From the Buyer’s Perspective: Getting the “Best Deal”

Have you ever thought you had a agreement, then ran into a negotiating buzz saw? You probably ran into a strategic purchasing professional or someone they trained. In this economy, more and more organizations are engaging strategic purchasing professionals to:

1. help evaluate and recommend the best products and services to satisfy their needs
2. ensure their clients pay as little as possible on each purchase
3. minimize short and long term risks

Just like the sales person has incentives to hit revenue targets, strategic purchasing professionals are likely to have MBOs for cost savings with bonuses tied to them. How do they create these huge cost savings? Initially, by doing extensive research, cost benefit analysis and networking to determine which vendors they should talk with in the first place. Second, by being the best negotiator in the room. When negotiating, they leverage power where ever possible. Here are a few examples of the types of power they leverage:

• Creativity
• Vested Interest (the ability to get you to invest in them and their company)
• Legal
• Relationship
• Endurance
• Expertise

In addition to leveraging power, strategic purchasing professionals may use tactics to test their counterpart’s (the sales person’s) negotiation skills. Negotiation tactics are defined as games or tricks used to expose weaknesses within the sales person and his/her organization. For example, some of the most common tactics include:

• competition
• violins
• intimidating language or tone of voice
• foggy memory
• ultimatum
• inside information

Strategic purchasing professionals always do their homework. As a business to business salesperson you may walk away from the agreement with your commission and then you’re off to the next opportunity. The strategic purchasing professional has to live with your product for years. They never want to make a mistake.

My advise to business to business sales professionals. Take the time to become a skilled negotiator and prepare for each negotiation. The idea that anyone is a “natural negotiator” is a contradiction in terms. The skilled and prepared negotiator gets the best deals on average. Recently, a sales managers told me “I have a really good sales person, unfortunately he’s a poor negotiator. As a result of the discounts his customers get away with, he has to close twice as many deals as his colleagues.”

I recently interviewed a group of strategic purchasing professionals to get their opinion on two topics: what would they list as fatal flaws for a sales person and what’s a compelling approach a sales person can make to be more effective?

Fatal flaws included:

1. arrogance
2. poor presentations/demonstrations that aren’t tailored to the audience
3. poor follow up
4. trying to go around the strategic purchasing professional

What approach works with strategic purchasing professions? They need to believe, at the very least, they are paying no more than anyone else for your product or service. By letting the purchaser know that you need to be and are fair to the market you are serving by keeping pricing consistent for like products and service offerings you’re likely to have a smoother and productive negotiation.

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Categories: Differentiating You, Major Account Selling, Negotiation, Sales Management, Sales Skills, Tactical Selling Skills, Uncategorized

The Hostile Business to Business Sales Person

You may not want your friends to demonstrate hostile behavior, but professionals who are hostile by nature are more likely to succeed in business sales and high level leadership in the long run than those without it.

Why?

…because their hostile nature tends to fuel their fire day in and day out. So what does this mean to possess a hostile behavior trait? Here’s an example, if the hostile person were to leave their wallet at a restaurant, when they get home and realize this, their likely first thought would be, “I left my wallet at the restaurant. Someone has stole it and spent all of the money. I need to cancel my credit cards immediately.” The opposite of the hostile person in this sense is the tolerant person. If the tolerant person leaves their wallet at a restaurant, when they get home they might think something like, “I left my wallet at the restuarant. I’m sure someone turned it in for me. I’ll just call up the restaurant, ask them to hold it for me and when I swing by tomorrow to pick it up, I might make a best new friend in the process.” This may be an exaggeration, but the point is the tolerant person has a buoyant view of the world, “it’s all going to work out.” On the other hand the hostile person has a view that “the world is a nasty place. It’s a jungle out there. If I don’t get up and fight my way through it everyday, it will eat me up alive.” The hostile person is more likely to wake up each day with a fire in their belling thinking, “what do I have to do today to make something good happen.”

