A consultative negotiation is not just about the give and take of terms. It’s also about the equitable exchange of information builds relationships. Rember these core tenets of negotiations throughout the sales process to improve the outcomes or your deals.
Negotiations Occur Throughout the Selling Process
From the first conversation, sellers are building trust and creating a collaborative environment that helps move negotiations forward. Sellers can spark this collaboration by sharing information thereby inciting the customer to do the same. According to the established social norm of reciprocity, we are inclined to respond to another person’s action with a similar action. “We are obligated to give back to others, the form of behavior that they have first given to us,” remarks Dr. Cialdini, “There’s not a single human culture that fails to train its members in this rule.” In fact, science reveals that holding back on sharing information has a negative impact on desired outcomes and reduces trust. If we want information, then we need to share our information—which builds a customer’s willingness to share and trust.
Look for Early Indicators of How One will Respond to Negotiations
Sellers must identify all demands early in the negotiation process. Doing so avoids the common pitfall of the “fixed-pie bias,” the notion that a scenario is only win/lose because the size of the potential gain is fixed. Research published in the journal of Organizational Behavior » Continue Reading.
Effective Consultative sales negotiations serve 4 key objectives:
Increasing Deal Size Reducing Discounting Improving win/loss ratios Realizing greater value (proposed vs. closed) Tips for Effective Sales Negotiations
So, how do effective negotiators keep their goals in tact through the contract? They:
(1) Use Preparation Time
Sellers must come ready with relevant insights that demonstrate their detailed knowledge of industry specific challenges. This shared knowledge “primes” the customer. Priming is the basic principle of prompting a person to think a certain way. This effect is helpful to sellers who want to encourage a customer to recognize the value of a proposed solution. This influence of the customer’s decisions begins with the first conversation. Effective priming helps customer’s change their mindset from “someone is trying to sell me something” to “this solution can get me to where I need to go.” Priming is trust building. The seller is helping the customer become comfortable with sharing information from their side of the table.
Building trust at this early stage creates an environment that’s conducive to successful consultative sales negotiations. The reason: trust signals fairness. This sense of equitable interests has been shown to bring efficiency to selling. Research published in Psychology & Marketing revealed that by “priming a consideration for fairness, a seller can increase a customer’s satisfaction without sacrificing profit.” Additionally, “Fairness-primed buyers consequently had a more positive attitude toward the seller.”
(2) Lead By Opening
Effective » Continue Reading.
Too often we think of selling and negotiating as two separate ends of a timeline. In truth, they exist together on a spectrum. Every moment of selling involves some amount of negotiating. Therefore, every conversation places another brick in the road toward closing a sale. Effective sellers keep this in mind by shaping the customer’s perception of value. Keeping this approach in the context of the customer’s needs and priorities creates negotiations that are mutually beneficial rather than an exercise of blunt force. The result is a handshake – not an arm wrestle.
How Consultative Negotiations is Different
A consultative approach to sales negotiation training helps sellers learn to understand the deeper needs of the customer as the finish line comes more clearly into view. This collaborative engagement rises above the adversarial dynamic that many associate with the word “negotiation.” However, being consultative doesn’t mean relinquishing ground. In fact, consultative negotiators understand how to control a negotiation and arrive at a mutually-beneficial outcome.
They win by:
Relationships are powerful. In fact, Gallup reports that “B2Bs win by building relationships, not selling on price.” Their research concluded that nearly one-quarter of accounts that had “high engagement scores” with sellers grew by 20% or more in the following year. Strengthening a relationship helps keep the seller at the fore of the customer’s mind. A stronger connection establishes trust and respect, both of » Continue Reading.
Running a race is more than simply crossing a finish line. Along the way, you need to know your pace and stamina. You need to know your capabilities. However, too often we ignore these factors and simply head for the tape. When we measure only the single factor of completion, we miss all the crucial data points in between. We need more measurements.
Outpacing the Dunning-Kruger Effect
“Even if you are just the most honest, impartial person that you could be, you would still have a problem — namely, when your knowledge or expertise is imperfect, you really don’t know it,” remarked psychologist David Dunning. This sentiment encapsulates his work in social psychology which culminated in the discovery of the Dunning-Kruger Effect.
This cognitive bias asserts that we often fail to recognize shortcomings in our performance. Simply put we generally lack awareness of our inabilities. This problem stems from insufficient feedback because “giving feedback is a tricky business,” explains Dunning.
Social barriers make feedback difficult to give and perhaps even more difficult to hear. Nonetheless, it’s a critical step in the learning process. Dunning urges that it’s important “to give feedback that is concrete, as opposed to feedback that’s about the person’s character.” This kind of objective focused feedback is possible today with digital learning tools.
By offering multiple points of feedback, digital learning offers real-time information that helps learners move beyond a false perception of their abilities. Participants take » Continue Reading.
We need to make assumptions in life; we would never move forward without them. However, we need to periodically check, or even change, them because unquestioned assumptions can appear as facts. Proof of this is found in the unlikeliest of places: the tomato, a plant once so feared people called it the “poison apple.”
Those living in the 1700s frequently became sick after eating tomatoes. Many died. People believed that it was so dangerous that it was classified in a family of plant species carrying the name “deadly nightshade.”
