Price negotation- Cost benefit is not just about the cheapest price

An email 29th June 2011 came into my inbox from a past delegate

Hi Hugh

I attended your TACK Pro Payback Selling in Action course at Warwickshire Uni on 11 April 2011 - 12 April 2011.

I would just like to thank you for a great 2 days, your knowledge and advice has really helped me develop my sales techniques and as a result I have seen a great improvement in my relationships with clients and overall sales figures!

I feel that your tips and guidance answered many questions for me, but I have one issue that I am not sure about and was hoping that you could shed some light on the matter…

In the majority of the appointments I have, the customer will ask for a price list. This is fine but on one occasion the customer took the prices we negotiated over a few days and showed them to their current supplier, and of course their current supplier matched our prices and the customer decided to keep their existing supplier, despite they were paying higher prices than necessary for a number of years.

How do I get around this? And more importantly do you have any advice to prevent this happening again in the future?

Neil*



(It is great to receive such an email of thanks for a training course. Of course 50% of training effectiveness comes from the application of the skills by Neil in the field but is great to know that the course helped Neil on his road to the fruits of his success.)

I guess the first response to Neil's problem is "experience is a great teacher" in selling also. What the buyer did was legal but not particularly ethical. His trimming of his incumbent supplier's prices will make him look like a skillful buyer in the eyes of his company and possibly his purchasing peers.

It also emphasises that Price is not the only motivator for this buyer see the Research results from the Buyers' Survey of Supplier Salespeople.(left)

Neil's experience is proof that cheaper prices he offered was not enough to unseat the incumbent.

Of course much of business has to be based on trust.

"Caveat emptor" buyer beware is often quoted but there is also a balancing phrase of 'caveat venditor' which translates as seller beware!

Perhaps one option Neil may care to try is rather than give a discounted price try to trade it.

i.e. " If you place your business with me today then we will offer you this discounted price" followed by a trial close " Do we have a deal?"

Remember " If you don't try and close - you are working for the competition!"

Neil's experience is the uncomfortable truth of this old saying. Maybe revisit the article on closing skills on this site - scroll down for link.

Now that inflation looks on the return it may be a good idea to ensure any offer has a contract end date so you are not held to a fixed price which may prove increasingly unprofitable over time.

So far as preventing it ever happening again that is not possible but one can try to protect oneself a little better.

Finding out more about the buyer's priorities on matters such as quality, service, brand, track record, references etc.is important. Be better prepared next time. Take a look at the questioning skills article - scroll down to link below.

Remember also that although the incumbent supplier has held onto the account he must have gone down in the buyer's estimation.

From my experience sometimes a short gain loss such as this can act like a shot below the waterline which takes a little while for the ship to sink.

So don't give up on this buyer entirely but be better prepared next time.

Fortune favours the brave - Good luck.

* For reasons of confidentiality Neil is not my delegate's real name. The case details are genuine.


Click for free executive summary of the Buyers Views of salespeople research study

Other related links


Link on Questioning Skills
http://fruitsofsuccesswithhugh.blogspot.com/2011/05/38-great-sales-questions-craft-of.html


Link on Closing skills
http://fruitsofsuccesswithhugh.blogspot.com/2011/02/7-effective-sales-closes-and-ways-of.html

For details of the TACK courses Neil was referring to:
PRO-PAYBACK SELLING – The Sales Training Course
http://www.tack.co.uk/course_details.php?cat_id=72&co_id=48&col=F6082E

PRO-PAYBACK SELLING IN ACTION
http://www.tack.co.uk/course_details.php?cat_id=72&co_id=27&col=F6082E

Sales Prospecting and getting appointments - Laying seige to brickwalls

In my inbox last Friday afternoon I got this request from a delegate from a course I ran three months ago in Coventry, England.

Friday 3rd June 2011 14:58

Good afternoon Hugh,

I am having trouble dealing with a number of large xxxxx xxxxxx companies, they are huge multiple site/country/continent businesses, every time I contact them I get the receptionists suggesting that I send out an email to their "supplier@" email address for fill in the enquiries portal......this leads to dead ends and does not enable me to speak to the xxxx procurement teams etc....

How can I get past this "brick wall", how can I get to speak to the relevant procurement departments?
Jason

Many in sales share Jason's challenge today. As competition increases, and clients and prospects become busier and busier, the challenge of getting in front of the right people at the right time becomes greater and greater.

So we must become more skilled and more professional at making appointments and obtaining interviews with both new prospects and existing clients.

The principles are basically the same for both categories. But the application of those principles will differ according to whether you are making a first prospecting contact or a repeat call.

There are two main methods available to you:

Telephone
Cold calling


Other methods like email, advertisement returns and direct mail can be used either to obtain leads or to prepare the ground for you, but any of these has to be supplemented by one of the two main methods.

The basic sequence

This is the same whichever method you are using ( face to face or phoning) and is very similar to the sequence of an actual sales presentation:

• Clarify your objective(s): the primary one must be to get to meet the person, but secondary ones could be to obtain information or referrals. Who is the person with authority and need for your product or service?

Sometimes receptionists, as Jason has experienced, can be unwilling to give out names and email addresses. So further work on research , planning and objective setting may be required.

Finding the names:( some suggestions you might care to try)

If your target is a large firm or group as mentioned in Jason's email you may find it useful to consult a directory like Kompass which has details of members of the CBI with information on the business and the names of the Directors on the board ( Why not start at the top? Nothing ventured -nothing gained!). Reference sections of Public Libraries hold hard copies of Kompass or you may prefer to access it on-line.

Kompass.co.uk
- The Business Search Engine for the UK
Other directories or databases such as Companies House http://wck2.companieshouse.gov.uk/6407428914b7efb409dc76f1bf4d1e80/wcframe?name=accessCompanyInfo

, or the business directories like Jordan's, Dun & Bradstreet etc.

