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.
B2B Street Fighting Blog
We all negotiate something everyday, from huge, complex business deals to perhaps where to go to dinner with a group of friends, or bedtime with our child. Some of us feel much more confident than others and yet, there may be something more for all of us to learn.
Martin Luther King Jr. once said ‘… We may have come in different ships, but we’re in the same boat now.” It may seem to be a stretch at first, but this thought applies to sales relationships too. It is the idea that when people in a business relationship think of themselves as being on the same team, things start to get easier. Positive attitudes and the willingness to collaborate grow more readily.
As recently as 10 years ago, few of us made purchases via the internet.Over time, security issues and the ‘risk’ of making a purchase via the internet have been mitigated by sellers and financial institutions alike. According to the US Census Report dated 15 May 2014, the percent of e-commerce sales in 1Q 2014 has grown to 7.2% of total retail sales, that is $71.2 billion, up from 2.3% of total retail sales for the same period in 2008. The Cicso IBSG – Retail projected a 31% increase in global e-commerce growth between 2010-2015 and it seems this growth is tracking.
A salesperson can control who they call on and what they say during the call. Best practice is that every salesperson spends as much time preparing for a call as deciding on ‘who’ to call. However, according to most sales managers, very few of these calls are planned. Salespeople have a general idea of what they would like to achieve during a call. Most do not document this and many report after a call that they did not accomplish what they wanted during the call. According to Sales Effectiveness Inc. research, 64% of all sales calls are ineffective.
Surprise wins, surprise losses, surprise competitors, surprise tactics, surprise decision criteria, surprise trades. They are all bad and a waste of time! This is not ‘bah humbug’ due to the time of year. This is reality. When there are surprises like the ones mentioned above, it means that you have been caught with your guard down. In sales, this is a dangerous position to be in.
You may have heard the buzzwords ‘Sales Velocity’ recently, but what exactly is it and how can your negotiations impact it? Sales Velocity is described as how much money you are making and how quickly are you making it. More simply put, if you consider driving, driving velocity is expressed in miles per hour. Sales Velocity is expressed as money per day.
Companies often come to Think! facing a major negotiation hurdle. Oftentimes, the hurdle is based on perception: they are intimidated by negotiation, they misdiagnose power or they freeze when they encounter a tactic for which they are unprepared. The problem is that when we're unprepared, we're much more likely to give in to perception versus reality. Let's look at some of the traps that are keeping us unprepared or ill-equipped to deal with our buyers' tactics.
The first step in creating value through trading is the pre-work to understand what the ideal trading items are. It is this pre-work, in fact, that actually enhances the value that is being negotiated in a deal versus simply shifting value from one party to another. Creating value for trading is actually good for both sides.
Tiger Woods has said that he is in a quest to constantly improve and be the best – I think he made it! How does he do it? By keeping an open mind to new ideas and concepts, then applying the concepts and practicing. In Woods' case recently he needed an open mind to a new grip and a new stance. Once he had these, then he practiced, practiced, practiced. Practice builds confidence. So how does this apply to business negotiation, you ask?
Think! named to Inc. list of
America's fastest growing private companies
America's fastest growing private companies