negotiations

5 Ways Negotiation Training is the Source of Enduring, Powerful Revenue Streams

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Way #1: Negotiation training helps you identify what matters most to win better deals

Victoria Pynchon, Negotiation Consultant, She Negotiates, says that trained negotiators begin with small talk which builds trusts and turns the conversation to their negotiation partner’s goals, preferences, desires, needs, fears, priorities, risk aversion, and attitudes toward the future. It also uncovers hidden constraints and unknown stakeholders.

“Trained negotiators know how to ask open-ended, diagnostic questions,” she says.

Way #2: Negotiation training increases the likelihood everyone wins

“Negotiation is about finding the win-win,” says Koka Sexton, Global Industry Principal, Social Selling, Hootsuite.

He believes that sales professionals will position themselves better when “they can articulate the natural give and take of a deal” and understand what the buyer is really interested in.

“Negotiation training is probably one of the most important sales skills besides making initial contact with the buyer,” says Koka.

Click here to access the full list and to learn more about SPASigma.

 

SPA Events

Click here for SPA event info including our next Battle for Margin and our upcoming webcasts.

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10 Buyer Negotiation Tactics to Lower Price Points

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Negotiation is a dance. To have it go smoothly, you must be ultra-attentive to your own actions and the actions of your partner. Even the slightest, unexpected move can create a better – or worse – outcome. That’s why we’ve built negotiation tactics around the smartest actions. Here are 10:

1. Anchor them. State your very best price. When you establish your price point, you influence expectation. We tend to expect the first position we hear.

2. Throw junk. Point out negatives about whatever it is they’re trying to sell. You want to make your negotiation partner questions his or her price point.  Before beginning negotiations, collect junk by asking internal stakeholders about their overall satisfaction with the vendor. Did they deliver on time? Was their customer service acceptable? Did they honor the fine print?

3. Woo them. With every bit of junk you throw, be sure to give them a positive statement, such as “We really want to make this work,” or “We really want to do business with you.”

You want to minimize conflict and open the party up to new ideas like a lower price.

Click here to access the full list and to learn more about SPASigma’s negotiation training.

 

SPA Events

Click here for upcoming SPA event dates such as our next Battle for Margin June 8-9 in Las Vegas, NV and dates/times for our upcoming webcasts.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

 

8 Critical Negotiation Insights You’ll Get at Battle for Margin

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You owe it to yourself and your team to attend a SPASIGMA Battle for Margin negotiation intensive training seminar. These are two-day deep-dives into proven deal-winning strategies you’ll find nowhere else.

The following are just a few of the critical negotiation insights that are shared at Battle for Margin:

  1. Surprising negotiation planning strategies that sharpen the competitive edge
  2. When and how to clarify the financial impact of not moving forward
  3. Tactics to avoid and embrace by situation and personality type

Click here to access the full list and to learn more about SPASigma.

 

Other SPA Events

Click here for other SPA event dates and times including our upcoming webcasts.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

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Are Profit Vampires Sucking Your Blood?

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Read excerpts of an article that highlights how important it is for distributors to implement proven scientific pricing and sales negotiations processes that will stop unnecessary discounting by sales people for small customers who promise to buy in volume, killing a deal’s profitability with free services, and empower them to negotiate with confidence when providing complex customer solutions.

“The evil deeds of dastardly fellow, known as Count Purchasing, are legendary.”

You could probably add a few anecdotal stories of your own. But in our world, the greatest disaster to innocents with salesperson business cards comes when Count Purchasing transmutes into the shape of our best friend.

His sweet siren’s song goes something like this: “You’re really a great company. We really think you have worked hard…and because of all this, I am going to let you have the order… Assuming you can match the price.” To the uninformed, it sweetly rings forth with a too good to pass up message. At least until you analyze its hidden meaning.

Deep in the cavernous hideout of his castle office, Count Purchasing has an engraved plaque bearing the motto “buy from the best supplier, but pay the price of the worst on the planet.” In our case, he may be touting the ill-conceived price of that organization down the street. The one with no post-sale support, poor delivery and terrible accounting practices. Or in the case of our technology driven products, he may use the price of a company without specialists. All falling after your motion control, abrasives or cutting tool specialist invested days and dozens of phone calls helping his own engineering team develop detailed specifications, bills of materials and all the rest. Simply put, you do the work and get paid like the guys who did nothing.

“Vampire killing tip Numero Uno, you must recognize that Count Purchasing was trained to sing this verse.”

But wait, there’s more.

Another sweet song comes in the form of exaggerated quantities. “I will be acquiring zillions of these over the next few years. Give me the price level for your largest quantity break.” Strangely, the large order never comes. What’s worse is we, as innocents, often lock their organization into large quantity pricing without setting expectations for lack of quantity or periodically reviewing the results. Years pass and they continually feed on our goodwill. Again, a “trick of the trade” is used to pull the life’s blood from our organization. Vampire killing tip number two; develop quotes that allow for periodic quantity reviews.

“Not every vampire in our industry has a cubical down in the Procurement Department.”

Some of them dwell like invisible demons in the minds of our own folks. When we substitute “nice guy” thoughts in place of business sense, they flourish. Each and every time we give a really friendly small customer the same pricing as the gigantic user down the street – they put the bite on our bottom line. Research by David Bauders of Strategic Pricing Associates demonstrates thousands of examples of this phenomenon. Tiny customers are given sub-market pricing, strangely buying quantities of one or two at levels equal to or lower than your biggest customer who purchases hundreds at a time. Drop by precious drop the life’s blood of your business is drained from your bottom line. How much can this be? These are tiny droplets – but the red cells add up. David’s team has a track record of adding two points of added margin to distributor’s business.

