We know that buyers will attempt to commoditize a supplier’s offering in hopes of lowering prices and shifting risk in contract terms and conditions back to the supplier. We also know, however, that establishing value results in price premiums and risk-sharing commensurate with the return the seller expects to receive from the opportunity. For that reason, when we start working with a client we ask the company’s leadership three questions:

Some very exciting news to share with you!  Think! has been named to the 2012 Inc. 500|5000 list of the fastest-growing private companies in the United States. Brian Dietmeyer, President/CEO of Think! states,

One of the many ways that a negotiation can be intentionally or unwittingly anchored is through the sales process.  For example, if in the sales process you've done a great job of anchoring on selling the total value of your company's solution to the customer, in all likelihood that's the kind of package you'll end up negotiating.  On the other hand, if in the sales process you've only called on the lowest-level purchasing agent, and she's been pushing hard for you to offer them the lowest price, price is most likely what you'll end up negotiating.  The old adage "You negotiate what you sell" is true.  The quality of the sales process does have an impact on how easy or difficult the negotiation is.

I was working with the procurement department at a major insurance company that was sourcing asset management software.  At the start of the meeting, they said, "We want a 7% price reduction on our current $12 million spend; that's our goal and strategy."

A Harvard Business School study in 2009 evaluated forty-five companies and determined that the most significant negotiation problem they faced was the internal negotiation between and competing needs of silos, that is, a lack of internal negotiation alignment.  Each silo (legal, pricing, marketing, sales, product managers) viewed the negotiation through its own lens rather than viewing it holistically.  The study found, for example, that legal departments were simply redlining contracts in an effort to reduce risk to zero without factoring in or weighing the reward, and then adjusting risk profiles accordingly.

Contrary to popular belief, buyer behavior follows certain patterns. In fact, our primary research, as well as subsequent work with our clients, shows that 97% of buyer behavior in sales/negotiation can be anticipated. And that means a company can develop strategies to deal with it.

Just got back from Amman Jordan and Kuala Lumpur Malaysia. While there I recalled a speech I heard over 15 years ago from a Swiss professor on International business. What she said was that we should focus on the similarities around the world vs. the differences. At the time, this sure seemed like counter intuitive thinking as I had always been told that doing global business was about the differences. Over the years, and this past week it occurs to me that she was right on target. Talking about selling and negotiating in any other country is slightly different versions of the same discussion in the US.

“The problem with many sales organizations is they still operate with the same principles and techniques they were using in the 60’s, 70’s and 80’s. While the technology supporting sales process have clearly evolved, the traditional sales strategies proffered by sales gurus 20 or 30 years ago have not kept pace with market needs. They are not nearly as effective as they once were, and…in most cases they are obsolete.” states Mike Myatt in “To Increase Revenue Stop Selling” (Forbes, May 1, 2012).  

When I think of a street fighter, two words come to mind:  lean and mean. I envision two lean opponents, stripped of all the trappings - the ring, the gloves, the fans and the corporate sponsors - testing their wits, wills and stamina anytime, anywhere.