Harness the Hostility

Given the choice between the aggressive sales person and the passive sales person for their team of “hunters,” sales managers know they need the aggressive ones to really make things happen in opening up new territories. The sales manager knows there ’s a risk associated with the hostile sales person, but it’s well worth it if sales person can harness this trait. Matthew Dixon and Brent Adamson’s new book, The Challenger Sale, describes the most effective sales people as assertive, not aggressive, but assertive. Dixon and Adamson go on to compare the assertive and aggressive sales person in the following ways:

Assertive

• Directly pursues goals in a constructive way
• Defends own personal boundaries
• Uses direct language

Aggressive

• Pursues goals at the expense of  professionalism
• Attacks others’ personal boundaries
• Uses antagonistic language

In summary, the hostile trait tends to fuel the fire of the business sales person and high level leader, but it’s only when they transmute this behavior from aggressiveness to assertiveness that they become most effective. For those who want to become more assertive and deal better with aggressive counterparts, I suggest participating in our Effective Negotiation Skills course.

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Categories: Differentiating You, Executive Selling, Sales Management, Sales Skills, Selling in Difficult Times, Uncategorized, professional development, selling

When Buyer’s Use Negotiation Tactics

How many times have your heard a customer sing the sad song of an “erratic economy” or “unstable financial times” as a way to get deep discounts. This tactic, or negotiation trick, is known as “violins.” While some companies are experiencing very trying times, this isn’t true of all corporations. Borrowing from Charles Dickens, I’d say it’s been the best of times for some corporations and the worst of times for others. Even the companies who are experiencing the “best of times” are using “violins” to get amazing prices. These “well off” companies have told me, “just because we’re not suffering financially does’t mean we shouldn’t be able to get in on the great deals.” The best sales professionals have learned to approach the negotiation process as a game.

So, how does the effective sales person deal with buyer tactics and avoid becoming a victim? The first step is recognizing a tactic. A negotiation tactic can come in many forms and by definition is a gambit or probe used by the buyer to expose and/or weaken the sales person’s position. The important thing to remember is that negotiation tactics are not demands, they are bluffs made up by a buyer to get “unreasonable” deals from the seller.

Once you’ve recognized the tactic, the best way to deal with the tactic is to neutralize it by countering the buyer’s tactic with a seller tactic. It may seem counterintuitive to some, but it is essential that the buyer understands that the sales person is on to the buyer’s games and that the sales person can play this win/lose game too, and perhaps even better. Once the buyer believes he or she can’t beat you at this type of  ”game” you may have a chance to raise the negotiation from the win/lose level to the balanced level. The balanced level deals with real demands and is typified by “quid pro quo.”

Some of the most common tactics I see are “competition,” “hoops” and the “fritz.” And let’s not forgot the all time classic, “your price is too high.” As the name implies, “competition” is when a buyer says something like, “I may have to look and see if your competition is willing to meet my needs.”

Hoops

You might be experiencing “hoops” if a customer asks you to do a series of worthless tasks without a clear end in sight.

Although “hoops” may be one of the most frustrating tactics to get caught up in, it can also be one of the easiest tactics to counter, by asking the customer, “if I fulfill your request, do we have a deal?”

Fritz

The “fritz” tactic can be the most intimidating to experience and usually comes across as loud and abrasive language in response to something you’ve said, usually immediately after you’ve shared your price.

In summary, the first step in dealing with buyer tactics is awareness. The second step is to neutralize the buyer’s tactic by countering or exposing their tactics. For example, if a customer uses “fritz” on you, you may counter with your own “fritz” or any other tactic. Any tactic can counter a tactic.

Balanced Agreements

Warning! When you engage in win/lose negotiation, typified by either or both sides using tactics, there is always a chance your negotiation could end is lose/lose. If you are adept at countering or exposing tactics, you may be able to raise the level of negotiation to balanced or possibly win/win.

Buyer’s negotiation tactics are not demands, they are games. Tactics are designed to fool or trick you into caving and lowering your price. A customer demand, by definition, is a deal maker or deal breaker. The wise sales person can tell the difference. When a customer makes a demand, you are in prime position to make own your demand of equal or greater value. Recently, one of my clients experienced a negotiation that went like this… The seller requested 50% payment up front and 50% upon delivery of services, with payment terms of net 10 days. The buyer stated that their policy is to pay in net 30 days. In response, the seller said he could go along with the “net 30″ if the buyer allowed the seller to submit the invoice at 100% immediately. The buyer agreed. In the end, the seller was delayed the initial 1/2 payment up front, but received the full payment earlier than originally expected.

