| Probably the most often heard objection from | | | | something, anything" will be greater than the need |
| customers centres around the issue on price. | | | | to deliver profits. |
| In my Nov 2007 issue, I mentioned that (apart | | | | In fact in most companies, sales people may be |
| from habitual bargaining) the main reason | | | | fired immediately if sales targets are not reached, |
| customers want to hack down the price is that | | | | but may only be reprimanded if the sales |
| they don't see how the value you provide justifies | | | | generated are loss-making ones. Strange, but true. |
| the (high) price they are paying. | | | | Are You Prospecting for the Right Kinds of |
| However, justifying and educating customers on | | | | Customers? |
| the value of your offering to be worth more than | | | | While some sales people may be masters in the |
| the price you are charging is just part of the | | | | art of handling objections, no amount of |
| answer to good sales negotiation. If you want to | | | | objections handling expertise can save the deal if |
| emerge as a winner in the selling game, you'd also | | | | the customer wants nothing but lower prices. |
| have to eliminate the causes of bad negotiation | | | | While it is true that most customers are cost |
| too. | | | | conscious, they too will have to accept that there |
| Are You Doing Enough Prospecting? | | | | are differences between the price of a product |
| While most sales training materials will focus on | | | | vs. the cost of purchasing. However, there are |
| objection handling techniques when it comes to | | | | also customers that refuse to make distinctions in |
| handling price objections, it does not address the | | | | either, and will just buy the cheapest priced offer. |
| fundamental issues of negotiations. When | | | | If most of your customers in your pipeline belong |
| negotiating, you may want to know what is your | | | | to this category, then you'd probably need to do |
| Best Alternative to a Negotiated Agreement | | | | better qualifying and filtering in your prospecting |
| (BATNA), which in simple English, what will happen | | | | process. This is not to say we will find customers |
| if you don't accept the negotiation outcome | | | | who will buy our products and services at any |
| placed on the table. | | | | prices we dictate. I believe we aren't naive |
| To sales people, the options are: | | | | enough to wish for that. |
| - Close a deal, but at smaller profits and smaller | | | | What we need to look for are prospects who are |
| commissions; | | | | at least willing to listen to us, just as we are willing |
| - Close a deal at no profits and no commissions, | | | | to listen to them. This means that more work is |
| but still able to achieve sales quotas | | | | required when prospecting for new customers. |
| - Close a deal at a loss, but will make it up on the | | | | Unfortunately, most sales people love to interact |
| next deal, so that there will be profits for the | | | | with customers, but simply HATE to prospect. |
| account in aggregate | | | | Hence, the sales team who can make the |
| As you can see, this is a slippery slope for sales | | | | discipline to prospect more, and prospect better, |
| people who may just bend over backwards and | | | | is going beat their competitors hands down. |
| give anything away just to make the sale. Now, | | | | Eliminating the Causes of Bad Sales Negotiation |
| what will be the root cause of such behaviour in | | | | While there are many other causes of bad sales |
| sales people? | | | | negotiation, and how you start your sales process |
| It is NOT because they have high sales targets to | | | | may just determine what you get in the end. |
| achieve, or that the sales person does not know | | | | In addition to poor prospecting, the causes of bad |
| how to apply objection handling techniques. The | | | | negotiation include: |
| reason is that the sales person is not prospecting | | | | - Poor questioning techniques that upset |
| enough, and does not have enough prospects in | | | | customers; |
| the pipeline. | | | | - Not knowing what customers want; |
| In the Nov 2007 issue, I mentioned that | | | | - Not knowing your customers' BATNA; |
| customers buy because "the pain of not buying is | | | | - Poor understanding of the values that |
| greater than the pain of giving the money to the | | | | customers want (and need) from you; |
| sales person and buy". Similarly, sales people are | | | | - Poor articulation of what you can do for your |
| unable to stand up against price pressures can | | | | customer; |
| also be largely due to the pain of not closing and | | | | - Following through with customers with low |
| losing the business is greater than the pain of | | | | influence on the decision making; Not know what |
| sustaining losses in order to close the deal. | | | | each influencer in the buying process wants to |
| And what causes the sales person to feel a | | | | get out of the deal; etc. |
| greater pain to lose a business? Burgeoning sales | | | | The list goes on, but it starts with the beginning, |
| targets may be the reason, but a bigger reason is | | | | that is have you got enough qualified prospects in |
| that there aren't many leads in the pipeline to | | | | your pipeline? |
| follow through, and hence the need to "close | | | | |