Archives For negotiation

I’ve written numerous posts on negotiating, and as I continue to study this area, it gets better all the time.  Over and over I have encouraged people to practice!  Use every customer satisfaction issue as an opportunity to work through difficult situations! Become an expert at staying cool, controlling the situation, and methodically moving through the process.

Yesterday I experienced another victory – I received a call several weeks ago from a telemarketer asking me to switch from Windstream to Time Warner Cable for phone and Internet.  The cost was about half of what I was paying (I think I actually wrote about this sale a few weeks ago – the agent did a great job selling me), so I bought it!  Well this was the week to cut over.  I am now running my office on digital cable phone for half the price…however, vmail was not included.  The sales agent assured me it was, but alas it is not.

So yesterday I decided to see how high I would need to go to have free vmail.  I started with the call center who predictably could not give me free vmail.  Agreeing that this would be impossible, I asked to speak to the supervisor – Wyatt soon joined me, and we reviewed the situation.  He was sure is could not be done, so I simply restated, “You are not able to do this”.  He agreed, and I asked for his manager John.  John was very helpful, however he was not able to do it either.  However, John truly did want to help me, and began reviewing some options.  Finally he came back and asked me to visit the local store.  Well, who has time to drive to a store in the middle of a work week?  So I asked for the store phone number instead, which he gave me.  From there I called the store, asking for the supervisor.

The person who answered the phone insisted on helping me before getting a supervisor involved, however, he also could not help me once I explained my dilemma.  Finally, I was escalated to the store manager Brett.  Within a few minutes Brett was checking to see what he might offer me.  I recommended a half year of free vmail, to which he agreed, and then proceeded to add it.  Perhaps I could have pushed for more, but I was happy with the response.  Time Warner Gets an A+ for customer service on this one (although I would recommend empowering some power down the line to shorten this up a bit).  Once again, it pays to work through the process rather than getting upset or giving up.  Give it  a try.

© 2012, David Stelzl

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Stelzl Labor Day Picnic in the Rain!

More decisions are going to purchasing, even when budget seems to be approved!  This means more negotiating…

(Note: Here’s a mushroom picture from our Labor Day picnic in the mountains – forecast; 10 inches of rain.  Lucky for us we had a picnic shelter)

Strategy

Don’t be fooled into thinking you are just there to go through some read tape or that the questions are just part of an informal price discussion.  Large companies (and probably many mid-sized companies) are going to negotiation training – you go to sales training; they attend negotiation classes.  They also read sales books – probably more sales books than you read.

Your best weapon is found in understanding how negotiations work and what is being taught in negotiation school.  They read sales books in order to understand the tactics you use to get people to buy.  If they know what Sandler says to do, they know where you are headed, and will craft their strategy to counter you.  Most discounts are given at the end.  The old Pareto principle – 80 percent of your discounts are given in the last 20% of the sale, which is often driven by dates you must hit to meet quota, accelerators or company goals that affect stock prices.  Managers and purchasing officers are watching the clock, studying the landscape is order to better understand your sales cycles, and your need to close by a certain date.  Once understood, they control the deal.  Michael Bosworth illustrates this with the wringing of the washcloth, squeezing you along the way until the water stops coming.  Tom Hill, a presenter from a resent homeschool conference notes in his talk on negotiations, “If someone gives in once, the buyer knows he’ll give in at least one more time”.  How does it feel to have people know what you’re going to do?

Counter Strategy

How do you combat the year-end squeeze?  In just about every presentation I give at sales conferences and training seminars, I urge sales people to create urgency through the discovery process. Urgency is your best weapon against negotiations.  If something is urgent, there isn’t time to shop. That’s why I love security sales!  There just isn’t time.  But there are other things you can do…

1. Does your client have a deadline – or can the project be tied to some upcoming event?  If there is justification for the initiative, knowing the gains or safeguards your client is reaching for can really help.  If you know it’s costing them to wait, you have an advantage.  Find out – don’t just sell a project, understand why this was approved in the first place and lean on it.  Note, sometimes negotiators will give false information to create a cushion here.  Don’t take one person’s answer as the gospel, especially if they live in IT.

2. Keep your quota to yourself.  It’s none of your client’s business how or when you get paid.  Don’t share compensation plans. This sale should be customer focused – you are helping your customer achieve something, not trying to make your own number.  If they see you hurting for money, they’ll likely take advantage of you.  If they know sales are slow, expect them to push for higher discounts to close sooner.