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Categories: Creating Ideal Customers, Executive Selling, Sales Management, Sales Skills, Sales Stories, Selling in Difficult Times, Tactical Selling Skills, Uncategorized, negotiation skills, professional development

How Would Peter Drucker Sell?

When I review a sales team’s questioning guide, I typically find thoughtful questions. However, the questions are often in no coherent order. Or at least no natural order that would help the customer feel comfortable and confident to open up and engage in a truly productive and insightful conversation.

My main goal with any customer conversation is to add value to the customer’s thinking and decision making while uncovering and satisfying their critical success factors. When we ask good questions, we have a much better chance of getting good answers (no guarantee, it’s still sales). Furthermore, when we ask good questions in an optimal flow, we have an even better chance of getting really good answers.

The SPIN® Selling model provides one way of organizing your questions. Personally, I prefer an approach that helps me uncover BINGO information. Uncovering BINGO Information offers a slight, but important twist to the SPIN® Selling model. Here’s a brief overview:

• Background
• Issues/Impact
• Need/Benefit
• GO for the close

I was once told that Peter Drucker (1909-2005) said every business should be asking themselves two questions. The first is “what are we doing?” and the second is “what should we be doing?” Background questions are similar to “what are we doing?” Background questions deal with the general facts, goals, vision and what is working in your customer’s world. Furthermore, background questions help you warm up the conversation and are always safe, neutral or positive in nature. Issue questions are similar to Drucker’s second question, “what should we be doing?” Issue questions are far more interesting as they help uncover the difference (or gap) between what the customer is doing today verses what the customer could be doing. However, issues alone are rarely, if ever enough to propel a customer to take action. This is why we need to follow issue questions with powerful impact question. The purpose of the impact question is to help quantify the cost of not resolving the issue.

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Categories: Creating Ideal Customers, Engaging Your Customers, Questioning Skills, Sales Management, Sales Skills, Selling Process, Tactical Selling Skills, Trust and Credibility, Uncategorized

Know When to Walk Away from the Sale

As a sales person, how hard is it to walk away from a deal?

You’ve worked hard to get as close as possible, but in your heart you know the customer is not a good fit, is unlikely to be a good referral and will probably take an inordinate amount of time along the way. The wise sales organization and sales person knows when to cut their losses and move on to better opportunities.

What steps can you take to improve you ability to better qualify and sell more efficiently? First, define your ideal customer. What do they look like? What are identifiable characteristics you can learn in advance or can quickly uncover through effective questioning. Your list may include topics like:

• culture
• current processes
• other products they use today
• geography
• industry
• competitors
• employee count
• revenue
• profit
• type of organization (i.e. public, private or government)
• types of products they sell (ie. software, hardware, professional services, etc.)
• other (i.e. they love what makes your solution unique)

After you’ve defined your ideal customer, begin to rank your customer’s on a scale of 1-10, “10″ being ideal. As a result, you’ll purposely spend more time with your ideal customers, help some customer’s become or behave more like ideal customers and minimize time with customers who drain your time, energy and resources. In the end you’ll win.

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Categories: Creating Ideal Customers, Executive Selling, Sales Management, Sales Skills, Tactical Selling Skills, Uncategorized, selling

Are You Selling Above the Line?

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Categories: Executive Selling, Major Account Selling, Sales Management, Uncategorized, negotiation skills, selling

Why negotiate?

When this question comes up, most people will answer along the lines of the following:
To get want I want.
To win.
To protect myself.

All these are legitimate reasons to negotiate. However, negotiating can be much more. In fact, it can be an opportunity for self development and an opportunity to get to know another person or organization far better. 

Negotiating can empower you to live an authentic life in mature relationship to others. Negotiation is a means to assist you to make manifest your uniqueness, your potential.

Negotiating is a lot like dancing: graceful and beautiful when skilled, painful to do and watch when unskilled.