Yet, the tomato they feared was identical to the one we enjoy today. So, why were people terrified of tomatoes? The answer lies in their assumptions.
Many Europeans at the time ate from plates made of pewter, an alloy high in lead. The acidity in tomatoes is strong enough to leach this lead from the surface. For 200 years, they assumed the tomato was to blame.
Even the most faulty assumptions can persist for centuries.
The story of the tomato serves as a reminder of how assumptions can mislead and cause bad decision making — two big threats for people in sales. Pursuing an opportunity or growing an account has a lot to do with making frequent strategic and tactical decisions. If those pursuit decisions are based on faulty information — due to assumptions versus facts — the path chosen can lead to » Continue Reading.
Manufacturing is the driver of innovation and emerging technologies. Richardson has partnered with some of the leading global manufacturing companies to provide comprehensive solutions based on a deep knowledge of this industry. While there are nuances specific to various manufacturing segments, this report will provide insights into the global trends including:
Growth by Acquisition: While organic growth is slow in this industry, expansion through acquisition is on the rise. Global organizations are making gains by acquiring companies, thereby widening their footprints. Sales Through Distribution Channels: Buyers, influenced by channels, often dictate the marketing strategy of a company. The industry norm of using a distribution model is growing amid efforts to minimize overhead and stay competitive. Innovation Driving Globalization: Companies are constantly seeking new markets. Therefore, leaders need to invest their money with a focus on the best potential growth. This growth begins with a focus on innovation. Sales opportunities based on innovation are becoming a driving force for global growth. Sales Challenges in the Manufacturing Industry
These strategic shifts are becoming the focus for many manufacturing companies facing challenges like differentiation, and market share preservation. Here’s a look at some of those challenges, with insights on how to overcome them.
Consistency in Sales Approach
The reach for growth via acquisition is creating new complexities. Imagine one global organization, acquiring five different companies. Each company introduces five distinctive processes and five unique (and sometimes conflicting) sales methodologies. As a result, pricing » Continue Reading.
Consultative selling is a method for narrowing the remove between the seller and buyer. By closing this gap, the relationship transcends a “give and take” dynamic to become more of a shared effort to resolve a complex business problem. Reaching this point means embracing these guiding principles.
Exude Conviction, Confidence & Curiosity
Developing skills and behaviors that demonstrate your commitment to the relationship and attentiveness to the details coming from the customer. Bring a strong point of view balanced with a genuine interest in them and what they are trying to achieve.
Connect to the Emotional Side of Buying
In one word, sellers must empathize. Doing so means not simply acknowledging the customer’s challenges but seeking to feel what they feel and understand what they think. Friend/Foe Bias is another form of cognitive bias that tells us we are naturally wired to assess each other’s intentions and to quickly decide if someone is a friend or foe (threat). Seller behaviors must not be manipulative or appear self-serving to avoid triggering a threat response and eroding trust.
Get the customer talking. You cannot move the sale forward without both sides contributing to the conversation. Some buyers are reluctant to offer information which is why effective sellers first give so they can eventually get. Customers will resist opening up if they: are bored, feel interrogated, are asked uneducated questions, » Continue Reading.
It’s time to put the customer back into the conversation. The greatest resource a seller has in winning new business is an honest dialogue. Engage the process as a team. Call upon these core tenets of consultative selling in every buyer interaction.
Sellers need to come prepared. Effective selling begins before the conversation starts. Seek out resources to learn more about the key drivers behind the customer’s business as well as the decision makers and their process. Interactions with the customer are valuable, so be sure to tackle the easy questions on your own before meeting the customer.
Foster openness through dialogue that allows the buyer to feel less guarded about their insights on what they need in a solution. This exchange primes the seller to effectively position value later. All things being equal, the ability of a seller to tightly demonstrate relevance to a specific customer issue or opportunity (rather than simply an industry-wide one) will always be more compelling.
Successful sellers rely on periodic feedback from the customer. This “checking in” ensures that the customer is involved in the conversation. Feedback will reveal if the seller has offered any ideas that are incongruous to the customer’s perspective. Knowing these objections is critical before making recommendations that involve the product at hand.
By creating a dialogue, asking questions, and eliciting feedback, sellers will be well prepared to ask for the » Continue Reading.
Competing in the world of selling today means understanding the changing world of your buyers and adjusting your sales approach accordingly. The biggest change for sellers is that the game has gotten harder, and sellers need to execute at a higher level than ever before to compete. Committing to this level of change is the difference between college sports and pro. The players are bigger. The game is faster. The conditions are more challenging.
Recent Changes in the Buying Process Unprecedented access to information: Today’s buyers are more informed and more prepared. They perform extensive research and many are deciding on solutions before engaging a salesperson or having a conversation. As a result, buyers show up with an arsenal of knowledge as well as preconceived idea of what they believe they need. They are also able to complete more phases of the buying cycle on their own. Research from Forrester forecasts that “1 million B2B salespeople will lose their jobs to self-service eCommerce by the year 2020.” This isn’t the end of the sales profession but rather a wake-up call to all sellers that the customer is looking for more. Availability of options: Related to the overabundance of information, buyers today are bombarded with opinions and options. There can be a multitude of ways to solve a particular issue and navigating the best path can be a challenge. Further complicating the challenge is » Continue Reading.