“A trip to the musty crypt of the undead reveals a menacing claw fiendishly refusing to die.”

This monster goes by the name of Free Service. Let’s bravely explore the situation. We sold the customer a system back in 2006. Strangely, a decade later, we find ourselves mesmerized into believing post-sale service is our responsibility. What’s worse, we think we’re obligated to do it for free. In spite of expert advice to drive a stake through the beast’s black heart, the darn thing just won’t die.

The practice of free service is a time honored tradition in the electrical wholesaling world. It is reinforced by some supply partners. They would have you believe it’s the true duty of every red-blooded prey… I mean distributor. And systems integrators, contractors and installers echoed the message like sound bouncing in Dracula’s tomb. For some unholy reason, there’s not an issue with our service, as long as we never, ever charge for the privilege.

“Spend a little time at your next sales meeting talking about negotiation techniques.”

A few years ago we worked with purchasing guru Malcolm Mills on a series of sales process improvement programs. We discovered the guys on Malcolm’s side (purchasing) regularly attend classes covering negotiation strategies. They don’t lie, but developing skills to mislead our sellers seems to be worth the investment to them. Every time we stumble into one of their snares, it cost us money. Insist your sellers answer the comment “your price is too high” with a powerful value statement.

Invest a little time in understanding your value to the customer. Some of your day-to-day actions create thousands of dollars in real measurable value. Don’t let Count Purchasing hypnotize you into believing “all our vendors can do that.” First, it’s probably not true. More importantly, it doesn’t matter. If you produce real measurable value – it adds to the customer’s bottom line. You should be fairly compensated.

Click here to read the complete article.

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To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

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The Future of Knowledge-based Distribution

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Read excerpts of an article that highlights how important it is for distributors to be “knowledge-based” and implement proven scientific pricing and sales negotiations process that will stop unnecessary discounting by sales people and empower them to negotiate with confidence when providing complex customer solutions.

“The members of FPDA tend to be deeply involved in providing customer solutions”

Earlier this month I was asked to lead a discussion on the future of distribution. In this case, we focused in on the future of members of the Fluid Power Distributors Association (FPDA). Since many of our readers are not FPDA members, allow me to provide a bit of background. The members of FPDA tend to be deeply involved in providing customer solutions. In many ways they epitomize the knowledge-based distributor. Their products are complex, sellers understand product technology and application nuances, customers lean on the distributors to provide technical support and most offer up additional fee based services.

Referring to the infographic below and the evolution of the distributor model, FPDA distributors are the poster perfect picture of the Knowledge-based distributor. Deep product expertise, product specialists, customer centric engineering and solution selling is their mode of operation.

“How can the distributor ensure they will be paid for the value they provide?”

For this breed of distributor it’s not about value-added sales, instead the crux of the equation is value-metric selling. Simply put, knowledge-based distributors provide value far above the logistically based guy whose “value-add claim to fame” comes by way of timely deliveries, consolidated invoicing and the occasional cross reference to a more conveniently purchased part. Instead, knowledge-based distributors provide the stuff needed to help the customer develop better manufacturing processes, reduce costly downtime, reduce rejects and drive profitability.

Strangely, only a few of the sellers in this high value world really understand the true worth of their actions. Research indicates, their sellers go the other way, undervaluing what they do. Instead of measuring the financial impact of their ideas in terms of impact to the customer’s business, they shrug off the economic benefit as part of their “service” often struggling to justify a percent or two greater margin than the person who provides just products without much needed technical support. And, this puts the group in a dangerous position.

“Knowledge-based distributors need a different kind of training”

The selling advantage goes to the distributor salesperson who can explain the value of their proposed solution in real customer-centric terms. It’s no longer acceptable to pepper the conversation in technical jargon and call it good. Improved cycle times, communication speed, scan rates and other data may be factor for selecting components. But when a solution is being discussed, the conversation must focus on advantage to the customer. Going further, customer advantages are best described in financial terms. For instance, the product feature of improved cycle times, translates into 10 percent more parts generated and that newly created production generates $ 500,000 additional revenue to the customer.

Training focused on understanding customer economic value is critical. But, it must also be understood that rarely are solutions outlined in black and white. To better understand the situation, let’s explore a hypothetical interaction with the customer.

“A study of distributors conducted earlier this year, points to a deficit in distributor negotiation skills.”

Looking more closely, we have sales teams who constantly negotiate solution and system pricing yet have very little formal expertise in the practice.

Anticipating questions, allow me to address a couple of points.

  • Our customers see us a partners and don’t negotiate when dealing with us. This misconception is rampant in the distributor landscape. Customers certainly do negotiate. And, many have formal negotiation skills training. Have you ever formalized the technical side of a solution only to be handed off to a purchasing person to finalize the details? This in itself is a negotiation tactic.

  • Our sales team is paid on the gross margin they generate, it’s in their best interest to capture as much gross margin as possible. From a purely cerebral standpoint, this makes good sense. However, many salespeople reason that a commission on a small gross margin is better than “haggling over a few bucks” and possibly jeopardizing the order or customer relationship. Pushing further, antiquated commission policies sometimes encourage sales types to capture less than optimal margins because giving away technical support or engineered services does not reflect on the gross margin number. In this case, the salesperson gets a commission on bad business.

Click here to read the complete article.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.