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Strategic Negotiation

Any sales manager will tell you that negotiation is one of the required skills for success in sales. Yet few salespeople are equipped to go one-on-one with the increasingly experienced and tough corporate buyers and procurement managers whom they must negotiate with in order to make a sale.  For years I saw negotiation as a set of soft, tactical skills-verbal sparring, if you will-rather than the business process that it should be. Evidently I wasn’t alone. Earlier this year, SAMA (the Strategic Account Management Association) and Think! Inc., a consultancy specializing in strategic negotiation processes, recently completed a study that benchmarked the current state of negotiation against other professional skills and practices in the selling and account management disciplines.

Look at these statistics:

Eighty-three percent of the 361 respondents reported that they have no negotiation strategy, or merely an implied one. That is the likely cause behind the 80 percent of the respondents that said they see mounting irrational competitive behavior, such as drastic, last-minute lowering of prices or the giving away of free services.

Within the companies surveyed there were considerable discrepancies in how negotiation was seen. Executives were 77 percent more likely to view their decision-making authority as highly centralized, while sales people were 71 percent more likely to view it as somewhat or highly decentralized. Sales people and their corporate executives are clearly not reading from the same sheet of paper on this issue.

Brian Dietmeyer (podcast), CEO of Think! Inc., says that many companies have little agreement cross-functionally on what a successful negotiation should look like. Only when organizational silos are broken down and stakeholders are aligned around desired outcomes-margin protection, mitigation of legal risk, top line revenue, as examples-can a solid foundation for successful negotiation be built.

The study also showed that of the 50% of the respondents that attended traditional negotiation skills training, only 6.8 percent rated themselves as highly effective negotiators. Tactical negotiation training alone doesn’t get the job done in today’s highly competitive selling environment. If sales people don’t know what outcomes they are negotiating to, the companies for which they work won’t achieve their objectives.

Think! Inc’s approach integrates negotiation with a company’s sales process so that negotiation is managed strategically starting at the discovery phase of the sales cycle. Integration of negotiation into the sales process has other benefits as well, including knowing what is important to the customer and what isn’t so that trading can be leveraged. The study revealed that 79 percent of respondents said occasionally or do not effectively trade for customer demands. In most cases, they just give value away. Dietmeyer says that when negotiation is integrated with an effective selling methodology, there is no longer any reason for a sales person to get rocked back on their heels when a purchasing executive says their competition is offering what they are-at 20 percent less.

Going head-to-head against professional negotiators isn’t easy. If that is part of a sales person’s job, then it is our responsibility to provide them with a proven and effective approach and the associated training for them to be successful.

Regarding this redefinition of negotiation… Count me as one of the converted.

By the way, Brian emailed me a link for a new piece about negotiating myths.  It’s really worth reading.

Sales Training Companies from a Unique Perspective (Part 2)

Before I go any further, let me again state that there are a lot of effective, high value, ethical sales training companies out there.  They have long lists of customers who have managed to dramatically improve their teams’ sales performance.

StealingSales Training IP Thief!

Let me dig a bit into a point I made in Part 1—the fact that some sales training companies steal content from their competitors.

At a SAMA conference a while back I sat in disbelief during a vendor presentation.  Nearly every slide was duplicated, verbatim, from another vendor whose content I was very familiar with.  What made matters worse is the presenter used the same anecdotes and examples to make his point as the founder of the other company from whom the content was pirated.  I know where it originated, since I had heard the founder of that other company use those same anecdotes and examples at least 10 years before.

What impact does this have on the sales training industry?  It can’t be good.  The content pirates could be little more than parrots—lip synching someone else’s ideas, strategies and approaches, without providing the process framework, tools and educational design for real learning.  Or, the most innovative vendors might decide that they don’t want to compete on innovation any longer.  That wouldn’t be good either.

What Versus How

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