Another great subscription resource is Thomson Local.com

Their Business Search PRO helps if you are looking for up-to-the-minute business data for a direct mail or telesales campaign, email addresses and campaign execution without worrying about spam or even a fully automated direct mail through the post.

Thomson offer the latest data, updated weekly, via this online marketing-leading business database. With over two million business listings and you can select on a wide range of criteria, download your selection in Microsoft Excel format and use the Campaign Manager system for telemarketing.

Business Search PRO could be the solution to identify and prospect to your potential new customers.

Another service from the Thomson stables is their New Connections record :
Selections can be made from any combination of the Thomson Local directory areas or you can purchase the full UK national file.

Each month, the data Thomson receives is never older than three months ensuring subscribers receive the most current and fresh data available.
• Company name
• Business classification
• Address including full verified postcode
• Telephone Number - excluding telephone numbers on the TPS register
• Fax Number (where available) - excluding fax numbers on the FPS register
• Contact name and job title of Senior Decision Maker (SDM)
• Contact name and job title of Last Verified Contact (LVC)
• Premises Type
• Number of employees
• Date of moving into property
• Website address (where available)
• Established date of the business

Thomson's Fastest Growing company business data service is another option which supplies data such as:-

• Company name
• (Thomson Local verified)
• Company name
• (Companies House)
• Business type
• (Thomson Local classification)
• Business address
• SIC code
• Turnover growth %
• Turnover (£)
• Pre-tax profit (£)
• Year end
• Last accounts date
• Number of employees
• Premise type
• Holding company
• Main telephone number
• URL address
• Directors
• (up to maximum of 10)

http://www.thomsonlocal.com/ Contact :Beverley Bond - Telephone Account Director beverley.bond@thomsonlocal.com.

Another useful source of contact names can be the in-house magazines and email newsletters that the big groups use to keep their employees and sometimes suppliers in the communication loop.

You could always try Googling for the name by entering the title and the name of the company e.g. "Procurement Director + xxxxxx International Ltd". The Internet has made people more visible. You might find the name that way.

Another approach could be an approach via LinkedIn the business social media network.http://www.linkedin.com/Performing a "People Search" will quickly find the right person at the company and determine who you know in common for a warm Introduction. If this isn’t possible, you also have the option to reach out directly via an InMail.

Reading an article on partner sites to LinkedIn (such as Business Week, CIO) you can immediately see how your network can help you get access to that company to discuss an opportunity using "Company Insider". By clicking on the icon you can see who you’re connected to at LinkedIn.
You might consider using search to find relevant contacts who have had past experience in a similar type of situation and ask for advice or a consulting arrangement to provide the needed perspective you are after.
You could also use LinkedIn's Company Pages to get deeper information on who works at the company, their background, and other key statistics.

Viewing your counterpart’s profile can help bridge the gap by providing mutual contacts, background, recommendations, etc.


• Prepare: remind yourself of the questions/facts/benefits you will use according to how the situation develops, and how you will answer the most likely put-off’s or objections; review the information you already have about the person/organisation; ensure you have your diary and other materials to hand.

• Be polite and respectful but sound confident: use your prospect’s name immediately; be sure to get it right; give your first name and surname; never appear apologetic for interrupting but thank the prospect for speaking to you if he/she has done so at an inconvenient time.

• Obtain attention quickly: use a question, a referral, a previous request to “contact me again”, a factual statement or some other ‘attention getter’ as soon as possible; don’t waste time.

• Explain the benefits of a meeting: motivate the prospect to want to meet you by giving a beneficial reason for doing so; but remember that at this stage you are selling the interview and not the product/service.

• Answer objections and avoid put-offs politely but firmly: always appreciate the client’s point of view; never argue; emphasise that the meeting can be brief; explain why a personal meeting is necessary in the client’s interests; don’t be led into making your actual presentation by phone (unless this is appropriate).

• Close on your objective: ask for the appointment directly, with or without one of the back-up closing techniques (e.g. offer alternative times/dates); be as flexible as necessary in terms of when/where; resort to a secondary objective only if you completely fail in your primary one.


Special considerations

• PAs and contact's coworkers: they must be your friends and allies not your adversaries; be polite and never ‘talk down’ to or patronise them; always introduce yourself with first name and surname and be careful about the use of their first names (if in doubt, don’t); ask for their help; smile (even when on the phone); be friendly but don’t waste their time; ask them for information; if they ask for further details before they will put you through, keep it short and simple and politely repeat your request.

• Receptionists: exactly as for PAs and the contact's coworkers but when cold calling be patient and do not rush them; offer to speak directly to your prospect on the receptionist’s phone if preferred; be confident but not aggressive.

• Literature: emailing pdfs, mailing or leaving literature is seldom effective by itself; it can even be counter productive because it gives a prospect a reason for not seeing you personally; always be prepared to explain why it is not a substitute; have ‘mini literature’ which you can send if necessary which will simply whet the client’s appetite; if you have to send full literature then use it as a reason for calling back for a personal appointment.

• Business cards: try to avoid giving them to receptionists straightaway, as a snap (negative) judgement may be made by a prospect if your card is read over the phone or presented ‘cold’.


Click for free executive summary of the Buyers Views of salespeople research study

TACK International run a special Appointment making course http://www.tack.co.uk/course_details.php?cat_id=72&co_id=66&col=F6082E

If you have a sales challenge 'brickwall' or problem like Jason's above that you would like some ideas of how to solve, why not post it in a comment box to this post below.

Kompass.co.uk
- The Business Search Engine for the UK

www.thomsonlocal.com