3. Stand firm – be confident in your solution.  If you focus on the great advice you are giving – if you act as a trusted adviser, you will be less affected by their negotiation strategy.  If they sense nervousness, they’ll keep pushing. As long as you appear to be caving in, they know they can get more.  I was asked by one customer, “What if we don’t buy this?”  Not sure why they asked, but I simply said, “If you don’t buy, someone else will,” essentially I was saying, “Your loss, not mine.”  Any other attitude will give them the advantage.

4. Put away stress – along with the above, manage your stress outside the deal.  If they sense panic, “I must close this deal!” you’ll lose every time. Purchasing agents are looking for signs of panic, and in this economy there are a lot of people panicking.  You can’t afford to panic, so before you make calls or visit, encourage yourself and put aside the emotional effects of not making it.  You can’t negotiate from a position of fear.

5. Always remove value…you may have to bring down the price, but first assess what they need aside from price.  “Price aside, is this what you need?”  I love what Negotiation Expert Landy Chase says, “If they say yes, you know you’ve been selected.”  This puts you in a great position to negotiate, and once they see you are going to lessen the deal when you lessen the price, and are willing to walk from the deal, they’ll stop negotiating.  Do the reverse, and expect to go through this again, every time you sell them something.

© 2011, David Stelzl

Visiting Cisco in Mumbai

In a recent sales opportunity we (the seller and myself acting as a sales coach) were charged with providing a competitive quote on unified communications (UC) products.  The company already uses UC, so the quote is simply an upgrade.  The seller assembled the quote, listing all of the necessary hardware, software, and services to move their client to the latest version.  The problem here is, the proposal has no differentiation!  It’s commodity product, necessary services, and a price.  You might say your uniqueness is in your people or your certifications, or perhaps you are the go-to provider for that brand of UC.  But in this case, you don’t have a platform to demonstrate value, so no one is going to see it.  What do you do?

The answer is in the discovery process.  Most of these deals are assigned to a presales technical person.  The sales rep has simply become a relationship manager, adding no value to the deal.  The technical person is generally too technical to effectively interact with the decision maker.  So the sales person and decision maker wait on opposite sides of the deal, the sales person hoping for a “yes”, and the decision maker checking against budget and competitive quotes.  Instead of sitting on the side lines, my client and I put some business level questions together to help us uncover the business needs surrounding this upgrade.

  • How does this prospect use their current unified communications platform?
  • What applications are they using with their phones
  • How do they use collaboration technology – how could they be more efficient if they knew more about it?
  • What are they not using, that would really add to their current business process?

This list goes on, but the point is, IT can’t answers these questions.  They may have an opinion, but it won’t be accurate.  These questions are asset owner questions.  Behind them is the understanding that someone is running a department that would benefit if they knew more about the power of UC.  With this in hand, the seller now has the opportunity to compare their findings with the technical findings their engineer will come up with.  With both in hand, the seller can now advise the client on how to change the way they do business.  Chances are, if the seller spends enough time with the top producers in this company, they will discover some of the secrets behind high performing employees, tie some of this success back to technology, and find ways to improve the current process with the latest upgrades, features, and add-ons available on a UC platform.  This is what it means to provide value – an effective value proposition.

Stay tuned for next month’s Free webinar – mark you calendar for June 8, Leveraging the Discovery Process to Justify New Business.

© 2011, David Stelzl

How do you win – you need a strategy.

Yesterday I called customer service to have two warm-steam vaporizers replaced.  This is the 3rd or 4th time these units have had to be replaced over the past seven years – but they are lifetime warranty.  The problem is, they require a $25 dollar fee (each) to return them, plus it costs $10/each to ship them.  I’ve never paid the $25 fee, however they put us to the test yesterday.

I use these opportunities to teach my children how to negotiate, so earlier this week I had one of my daughters place the call.  They started asking all kinds of questions and insisting we were doing something wrong.  She wasn’t getting anywhere.  In the past, this group has been easy to deal with, but something has changed and it didn’t look like we were going to get our units replaced for free this time.   So how did we win?

The key to winning with this type of call is understanding how to escalate the call.  Getting angry never works – after all, they are not obligated to give me anything.  The call center people really have nothing to lose, and certainly no liability.  Gathering my kids around the speaker phone, I said, “Let’s see if we can win this one.”

