Categories: Sales Negotiation
There's a point as a sales leader when you know you need to make an investment in improving your sales team’s negotiating effectiveness. They see their sales teams routinely facing these negotiating challenges:
- Negotiating on price vs. value
- Loss of leverage with very experienced buyers
- Inability to identify & manage customer tactics
- Countering aggressive competitor tactics
- Losing value in post-sale negotiations on implementation and success
- Renewal strategies driven by discounts vs. value delivered
- Managing complexity of internal negotiations
Many sales leaders contemplating these challenges instinctively consider negotiation training as the answer. Yet further consideration gives rise to the “sales training dilemma” most sales leaders know all too well, balancing the known costs and risk of sales training against the hope that the investment will lead to lasting improvement in selling effectiveness. The sales training dilemma has too often been justified by short-lived, ineffective sales training initiatives of the past.
When it comes to sales negotiation training, the costs and risks of a failed initiative are even higher. Bad negotiation training can actually damage sales productivity, produce long lasting bad deals and set customer relationships back years. Sales leaders who have stared down the sales training dilemma and achieved real and lasting ROI from sales negotiation training initiatives know that success comes down to ensuring three things… Alignment, Guidance and Relevancy.
Alignment
Negotiation is a Team Effort
In a complex B2B sales environment, it's rare for one salesperson to negotiate an entire deal without support and active participation from the rest of the organization. There are multiple functions and teams involved in negotiation alongside the sales team. Each function must have a clear understanding as to how negotiation is executed and agree upon what a great deal looks like. When you think about it, negotiation is happening almost every day and at multiple touch points when managing ongoing customer relationships. It is important that you have internal alignment with anyone who could impact the overall customer negotiation strategy (at both the overall account and individual opportunity levels). If account teams are not on the same page, an individual who doesn’t know the play could radically alter the entire negotiation strategy.
Ultimately, what is happening in these day-to-day touch points influences what gets agreed to in the larger deal. Focusing your negotiation training on more than just your sales team will drive the cross-functional alignment that makes your job and your teams' jobs easier.
Guidance
Common Understanding of What Makes a Great Deal is Surprisingly Uncommon
Given the evolving nature of organizational growth strategies and priorities, selling teams frequently find themselves unclear on what they are negotiating for in customer negotiations. Sure, items like close date, price point, volume and term are well known, but increasingly are a very narrow definition of a successful negotiation with a customer. Agreements that include strategic/new products, services, customer success, new T&C’s, access to senior executives, impact measurement, QBR participation, case studies, cross-sell and even who’s paper contracts will be written on are among the broader definition most selling organizations have of what constitutes a great deal.
Sellers frequently find themselves lacking agreed upon guidance from their own organization (cross-functionally) on what great outcomes they should be targeting to achieve in customer negotiations. In fact, many sellers report that they often get conflicting guidance from internal functions on what constitutes a great deal. Product guidance often conflicts with services guidance, that can be at odds with legal and finance guidance, that can all be nullified at the end of the quarter by leadership guidance on the need to get the deal done… no matter what! For sales negotiation training to produce real ROI, it must be delivered with agreed upon, supporting guidance on what constitutes a great deal according to the growth strategies and priorities of the selling organization.
Relevancy
It’s Got to Be Real for Everyone on the Customer Facing Team
The challenge with many negotiation training programs is that they are not based on real-life sales situations. In sales negotiation, sellers have to manage the conversation at the point of sale, in a way that protects future outcomes and conversations. Sellers need to negotiate through the moment, but they also need a strategy, process and tactical best practices that are aligned to larger account development interests. Generic negotiation approaches typically fail to account for the nuances of a sales negotiation. The right program, customized for your company, can give you the bottom-line impact that you're looking to achieve. Things like, greater margins, higher average deal size and accelerated time to close will be natural outcomes. However, there are some often undervalued outcomes that the right training program can deliver to your team. The two benefits below often fly "under-the-radar", but can bring extreme value to your team.
Empowering Greener Reps to Negotiate with Experienced Buyers
With the right sales negotiation training, tactics and tricks used by experienced buyers can easily be recognized and addressed. When old-school buyers engage their own slew of old-school, manipulative tactics to drive concessions, do your reps know what to do? When they go low, your reps need to know how to seize the opportunity in the moment to differentiate and teach the customer new ways to manage tough conversations that surface. Rather than defend against their tactics with a competitive tactical response, your reps can demonstrate the short and long-term opportunity for both sides if the conversation is changed to one focused on trading for value instead of outdated tactical responses to mandates for concessions.
Less Fire Drills Late in the Game
It's difficult to avoid the end of the quarter push, but building sales negotiation into an organizational competency will surely diminish the fire drills around sales negotiation. When you have a value negotiation process, you are negotiating from the first sales conversation throughout the final stages of the opportunity, and beyond that first signature. This process, by nature, ensures you establishing the foundation for all customer negotiations early and ensures you are getting ahead of predictable roadblocks before they slow down the deal at the end.
Remember the only way to guarantee your organization can close great deals repeatedly, is to equip your account teams with the ability to treat sales negotiation as a process, not an event. As a leader, shifting your mindset around the type of sales negotiation training you need, ensuring Alignment, Guidance and Relevancy can bring you these often-overlooked benefits and result in an overall more successful sales organization.
