The critical goal of the Consequences of No Agreement (CNA) analysis is getting a clear picture of the It that you are selling and that the customer is buying, as well as what the competitor is offering. Then on a deal-by-deal basis, find the two or three items your company has that the competitor doesn't, given the client's needs in this deal.
Here's a quick summary of the steps for completing a CNA analysis:
- Choose the most likely alternative for the customer of not reaching agreement with you. This is usually either your competitor, doing nothing, or choosing a substitute. If the customer has two to three choices, start with the most likely one.
- Completely analyze everything the customer needs to be taking into consideration when comparing you to those alternatives and create a list. It is key to adopt the mindsets of multiple players in your customer's organization: buyer, technical, finance, operations, legal, etc. (basically, employees in any cross-functional department who are impacted by this deal).
- Compare the alternative to your total value proposition and find the one or two (or, hopefully, four or five) items that will compel the customer to choose you.
- Do a quick analysis of the impact to your company if you lose this deal. I'll admit, most times it's a pretty depressing exercise, but you may find some positive impacts, like losing a low margin customer, sending a message to the market that you're playing tougher or jettisoning a high maintenance customer.
At every step, don't be shy about sharing data with your customers; present the data as a way of helping them make better, more informed decisions. We often do this by saying something like: "We know our competitor is XYZ Group. This is what we like about them and how they fit your needs on this deal, however, here are two or three key areas where they fall short and where we can help."
A thorough CNA analysis neutralizes virtually all of a buyer's attempts to commoditize and paves the way for a productive and more collaborative discussion about what is really being bought and sold. It gives you the ability to provide answers before questions are asked.
CNA analysis is an integral part of negotiation, not just a way of planning for it. When you're doing this work, you are in essence pre-negotiating, in some ways defining, if not designing, where you think this negotiation needs to begin.
Have you ever used CNA analysis? We'd love to hear about it...