When it comes to negotiation most companies forge ahead without agreement on where they want to go or how they'll get there. Subsequently, they have little clue on where they will ultimately end up. "We are not on the same page many times within the organization," admits a survey respondent. "We don't allow sales to have the parameters to negotiate. We have to go to the next level to get approval."
That person has plenty of company. 83% of survey respondents say they have no negotiation strategy or merely an implied one. Almost the same number, 81%, report a moderate, high or extremely high level of internal negotiation. More than half report there is not a high level of collaboration between sales and other cross-functional departments.
In contrast, companies are three times more likely to have a sales strategy than a negotiation strategy. Is it any wonder, then, our survey received written responses like this: "We are unable to leverage enterprise-wide solutions for our customers. We are not empowered to make these decisions on behalf of the individual business units, we have to gain their buy-in, which is time consuming."
Here's what's happening: Sales professionals wield sales strategy and process to bring solutions and total value proposition to a prospect, but when it's time to approach the negotiation table, suppliers must retreat to make sure their solution will appease the separate silos, and the separate profit-and-loss statements, within their organization. It's kind of like landing the pole position in the Monaco Grand Prix with a 1976 Trans Am. Sure, you are well-positioned, but you're not equipped to cross the finish line.
This response reflects that reality: "There is a disconnect between sales process and actual negotiation process, limiting the ability to effectively negotiate. Boundaries for sales professionals could be better established ... to make the process more efficient."
And, more effective! Sales process drives revenue, but negotiation will either detract from or enhance the margin created during the sales campaign. Without internal, cross-functional alignment on negotiation strategy, there are no plans for margin protection or goals for margin growth. Sales process loses its bite without negotiation strategy.
To read more, request the Strategic Account Management Association (SAMA) Velolicty article entitled "Wake up to negotiation reality: Transform your negotiations and avoid commoditization."