I made the call, getting the tier one person on the phone.  She insisted on going through a set of  diagnostic questions, and in the end determined that we could in fact send them back, but the $25 dollar fee was firm.  I asked her if she was able to wave that and she said, “No.”  I understand that – her company has apparently not given her authority to take action, so I agreed with her and asked to speak with her direct supervisor.

Tom came on the line next.  He was also hardened..not very friendly.  His tact was to verify if this was actually a warranty issue.  In his opinion it was not.  I asked him if he could do it any way, and he said, “The Policy is…” and basically said, no.  Again, I agreed with him, understanding that he is not authorized to change the policy, but perhaps he could forward me to his manager, which he did.  I politely thanked him for his time.

Carlos was next.  he was genuinely polite, and seemed eager to help.  I explained my situation, which was well documented in his system.  I explained that the shipping fee for this type of item was high, and that the $25/each fee was out of my reach.  I asked if we could wave the fee.  Without question, Carlos said, “No problem, that is what we are here for.”  He is sending me a shipping label, sending me two new units, and will have my old units analyzed in order to report back why they are not working.

The outcome was predictable.  I was able to make this call on the speaker phone in front of my kids as a demonstration because I knew we would win this.  Staying calm, agreeing along the way once it is clear that the person I am dealing with is unable to make a change, and escalating each time, is the key.  This is great practice for selling.  Use these situations to practice dealing with difficult people and negotiations, and apply this to your selling efforts.

© 2011, David Stelzl

The Numbers Game

December 17, 2010 — Leave a comment

Time and Material billing focuses on dollars for hours, methodology focuses on process, and features focus on product.  All of this leads to a price sale.  From there expect to be sent to purchasing, pressed for discounts, and pushed off to the end of the month.  I love Michael Bosworth’s explanation of negotiation.  Once you give in, he explains, they begin to squeeze you like a wet rag until there’s no more water left.  But as long as there are still drips coming out, the squeeze continues.  It’s hard not to get caught up in this, especially when it’s year end, your manager is breathing down your neck looking for numbers, and you’re being treated like it’s a numbers game.  And the point should be made, smart selling requires a proactive approach.  You can’t wait until month end to begin selling value.

I’d recommend starting 2011 with a different mindset.  Consider things you can be doing to create some focused expertise and stop being a traditional sales person.  Become a consultant that sells.

© 2010, David Stelzl

Twelve things that define a consultative sales person

1. They improve the client’s position – a business level improvement.

2. Product is never the business driver; it is simply a tool being used in the improvement process.

3. Money is not at the center of negotiations, likelihood of successful improvement is.

4. Discovery is an integral part of the selling process; fees are not quoted until the project is understood.

5. The discovery process involves both technical and business people, and the sales person is intimately involved with each business discovery meeting.

6. The primary targets involve people who have predictable needs, not those shopping for widgets.

7. The projects show specific improvements in operational efficiency, risk levels, competitive advantage, or return on investment.  They are measureable and understood before the project is sold.

8. High-end consultants and engineers are part of the delivery process.

9. Projects are sold with a scope of work, not quoted as a line item with an associated discount.

10. They consider business people to be their peers, not IT.

11. They are continually learning, investing time in reading, and attending educational offerings.

12. They differentiate their offerings with intellectual capital, not discounts.

© 2010, David Stelzl

Will you Walk Away?

November 12, 2010 — 2 Comments

Will you walk?  I’ve been writing about fee setting, and no fee setting series would be complete without facing the reality of a failed negotiation.  If you’re not willing to walk away from the business, you have no business negotiating.  Once the client perceives your willingness to discount, they’ll require it as part of every deal.  Set your fees wisely, being honest with yourself, and your ability, and be consistent.  Everyone knows that car dealers are more willing to negotiate at year end, and that Cisco, HP, Sun, Oracle, (fill in whatever product company you sell) will do the same (Usually at month or quarter end) for any big deal.  Anything to make the numbers work.  So what have we trained our customers to do?  Wait.

Your job is the be the best.  Jim Collins talks, in his book, Good to Great, about the hedgehog.  Being the best, having the passion, and finally the economic engine.  When clients see your value and know your prices are fixed, they’ll stop playing games.  Michael Bosworth, in his book, Solution Selling, explains it like this, Once you start discounting, the client will continue to squeeze, like a wet washcloth, until there is no water left.

What’s the solution.  Be great, be willing to walk, and leave the client wanting you.  Then continue to market to them until they realize they really do need you.   In the long run you’ll waste less time, make more money, and have better clients.

© 2010, David Stelzl