The Key to Good Sales Negotiation is to Eliminate the Causes of Bad Ones

by c.j. Ng

Probably the most often heard objection from customers centres around the issue on price.

In my Nov 2007 issue, I mentioned that (apart from habitual bargaining) the main reason customers want to hack down the price is that they don't see how the value you provide justifies the (high) price they are paying.

        However, justifying and educating customers on the value of your offering to be worth more than the price you are charging is just part of the answer to good sales negotiation. If you want to emerge as a winner in the selling game, you'd also have to eliminate the causes of bad negotiation too.

Are You Doing Enough Prospecting?

         While most sales training materials will focus on objection handling techniques when it comes to handling price objections, it does not address the fundamental issues of negotiations. When negotiating, you may want to know what is your Best Alternative to a Negotiated Agreement (BATNA), which in simple English, what will happen if you don't accept the negotiation outcome placed on the table.

         To sales people, the options are:

Close a deal, but at smaller profits and smaller commissions;
Close a deal at no profits and no commissions, but still able to achieve sales quotas
Close a deal at a loss, but will make it up on the next deal, so that there will be profits for the account in aggregate

        As you can see, this is a slippery slope for sales people who may just bend over backwards and give anything away just to make the sale. Now, what will be the root cause of such behaviour in sales people?

         It is NOT because they have high sales targets to achieve, or that the sales person does not know how to apply objection handling techniques. The reason is that the sales person is not prospecting enough, and does not have enough prospects in the pipeline.

         In the Nov 2007 issue, I mentioned that customers buy because "the pain of not buying is greater than the pain of giving the money to the sales person and buy". Similarly, sales people are unable to stand up against price pressures can also be largely due to the pain of not closing and losing the business is greater than the pain of sustaining losses in order to close the deal.

         And what causes the sales person to feel a greater pain to lose a business? Burgeoning sales targets may be the reason, but a bigger reason is that there aren't many leads in the pipeline to follow through, and hence the need to "close something, anything" will be greater than the need to deliver profits.

         In fact in most companies, sales people may be fired immediately if sales targets are not reached, but may only be reprimanded if the sales generated are loss-making ones. Strange, but true.

Are You Prospecting for the Right Kinds of Customers?

         While some sales people may be masters in the art of handling objections, no amount of objections handling expertise can save the deal if the customer wants nothing but lower prices.

         While it is true that most customers are cost conscious, they too will have to accept that there are differences between the price of a product vs. the cost of purchasing. However, there are also customers that refuse to make distinctions in either, and will just buy the cheapest priced offer.

         If most of your customers in your pipeline belong to this category, then you'd probably need to do better qualifying and filtering in your prospecting process. This is not to say we will find customers who will buy our products and services at any prices we dictate. I believe we aren't naive enough to wish for that.

         What we need to look for are prospects who are at least willing to listen to us, just as we are willing to listen to them. This means that more work is required when prospecting for new customers.

         Unfortunately, most sales people love to interact with customers, but simply HATE to prospect. Hence, the sales team who can make the discipline to prospect more, and prospect better, is going beat their competitors hands down.

Eliminating the Causes of Bad Sales Negotiation

        While there are many other causes of bad sales negotiation, and how you start your sales process may just determine what you get in the end.

In addition to poor prospecting, the causes of bad negotiation include:

Poor questioning techniques that upset customers;
Not knowing what customers want;
Not knowing your customers' BATNA;
Poor understanding of the values that customers want (and need) from you;
Poor articulation of what you can do for your customer;
Following through with customers with low influence on the decision making;
Not know what each influencer in the buying process wants to get out of the deal; etc.

The list goes on, but it starts with the beginning, that is have you got enough qualified prospects in your pipeline?

If you would like to find out how you can prospect better and eliminate other causes of bad sales negotiations, simply e-mail info@psycheselling.com or call +86-13671902505 or Skype: cydj001 and arrange to buy me coffee. All information shall be kept in confidence

If you think you need help, with handling harassing customers in ways that it won't hurt your sales targets, just e-mail info@psycheselling.com and I'll help whenever I can.

Unfortunately, the cab driver's response was he didn't see anything.

By then, the traveler had given up hopes of retrieval. Undaunted, the front office staff rang the taxi station again and see if the boot can be opened and checked when the current driver changed shifts. The taxi station staff agreed to do so.

Hours later, after hearing no reply from the taxi station, the front office staff called again. The taxi company staff replied that the shift had been changed, and no one in the company checked the boot, since everyone was "just so busy".

Undaunted still, the front office staff got hold of the new driver's mobile number, and contacted him. This new driver did see the luggage in the boot, but was unwilling to send the luggage to the hotel as he needed to make his rounds. He asked the front office staff to meet him at the taxi station when his shift was over.

The front office staff then hired a taxi to the station at the agreed upon time. By then, her own shift was over, and she was trying to retrieve the luggage outside of her working hours. When she finally hooked up with the taxi driver, the driver asked for some rewards for handling the "lost and found" luggage. Fortunately, the front office staff had come prepared with a carton of "Zhong Hua" brand (the most coverted brand with the Chinese) cigarettes.

When the luggage was finally delivered, late at night, to the hands of the traveler, he had long given up hope of seeing it again. Till this date, however, he still hadn't know the trouble it took the front office staff to get the luggage back.

China may have its fair share of customer service nightmares, and fortunately, the service provided by cab drivers here are improving, though with a lot of room for more improvement. However, if you are looking for service staff that really go for the extra mile and beyond for customers, you'll be glad that such service exists, especially at the Holiday Inn (Zhengzhou) where this story took place.

As you might have heard of them, the most common challenges faced by sales people in any country, and across nearly every industry, are as follow:

Having these concerns in mind, the Psyche-Selling ^TM is created as a result of 1-to-1 coaching with sales people from a variety of industries across 13 cities in Asia.

Psyche-Selling ^TM is currently a co-affiliate of the HR Chally Group, together with Shi Bisset & Associates, to help you identify gaps in your current sales force, and then formulate ways to help you get better results.

The HR Chally Group is a talent management, leadership development, and sales improvement corporation providing personnel assessment and research services for over 33 years. Chally is recognised as an international technology leader in scientific assessment and prediction for selection, job alignment and leadership development, and for management assessment. For more information about implementing Total Quality Sales Management in your company, pls. log on to http://www.psycheselling.com/TQSM-ExecBrief_email.pdf to get more insights.