08/06/2011

Of Horses & Carriages

By Guy Aston, Mid-Market Business Director, Huthwaite International

Sales and Negotiation’; three words that are so often connected, yet they are very different behaviours. However, in one aspect they are linked — a bit like horse and carriage. Can you imagine making a journey in a state-of—the-art carriage, pulled by two tired, worn out old nags? You might be lucky if you arrive at all. How about two superbly fit horses pulling a rickety old cart? If you do arrive, you will be in no shape to enjoy your destination. Whilst sales and negotiation may be very different behaviours, they are inextricably linked. Let me explain.

The two disciplines of sales and negotiation are both parts of the sales process. What we want is for the closing stage of the process, negotiation, to give us a profitable and sustainable piece of business. This will not come purely from negotiation skill; the context within which the negotiation is set will have a major part to play. Let us assume for the moment that, at the point of negotiation, the customer's perception is that your offering is little different from your competitors. Can you imagine what the negotiation will focus on? Yes, you have got it in one: price, as it’s the only differentiator. This could be a tough negotiation and you could suffer major margin erosion to get the business — unless, of course, one of your competitors is prepared to take a deeper hit than you.

It is the early part of the sales process that can impact positively on any subsequent negotiation. Suppose you have taken care to build customer value in elements of your organisation or offering, especially those where your competition does not fare so well. You have taken the time to explore your customer's needs in depth, giving yourself the opportunity to bring value in places the competition may have missed. In the customer's perception this process will be putting clear space between you and your competition. The customer may begin to realise that you are not just nice people to do business with, but that you bring real tangible value to their organisation. In fact, you are the supplier they would like to do business with.

Now consider your negotiation position. You are the most valuable supplier, showing a serious return on investment. The negotiator may well be tasked to squeeze the price, but on no account to let you walk. Let's face it; given the value you bring, the customer may believe they can afford to pay a little more. This enviable situation has been established by effective selling, creating the very best negotiating situation.

Therefore, the climate of the negotiation is dependant upon the sale that has gone before. It is possible in some quarters that a really effective sale will eliminate the need for a negotiation. As well as this dependency, there is also a need for a consistency of style. If we have adopted an enquiring, understanding, customer focussed approach during the sale; we should be doing the same through the negotiation. That is down to negotiation skill and that, as they say, is another story.

For more information on Huthwaite services visit: www.huthwaite.co.uk


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