a manager or executive, I am asked more frequently than I would like to become involved in a negotiation, or I feel like I need to be involved in the negotiations. This takes up more time than I would like devote because I have other competing priorities.
- When we run into trouble and the salesperson wants to give in to the customer, the excuses are either: 1) our “value proposition” isn’t strong enough, or 2) the
customer is only focused on price, 3) a “difficult” personality on the other side that we need to “keep happy” and maintain a “good relationship”.
- Generally, our salespeople believe that they have little power and so their actions and recommendations reflect their belief.
- We don’t get access to the right influencers and stakeholders.
- Our negotiations take a too long to conclude which lengthens the sales cycle.
- Generally, the strategy that our salespeople take is focused on skillfully convincing the other side, perhaps with needs-based selling technique, and being prepared to
address objections and defend the company’s position.
- We have a lot of salespeople that rely too heavily on “relationship selling”.
- It’s possible that our salespeople could do deals that were at least 5% more favorable to us and that would make a significant difference to our performance.
- Our salespeople tell us that it would help if the negotiating training that they receive was more realistic to their real world.
If any of the above statements are true in your organization, you have some need to improve negotiating performance. If more than one is true, the need is likely hindering your organization’s performance.
There are also systemic signs and symptoms that indicate that the organization needs to better understand how to support its negotiators. Here are some questions to ask:
- Is there a common understanding across the organization of what effective preparation looks like and what deliverable it produces? Or is it common
to hear, “everyone has their own way of doing things”. If it’s the latter, then it’s very difficult to manage the quality of preparation across the organization or
to be able to quickly review any particular preparation and discuss prior to the meeting. Management must “hope” that salespeople are preparing effectively. And, of course, they usually aren’t.
- Are salespeople not using preparation tools or methods because it takes too long?
- Do the salespeople have approved list of “tradables” that they can use to negotiate with the customer? Does it have at least thirty items on it? Are they using them?
- Are salespeople acquiring valued business objectives in exchange for any concessions they make?
- Are the salespeople confident of where the walk-away positions are for each issue that they may have to negotiate?
- Have all the internal parties involved in negotiating a customer contract and/or approving any proposals or contracts been trained in the same negotiating methodology? Does everyone speak the same negotiating language?
- Has the senior executive in Sales and his or her staff received the appropriate levels of training to support salespeople; is there an internal infrastructure (expert system) built around the negotiating process that’s designed to cause good negotiating behaviors and decisions throughout the entire organization? Does the
system allow negotiation to be managed at the corporate level? Does the system provide for the whole organization to learn and benefit when any one individual learns from experience?
- Do managers understand how to coach the skill and support the salesperson in front line negotiations?
- Has negotiating excellence been identified as a core competency for salespeople?
Skilled negotiating performance can mean the difference between exceeding goals and not meeting them; strong negotiating performances also help salespeople demonstrate that they make a real difference for the company in difficult times; that builds job satisfaction, morale and excitement in the group. Having a common approach builds a sense of team and can be used to leverage talent across the team. When the approach is driving results, it builds commitment to the leader. For example,
one of our clients recently improved their profit margin from 4% to 19% in less than 12 months by applying our approach. The VP who diagnosed the problem and
provided the right support is now a company hero. She changed how business is done by the sales organization and has recently been promoted to EVP – Operations. So, if any of the signs or symptoms outlined above are there, providing the support necessary for salespeople to be effective negotiators is the right place to focus resources for fast performance improvement.
Mike Milich is Partner at Swift L.L.C. and can be reached at +1 913.851.4327, or, firstname.lastname@example.org