level solution. What are their goals and aspirations for their company? How can your product or services help them achieve their goal? In this episode of Sales Reinvented, Lisa McLeod shares why it’s important to focus on your counterpart’s highest-level solution—and how to do it.
If you’re planning a high-stakes negotiation, there are three things Lisa believes you need to do:
It’s easier to do this in the planning stage versus when you’re in front of your potential client.
If you’re dealing with a buyer that says “We have to get this pricing on these terms,” it’s likely what they've been told to do. You want to ask them why. What are they trying to accomplish by doing that? They’ll share what their goals are. That becomes your starting point—not pricing, terms, and conditions.
You want to start from a place of strength, which is the impact your solution is going to have on their business or life. It’s not about dominating them. It’s a shared stronger place to start. Start from a place of shared aspiration.
Salespeople need to be open to what the client says or is trying to achieve. The most successful salespeople have a laser-like focus. If you’ve ever been in a conversation with a loved one and they’re not going to concede, it exudes a certain energy. You either cave to that energy or push against it. Openness creates openness.
The other thing that makes a salesperson great at negotiation is their depth of understanding of the client. A seller that only understands their product, software, consulting services, etc., and doesn’t care about what’s happening with the client is coming from a weak position. When you understand what they’re trying to achieve and how they measure success, it doesn’t matter what you’re selling. Your understanding makes you a better ally and partner.
Lisa emphasizes that your client’s website is the #1 tool you can leverage. Why? You can read their “about me” page, read what their CEO said, etc. It allows you to learn the language of the company so you can use it. Which sounds better?
“I’m so excited to talk to you about our software, we’ve got all these bells and whistles, it’s gonna be great for you—let’s get into the negotiation.”
OR:
“I read online that your CEO says that your #1 goal is to improve your customer experience. I’m delighted that we’re having this conversation today because this software is going to play a role in helping you accomplish that.”
What are Lisa’s top three negotiation planning dos and don’ts? Why should you avoid caving on your prices? Listen to the whole episode to learn more!
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As a former procurement professional, Mike Inman can guarantee that procurement comes to the table with a plan. As a salesperson, if you don’t have a plan of your own—you’ll end up following theirs. You should know the tactics you want to use, who is going to be in the meeting, what your BATNA is, and you must set an agenda. Knowledge is power, and you have to leverage it. He shares his take on “opposition” research in this episode of Sales Reinvented!
What’s happening on your side of the table? For every deal point, you must have an open position target and bottom line. After you know what you can and can’t do, spend twice as much time on opposition research.
This can even help you determine if they’ve already decided in your favor—or not in your favor. If you find out that you’re not their preferred solution for a product or service, you can stop wasting time and cut your losses.
Lastly, get approval in advance. There’s nothing more frustrating than a salesperson that has to run things by their boss. Then you’re just an order taker. You’ll get abused. Make sure that you’re authorized to make concessions or close a deal.
Mike emphasized that LinkedIn is a person's billboard. They choose to publish where they’re from, what they’ve studied, and what’s important to them.
Mike just advised on a massive negotiation. He looked at the Director of Supply Chain’s background on LinkedIn and it was clear that he was career-focused. He moved up the ladder with every job he took. Mike knew that this gentleman needed a win to continue to advance his career.
So Mke helped them build a negotiation plan to make him look good in front of his superiors while protecting value on their side.
Conversely, if someone isn’t sharing information on LinkedIn, why are they hiding it? You can build a psychological profile from this angle as well. If they’re not freely sharing information, they’re a closed person. You’ll likely have to ask more questions in the negotiation.
Mike shares some to-the-point negotiation dos and don’ts that are spot-on:
When Mike moved to Denver, he wanted to rent for a couple of years to make sure he liked the area. They decided they wanted to move over the Summer, so they started looking in January. By February, they’d been outbid on three homes.
So he set up alerts to be notified immediately when there was a new listing. One Saturday morning, a house came on the market that looked perfect. They showed up at the open house and it was perfect.
After doing some legwork, they determined that the house was overpriced. They put in an offer $4,000 below ask with the stipulation that the sellers must accept or deny the offer by Monday at close of business. Monday at noon, they got an email that they won the house.
But there was a huge mistake. The seller accidentally sold the home to two buyers. The agent told Mike that they were “aging” and “didn’t understand technology” and made a mistake. So Mike did some more research. Turns out, the seller worked for Cisco as a Government Contracting Expert.
