Once upon a time there was a negotiating marketplace where the sellers were comprised of huge multinational companies. These sellers were distributed throughout 25 industries. All the sellers had massive sales forces, many of which were the cream of the crop, from national and global account managers to the leadership. These salespeople and their leaders focused on the largest and most profitable customers for their companies. 

The connection between the sales function and corporate strategy is tenuous in many B2B companies. Even when given clear direction of their company's revenue, margin, and expense targets, Sales is mostly on their own to determine how they will go about achieving those targets while satisfying the needs of other cross-functional stakeholders in the organization. Departments whose objectives are impacted by Sales behavior implement siloed processes to protect their priorities, often frustrating the sales organization and doing nothing to enhance deal making or the customer experience.  And these gaps between sales and marketing, and other functional areas, too, are taken for granted in many industries.

At the risk of oversimplifying the relationship between selling and negotiating, the former is about meeting the customer’s stated needs while the latter is about capturing the value in a deal that benefits both sides. In other words, they go hand-in-hand, or at least they should. For example, even if a salesperson does a great job selling, that is, creating value, without a sound negotiation strategy it’s unlikely that full value will be captured, and the salesperson will probably end up with a deal that rewards him or her with less value than the customer receives. Alternatively when a salesperson does a poor job selling, even if he or she is fortunate enough to have a negotiation, it will almost always default to a price only discussion.

Unfortunately, even among those organizations that provide salespeople with training in both sales and negotiations, more often than not sales training is offered in one fiscal year and negotiation training in the next, so they appear to be separate and seemingly unrelated activities. As a result, the training fails to address the interconnection between the two processes. In effect, training salespeople in this manner is the same as training a carpenter to use a hammer one year and a saw the next. The salesperson (or the carpenter) would essentially be out in the market for a year with only one half of his or her toolbox. And to make matters worse, the supplier who provides the sales process training is usually different from the supplier who provides the negotiation training. So the sales team now has two disconnected processes designed to fill out two different kinds of blank forms. This is not only difficult for salespeople to deal with given their daily challenges, it’s also difficult for coaches to coach to, or for management to embed into the customer relationship management process.

Sometimes your company's approach to or attitude about business negotiation actually works against you at the negotiating table.

Am I the only one who is mystified by this? There are three days left to go in an auction on ebay…3 people have been outbidding one another for the last two days in an attempt to "win." The only one winning is the seller as the price goes up and up. Is there any reason why we wouldn't wait until 5 minutes, or as I do, 1 minute left to go in the auction? There is a zero percent chance someone will "win" bidding one, two or three days in advance, yet that whole model is predicated on people acting irrationally.

If you think this doesn't happen in B2B negotiations, have you ever been part of a reverse auction or watched competitive bidding drive down pricing and give away free service until there is no margin left in the deal for the "winner?"

Despite the abundance of consulting, investments, training methodologies, and hype that focus on value - mining value, value statements, value selling, etc., - most of today's "tried and true" approaches fall short of helping B2B companies achieve a high level of competence at leveraging differentiated value for price premiums and risk reductions.  This is not surprising for two reasons:

If we know where and what most of the traps are in business negotiation, and we know they are fear driven, why do we keep reacting in the same way?  There are two key tactics used by 97% of buyers - mention an alternative and leverage it to start the bargaining.  This then creates three key problems:  commoditiztion pressure, price pressure and selling "value" and then falling back to negotiating price.  Value is a word we hear a lot these days.  It's supposed to denote something worthwhile, significant, tangible and durable.

As we report often, detailed and objective analysis of each side’s alternative to reaching agreement (what we call CNA or Consequences of No Agreement) is the central point of business negotiation planning. Regardless of our feelings about whether management or labor did the right thing here, we can learn a lot from their respective negotiation strategies. 

There are essentially only two kinds of impasses in business negotiations.  The first, the emotional impasse, occurs when a deal is on the table that's better than both sides' Consequences of No Agreement (CNA), but they still don't come to an agreement.  Situations like this are usually the result of one or both sides misdiagnosing their CNA.  The best way to deal with this is to go back and evaluate the CNAs again, validate them again, diplomatically educate the other side about them, and re-present the offer.

I imagine you've heard the old 80/20 rule to guide your listening and speaking, respectively.  This couldn't be more important in a validation meeting, where the primary purpose of meeting is to gain information.  The fact that most customers don't even see sharing information as part of the negotiation actually works to your benefit because, as a result, they're likely to share more freely.  Ultimately, of course, it's trading information that enables you to learn more about what your customer wants and to let him or her know better what you want.  And that, in turn, is what enables you to format offers later that create real value.