In skilled negotiation, we respect others but do not blindly submit to the them. We respect ourselves and our positions as well.

It can be a process for uncovering and reconciling differences between ourselves and our counterparts.
It can be a mature interplay between the parties where the whole situation can result in outcomes larger than the sum of the parts. Unfortunately, all too often it devolves into an adversarial exchange of win-lose tactics, never achieving the potential of the situation. Both parties usually leave with less than they could have achieved otherwise.

To realize the potential of a negotiation, you need to be a skilled participant. You need to be prepared to engage in all three types of negotiating: win-win, balanced and win-lose. You need to be able to recognize win-lose tactics and counter them. Most importantly, you need to understand what you want, your role and how you feel when you begin the negotiation and as it proceeds.

We invite you to embark on a journey to understand both the process of negotiating and yourself better.

Welcome!

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Categories: Negotiation, negotiation skills

Uncovering Critical Success Factors

What are your favorite questions to ask prospects and customers? If you really want to help satisfy your customer’s critical success factors, what questions do you need to ask?

Tom O’Keefe, Chief Revenue Officer at ShopIgniter, and a good friend of mine likes to ask, “What does your business plan demand that you accomplish, that you didn’t accomplish last year?” Michael Gear, VP Sales for GoodData, loves to simply ask, “How our you being measured?”

I’d love to hear the questions that help you uncover your customer’s critical success factors!

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Categories: Differentiating You, Engaging Your Customers, Executive Selling, Questioning Skills, selling

Attitude, Aptitude & Skill

Attitude: Manner, disposition, feeling, or position with regard to a person or thing. Tendency or orientation, especially of the mind.

Aptitude: Capability; ability; innate or acquired capacity for something; talent. Special fitness.

Skill: The ability coming from one’s knowledge, practice and aptitude to do something well. Competent excellence in performance; dexterity.

Many of you are working to better prepare yourselves to secure a new position or replace previous employment. As you do so, remember that your potential employer is constantly asking themselves questions related to the three areas cited above as they consider candidates for their role.

They are wondering:

Does this person possess the attitude required to help me succeed in my role?

Do they have the inherent qualities that will allow them to not only contribute to my organization, but also assume initiative and leadership?

Do they possess the skills needed to execute the role successfully?

While we remain in a time when employment is dear, recall that your task in seeking a new role is to find one that is a good match for what you have to offer. Too often, we believe that we must jump at a job simply because it is available or offered. This is particularly difficult to resist when we have been without employment for some time.

It is fine to accept a role temporarily to secure financial stability. However, do not let this distract you from your true purpose in seeking new employment. That is, to identify a role that better ables you to grow your level of contribution to the organization and community you serve, and thereby, grow your personal compensation, abilities and character.

The task of your potential employer and yourself is to find a good match between the objectives of the role and the person who will hold it. So, as you work to prepare to interact with potential employers, take time, perhaps substantial time, to become conscious of the attitude you hold and communicate, the natural aptitudes, or strengths, you possess, and the areas in which you have become skilled.

There are many techniques that can help you bring these aspects of yourself to mind and prepare to communicate them to potential employers. We can consider these later. For now, the important thing is to recognize that you must understand yourself so well in these areas that you can, with confidence:

1-      Communicate them to a potential employer to help them make an informed choice among candidates; and

2-      Hold them up to what you understand about your potential new organization, role and manager to make your own choice as to whether you want this new role.

Anthony Nicoli

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Categories: Differentiating You, career development, professional development, professional growth

Opportunity Strategy Sheet

Over the last year, we updated our Opportunity Strategy Sheet to make it easier to share and collaborate on key sales opportunities with your colleagues and partners regardless of the CRM system you use today. The firm that helped us is called Appligent Document Solutions and Jeanne Petty was the consultant who helped us directly. We are very pleased with the results and I think Appligent was proud of their work too. Appligent’s CEO, Duff Johnson, recently wrote up a case study regarding our experience working together and posted it on his blog. Hope you enjoy it and look forward to your questions and comments.
Best,
Scott

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Categories: Uncategorized

The Olsen Group Blog

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