The agent lied to Mike. So Mike pushed back. The agent responded with their lawyer’s contact information. So what happened next? Mike unwraps a fascinating story that was only possible because he did opposition research. Listen to the episode to hear the ending!
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Joanne M Smith believes that negotiation preparation in 2023 will be more critical than ever. Why? Because change is happening. We’ve been in an easy negotiation market. She points out that we’re looking at a potential recession where pricing power is going to shift away from suppliers and into the hands of the customers. That’s why she believes salespeople need to plan for tough conversations. Learn what that looks like in this episode of Sales Reinvented!
The best economists believe that we’ll see a recession within months. When it happens, a salesperson’s job will become harder. You have to adjust your strategy to be fair in the economic conditions you find yourself in.
Make sure you have a rationale for whatever your price point is. Does your industry fairly deserve more? Are you in a position where you can increase your prices?
Your leadership must look at macroeconomics, supply and demand, and the cost of inflation, and give you crisp strategies with real talking points so you can have tough conversations.
So how do you prepare for tough conversations in a negotiation?
Ask yourself, “For this deal, what are the toughest questions that I’m likely to be asked related to my offering or to my price?” In many cases, the questions will be price-oriented. When you ask those questions, you know the data you need to prepare to craft a satisfactory response.
A salesperson needs to be comfortable with tension and willing to respectfully enter into price discussions. They have to be able to guide the customer toward a better solution they might not be aware of. If you’re going to be confident, you must prepare.
Joanne asks everyone she trains: How do you self-rate on price negotiation skills and confidence? 90% of salespeople think they’re great at sales and feel like they’re mediocre at best when it comes to price negotiation.
She emphasizes that you have to take a step back and realize that you don’t know enough and start learning. Set up some frameworks to make it easy to prepare and effectively negotiate that price.
Joanne shares some great tips to keep in mind when you’re negotiating:
Joanne was working with a global business in the construction space. They had a clear and fair reason to raise their prices over the last year. But their sales team wasn’t confident and was afraid they’d lose sales. Three different regions started training with Joanne. The European branch decided they didn’t need training. What happened?
The three regions that completed the training got their price increases with high success and little to minimal share loss. The region that didn’t complete training had a 30% share loss in their largest country. Her workshop covered negotiation preparation. They prepared by practicing responding to tough questions. It goes to show that preparation will always be key.
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It’s important to practice and train in football, basketball, or any other professional sport, right? Yet too many professionals discount the importance of practice and preparation. But if you don’t plan and prepare when you’re negotiating with a team, you’re planning and preparing for complete failure. A great negotiation is the result of great planning on both sides. Keld Jensen emphasizes that you must spend time preparing—more so than on the negotiation itself. Learn how he accomplishes this in this episode of Sales Reinvented!
Keld believes there are hundreds of steps one can take to prepare for a negotiation with a team, but names a few of the most important:
Keld uses a negotiation planner that is simply a schedule with columns. One column lists the variables that are negotiable. Then you take the starting point (i.e. a proposal) and calculate your negotiation wiggle room and the consequence(s) of using that wiggle room. Will you win or lose money? You need to come to a conclusion for every variable and the total cost or benefit.
Keld believes you should never negotiate alone. He recommends negotiation with a team of 2–3 people so nothing gets missed. It’s impossible for one person to do it all.
When Keld pushes his clients and students to work as part of a team, many of them feel uncomfortable. You have to relate to the content, the case, the counterpart, and the people on your team. That requires discipline. A negotiation team should consist of three roles:
You have to coordinate who’s doing what so you don’t unintentionally give away something you shouldn’t.
Keld was helping a Norwegian agency sell a production plan to an Italian customer. The head of the Norwegian negotiation team was the Sales Director. His team consisted of himself, the Technical Director, and the Managing Director. They’d been negotiating for hours, discussing commercial items.
Then the Italian counterpart pointed out that all of the manuals were in English and asked for them to be translated into Italian. The Technical Director jumped in and said, “We’ve already done that!”
The real cost of translating the manual was €12,000 and he just gave it away. Why did he say it? Because he was proud of it. That’s why they should’ve discussed what he was and wasn’t allowed to say. He should have said, “We can discuss how much that will cost.”
What is the most dangerous type of negotiation a salesperson can find themselves in? Listen to the whole episode to hear what it is—and what you should do when you find yourself in that negotiation.
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