January 2012 |  Volume 11 Number 1 UPCOMING EVENTS: WEBINARS Account Management with the ValueSelling Framework® North America February 2, 2012 9:00 AM PST 2012 STEVIE AWARDS GET A FREE BOOK Tell us your story! Do you have a great story to tell about your success with the ValueSelling Framework®? Your story might be featured in our next book, published in early 2012; and whether or not we use your story, you will receive a free signed copy! Tell us your story here. New ValueSelling Book Published Early 2012 Julie Thomas GO MOBILE! If you've already completed your ValueSelling training, reinforce your understanding of the ValueSelling Framework® concepts with our flashcard app. Now available in iPhone, BlackBerry and Android. Successful Negotiation: Communication, Not Confrontation How many times have we as sales professionals gone into a negotiation believing someone – the procurement officer, perhaps – has more power to influence the outcome? And how often do we then instinctive yield to that person because of those assumptions? The truth is perception can become reality and, in turn, get in the way of our own success. When done properly, negotiating can be advantageous rather than adversarial. And when done well, this critical part of the sales process can strengthen the customers’ experience and lead to long-term relationships. The process of negotiation involves a mutual discussion and arrangement and ultimately agreement of the terms, deliverables and cost of a business transaction, contract or relationship. One key to a successful negotiation is timing. It is critical to know when to negotiate. The negotiation process should start only after you have “sold” your product. That means that the sales person must confirm that the buyer is convinced that your product or service can address a critical business issue with enough impact or value to justify the decision. The second key to a successful negotiation is to leverage the knowledge you have gained during the sales process. This knowledge is key to determining what your prospect will define as a winning outcome and how you can help them satisfy those requirements. Without that knowledge, you are guessing at best. Once the client is, in essence, sold – it is time to get to the details regarding the exact deliverables, terms and investment required. Successful negotiation is multifaceted and not simply focused on one area such as price. With an understanding of the needs and requirements of each of those categories, sales people can effectively begin to develop a strategy to arrive at a winning outcome for both parties. There are three basic tactics to consider in developing this strategy. Tactic #1 – Trade-offs Trade-offs should be used as your primary strategy. A trade-off is the process of exchanging one item for another of equal value. As you consider the areas that we are negotiating -- price, terms and deliverables – you may be able to trade an item from one category for another. How will you know what things to trade-off? First, you must know what is important to the customer. Then, you must know what options you can offer. This information comes during the sales process. It also comes from your manager and company policies and practices. You should trade-off those things that meet the customer's needs and that differ from your proposal. You should also get something of equal value in return if the negotiation is to remain “balanced”. Examples of trade-offs include: More favorable payment terms for a reduced price Additional terms, such as reference account, for a better payment term A reduction in deliverables for a reduction in price Tactic #2 – Embellishments Trade-offs cannot be used if you are unwilling or unable to meet a specific customer want. In these situations, an embellishment may make sense. An embellishment allows you to "sweeten the deal" for the customer by offering something additional to the initial proposal that makes it more acceptable while maintaining the range of the original balance. For instance, you may throw in deliverables that have little cost to you but are of a large value to the prospect. An example of how this might sound in the conversation is: “If I am able to offer an additional training seat for this software package, would you be willing to commit to the full number of user licenses?” Tactic #3 - Compromise A compromise can be used when a trade-off cannot be made and both parties have to "give up a little" on an aspect of the proposal in which the customer has the need. It involves finding the middle ground in the same category. Splitting the difference on price, payment terms, or a specific deliverable could be examples. In my own experience, I once had a large multinational client whose standard payment terms were 75 days. Ours was due upon receipt. Through compromise, we were able to bring that gap down to 45 days – which ultimately was agreed to by both parties. Approach negotiating as problem-solving and you’ll be better prepared to respond instead of react and keep the conversation focused on the issue instead of specific styles. A few other points to remember when negotiating with prospects include to: Understand the “need” behind your prospect’s position – with that understanding you may be able to propose a creative solution to their need that hasn’t yet been discussed Know your empowerment level to avoid losing credibility (and perhaps the deal) by committing to things that are outside of your span of control Maintain a high level of rapport every step of the way Know your “walk-away” position and identify any show stoppers in the negotiation early in the process Some people believe that in order for one party to win, the other must lose. But there’s a way to reach a win-win situation in which everyone experiences a positive outcome. These strategies and tactics will go a long way in our preparation, strategy and willingness to become a more effective negotiator. After all, our goal is not only win this particular deal, but to gain a customer for life! To learn more about how to negotiate to win, take advantage of the ValueSelling Essentials Negotiating course. Visit our website or click here www.valueselling.com Julie Thomas President and CEO of ValueSelling Associates, is a noted speaker, author and consultant. In a career spanning more than 24 years, she credits her mastery of the ValueSelling Framework® for her own meteoric rise through the ranks of sales, sales management and corporate leadership positions. ValueSelling Associates, based in Rancho Santa Fe, CA, is the creator of the Value Selling Framework®, the sales methodology preferred by sales executives around the globe. Since 1991, ValueSelling Associates has helped thousands of sales professionals increase their sales productivity. Offering customized training to FORTUNE 1000 companies, mid-sized businesses, to early stage startup organizations, ValueSelling Associates' proprietary sales training tools and consulting services deliver measurable results. Clients turn to the experts at ValueSelling Associates for classroom and online training and consulting services that yield immediate impact, repeatable strategies, and sustainable results. Visit www.valueselling.com. Copyright ©2012 ValueSelling Associates, LLC, All rights reserved. For more information, contact info@valueselling.com