Inside Our Head

Concessions are an essential negotiating tool, but use them wisely.

Consider the future impact of potential concessions. Today’s concession becomes tomorrow’s customer expectation. So don’t give away the store today or you’ll have nothing to give tomorrow.

Make sure you get a concession for every one you give. Instead of saying, "Yes, I can reduce my price by 10 percent," say, "If I can do that, would you be willing to add a third year to the agreement?" Be sure you know what concessions you want from your customer.

Occasionally, buyers skip the Fear step altogether. In fact, this is the only step of the buy-learning process that may not occur. If your customer is fearless, it's time to celebrate! Very likely you will proceed directly from the sales presentation into a negotiation of terms.

However, today most customers have more fear about buying, not less. For your customers, more technology, more change, and more choice means there's more to learn. And downsizing has forced many C-level executives to delegate buying authority to people in the Core-level to people who are closer to the problem that needs to be solved and more knowledgeable about it. But when the power to buy is delegated, those with buying authority feel greater pressure to make the right choice. As a result, many salespeople tell me it's taking more time for customers to make up their minds. This is proof that there's increased fear in buying situations.

It is natural for customers to question their decision when it comes time to put money on the table. If you are prepared for this turn of events, customer fears present you with the chance to solidify your position and show again, in another way, why your offering will be valuable.

When the customer slows down, you must do the same. You have to become a Therapist who is skilled at helping the "patient" explore and resolve the uncertainty and doubt that is causing the fear.

When doing your competitive analysis, be sure to include criteria that reflect the requirements of all decision makers on the Complex Buying Team—operational requirements of interest to users; compatibility information of interest to the Integrator; purchase price and full lifecycle costs for the ROI Authority, and so on.

In professional selling, you can lose credibility when you present a capability that the customer doesn’t need. So the simple answer at this step of the buying process is to first discuss the problems your capability solves. If the customer is unconcerned about some types of problems, you can then adjust your sales process to focus on what does matter to them. The result is that you'll deliver a solution that better matches customer needs.

Winning a complex sale is difficult. Complex sales are bigger-ticket sales, and because your competition wants them as much as you do, success takes more than simple desire and a strong will. Winning also takes skill, the ability to separate yourself from the pack and make a difference for your customer.

Complex sales are also difficult because each decision maker has his or her own buy-learning process. What you need to learn is how to help each person complete each step of the process better and faster. The sales consulting roles provide a game plan for persuading each decision maker to give you and your solution a thumbs up.

Sales coaching has two components: performance management and developmental coaching. Performance management is a quarterly one-on-one meeting where you review a rep's sales results, activity level, and evaluate their performance. Developmental coaching, on the other hand, is about developing the salesperson's competence and willingness to sell better going forward.

In short, performance management looks primarily to the past; developmental coaching looks to the future. "Good" sales coaching consists of both performance management and developmental coaching.

The problem is that with all the distractions sales managers face, the first thing to go out the window is developmental coaching. You fall back on a quarterly performance review that for many of us has become more of a creative writing exercise. We haven't observed the salesperson selling, or intervened at milestones during a sales process, so when a sales rep performs poorly we're not sure why.

If the only type of coaching we sales managers are doing is evaluative in nature, then salespeople don't think of it as coaching. They think of it as criticism.

In contrast, if you're helping your salespeople to think through what they need to do win a sale and at the same time striving to improve their selling skills - which is developmental coaching - then your salespeople will more readily accept all of your suggestions, both performance management and developmental coaching.

Any sales manager not actively engaged in developmental coaching would, in my opinion, fall into the "Low" coaching effectiveness category of the above research. For you to consider yourself a coach of "medium" effectiveness you must be engaged in developmental coaching on a regular basis.

To achieve a significant increase in sales you don't have to be a great sales coach - you just have to be a good sales coach. But to be a good sales coach you've got to spend more time developing salespeople's skill and abilities. Think back to how you spent your time last week - How much time did you devote to developmental coaching?

Preparation is important, but it’s not everything. You also need to understand how to work effectively during the heat of the moment when you are confronted with a skilled negotiator.

Specifically, you should understand the guidelines for effective negotiations and conduct your activities in accordance with them—listening for your customer’s interests, creating innovative win/win alternatives, and gaining commitment.

The negotiation will begin in earnest when your buyer presents a demand. The first demand is often an extreme one. At precisely this moment, many salespeople make a big mistake: they immediately react. As human beings, when someone pushes us, our knee-jerk response is to push back. When we push back, we react emotionally in some way. We either confront and “fight it out,” or we concede immediately in order to end the conflict. Either way, it is bad for us.

Salespeople need to change their attitude about a buyer’s initial demand. Don’t confront it, welcome it. Tom Crum, the author of The Magic of Conflict, says we need to change how we respond to confrontation. Crum uses the martial art of Aikido as a metaphor for handling conflict. The purpose of Aikido is to render an attack harmless without harming the attacker. This is the result you want from your sales negotiations.

In Aikido, you handle an attack by moving toward the source of the attack, not away from it. Think about it. A punch is relatively harmless if your face is two inches away from your attacker. Another example might be how you regain control of your car in a skid. You turn your wheels toward the skid, not away from it. You go with the energy, not against it.

When presented with an unrealistic demand in a sales negotiation, don’t dig in and fight. Instead, use indirect action, the opposite of what your buyer thinks you’ll do (and what you feel like doing). Accept their demand as a positive development.

An executive I know told me recently that a new vice president of sales had joined his firm the previous summer and launched a process to hire a new sales training firm.

The SVP’s preference was for a company he had experience working with. He and the decision-making team evaluated that firm and one other company (neither of which was mine). They went thru their Research and Comparison steps, requested in-person presentations, and then got the sales proposals.

Their first choice wanted over $2 million! Ouch! They decided to delay the purchase since they didn’t have $2 million in the budget. That delay gave me time to get back in the door.

What’s ironic about the two companies that lost out is that the sales methods they teach includes an early step of defining if the budget had been approved for this investment. Not only had the budget not been approved in this case, but the customer had no clue how much the solution would cost. And yet both sales training companies proceeded with the sales process, flying teams thousands of miles to deliver big presentations. What a waste.

Most salespeople include in their approach call a "benefit statement," which is two or three generic customer benefits that attempt to create interest so the prospect agrees to an initial appointment. But the vast majority of prospects you call are either in the Change or Discontent steps when you call them.

They may or may not be aware they have a problem, which is nowhere near having the kind of explicit need for a solution that would allow them to respond positively to your pitch.

Describing benefits is a match for customers’ state of mind much later in the buying process, in the Comparison step. In talking about benefits off the bat, you’re out of sync, steps ahead of your customer—and, unfortunately for you, buyers rarely skip steps.

The next seminar is April 14-15, 2010 in Reno, Nevada.
We only have 3 spots left!
Sign-Up for Our Sales Management Seminar Today!

If you have not signed-up, please hurry. This is an excellent seminar for Sales Managers!
View the Sales Management Seminar Agenda
View the Sales Management Seminar Details
View the Sales Management Seminar Benefits
View what Participants Say about the Sales Management Seminar

About TopLine Leadership's Sales Management Seminar
Our program combines the power of introspection, knowledge, skills and an application-driven methodology into a single, high-energy workshop. Leverage your most valuable and loyal sales resource – your sales managers – into higher sales, reduced rep turnover and increased profits.