IN THE past, successful salesmen were good “closers”. They had the skills to verbally manipulate their customer until the only option he had was to say “yes”.
Today, the customer finds the buying decision harder than ever before. This is because of:
• Information overload: He has so much information that he is struggling to process and understand it sufficiently to make a decision. He falls into “analysis paralysis” where his brain is simply unable to process any more data.
• Market globalisation: If customers are price-sensitive (and who isn’t?), they know that if they agree on a price today there is likely to be a cheaper price on offer tomorrow.
• Uncertain future: In a fast-changing, unpredictable world, will they be able to look back on this decision in the future and see it as a good one?
• Increasing stakeholders: Buying decisions nowadays need to satisfy an increasing number of stakeholders. In today’s inter-dependent organisations, one decision can impact up the line, down the line, on other divisions — even on the broader community.
These aren’t buying decisions; they are business decisions with implications for all levels of an organisation. No wonder decision-making is so hard.
This is why “closing” skills won’t work. You need negotiation skills. Neil Rackham, who wrote Spin Selling, says that in the past, negotiation was involved in less than 50 per cent of sale closes, whereas now it is required in over 90 per cent of them.
• The win-win focus means that both sides walk away believing they have extracted the maximum value for themselves out of the deal.
• The client has more “ownership” of the deal. He is more likely to accept responsibility for his buying decision (rather than blame the seller).
The study of negotiation has taught us that the more issues there are in the negotiation — and the more these issues are integrated — the more chance there is of creating the best possible mutually beneficial agreement.
This stops you from becoming “commoditised” — shopped on price alone. Customers only remember one price — the lowest one they have heard, so allowing yourself to be compared to the lowest price they have heard is a downward spiral into the red.
In a globalised market, there will always be someone with a cheaper price than you. Your price should be only part of a package customised especially for your customer.
Sometimes, value-add items can be identified that give great perceived value to the client but cost the seller next-to-nothing.
Some examples of this are:
• A company that is young and desperately wants exposure is offered a package from a large national supplier that includes a report in its glossy internal magazine (and an offer of free copies of the magazine for its publicity purposes).
• One company has a large network of clients, so every month it holds exclusive networking functions. The events have a great reputation for expanding business connections and you have to be a client to attend.
• When new clients who have had bad experiences with product reliability are still sceptical, sellers — who know their product is extremely reliable — can offer an extended warranty.
This is the best type of added value to offer your client: low cost to you (because the warranty probably won’t ever be claimed upon) yet high perceived value to the client.
In negotiated sales, you stop trying to get the customer to change his position (from “no” to “yes” or agree to a higher price) and you start looking for ways to meet his interests. This way you create maximum value in the deal for both sides.
In an increasingly competitive world, you don’t always get the sales you deserve — you get the sales you negotiate.
Article by Kevin Ryan, managing director of Training Edge Australia and author of TILT — Selling To Today’s Buyer (second edition with additional material by Looi Qin En) out now. For more information, e-mail firstname.lastname@example.org or visit www.trainingedgeasia.com