We like to say that, “all the sins of the sales process come home to roost in the negotiation.” Meaning there is a clear correlation and intersection between your sales negotiation and sales process. If you’ve got a negotiation problem, it could very likely be tied to the ineffectiveness of your sales process.
More often than not, sales leaders believe they have a negotiation problem because they face one or more of the following challenges you may recognize:
Their reps are stuck dealing with procurement at the end of the deal
Their reps can’t gain access to anyone else in the organization except procurement
Their customer negotiations are all about price
The customer is totally in control of the negotiation process (and we are reacting to what they are dictating)
Their reps don’t know how to keep competitor’s influence out of their negotiation
However, these sales leaders might not realize how the roots of these problems reach all the way back upstream in the sales process. We explain it this way… the sales negotiation process always begins long before the negotiating starts with the customer.
There are similarities between the sales and negotiation processes - both start at the early stages of the buyer conversation and evolve constantly throughout the opportunity. They are both dependent on a clear understanding of the business problem the customer is trying to address and are impacted by the business, political and competitive landscapes.
They are also inseparable from one another. You can imagine the two as opposite sides of the same coin… a problem with one equals a problem with the other. Poor discovery early in the sales process significantly limits our negotiating position later when we are closing the deal. So, if during negotiations your account teams are having trouble accessing key players regarding their biggest problems, they’re having the rules of engagement dictated to them or information is being withheld, it’s most likely primarily due to a sales problem.
To understand if you’re dealing with a sales negotiation problem or if you really have a sales process/qualification issue I recommend you ask yourself these questions about your current sales process:
Does it help both sides gain insight about the true impact of failing to reach an agreement? (This understanding is created upstream during the sales process and determines what the customer will compare our offer against in the negotiation).
Is it designed to expand the number of items and potential value of what we will be negotiating for? (Creating value early in the sales process is key to capturing more value in the negotiation).
Does the sales process provide guidance on building negotiation position early, to ensure you’re in the strongest position once the negotiating begins? (Waiting until just before the close to plan and execute your sales negotiation strategy is far too late).
Establishing an effective negotiation strategy and position of strength, is dependent on these early sales stage activities. If the answer to these three questions is “No”, you most likely need to improve both your sales process or your sales negotiation strategy?
Start by taking a look at your sales process and the insights and positions it creates for your sales teams. Do those strategies equip them to be effective negotiators? When you consider the answer to these questions above, you should fall within one of the following categories:
You Don’t Have a Working Sales Process: If you’re starting off with a sales process that does not generate the knowledge and position required to be effective in a negotiation, you must first establish and/or strengthen your sales process.
You Have a Sales Process that Works: If you’ve implemented a well operating sales process, the solution may be to layer in a sales negotiation process that leverages the good selling you’ve done. The key is to leverage your success creating potential value in the sales conversation, so you can capture and protect value later in the negotiation.
A successful sales process will garner insights and build strength that your reps can leverage in the negotiation to win a more valuable deal.
Ultimately, is it possible to negotiate your way out of bad selling? Or to sell your way out of poor negotiating? Frankly as we all know the answer to both questions is “Yes”. But we would argue that it is very hard, costly and unsustainable. If you enable your selling organization to sell and negotiate well you will find exponential benefits and powerful results that move the needle.