I’ve seen some amazing negotiators who have personally bought houses, Ferraris, a garage full of home appliances, even school fees with great results.
The Ferrari buying ICT sales guy dined out for years on purchasing a $378,000 car for $192,000.
So why aren’t these superb outcomes translated into solid margins, reasonable delivery timeframes, and well managed variations when selling technology solutions.
Ah, because we’re selling now, not buying and they have all the power goes the refrain.
Really?
Let’s look at the core planks of good negotiation and see if they translate at work.
1. Planning
Many of you will have bought your own home or investment property and prepared very well.
You researched the market, looked at a lot of options, set expectations with Estate Agents and then at Auction set your walk away position which gave you a sense of structure and anchored your decision making.
Come Monday morning you have a client who wants to re-negotiate engineering rates, software licenses or volume pricing, payment terms and a bucket of ‘more for less’
As a negotiation coach, unfortunately I often don’t see the same rigor and planning in these clients meetings as might occur with a house purchase despite the figures over a three year ICT contract being similar or even greater.
Too often technology sales people have a 5 minute meeting to think about their pricing, competition and offer and then WAIT for the client to lead the negotiation. You are on the back foot.
Ideally you should have planned your own positions on these issues well in advance and negotiate from there.
2. Bundling vs Unbundling Solutions
When you’re buying a new fridge does the salesperson itemise each component eg additional crisper tray, stainless steel or white, additional warranty, delivery and removal of your old fridge?
What do you do?
Ask them to throw stuff in of course or decide that you’ll pick it up yourself to save $200. That’s $200 that had $100 margin in it for the seller.
Technology companies do the same thing to their detriment. When you itemise hardware, software, installation you invite the client to ‘pick off’ expensive items and ask you to throw it in.
When you bundle a solution with a quote that says ‘CRM Solution for Acme Inc’ $74,590, clients have less room to negotiate. You describe the complete solution and it then becomes a matter of proving its value, not its individually priced components.
3. Concession Trade
How many times have you traded in your personal life with ‘I’ll pick up the kids if you cook dinner tonight’ or ‘I’ll buy 2 dozen if you give me 10% off?’
It’s called concession trading based on the principle that you don’t give something away unless you get something back.
Back at work, rather than conceding on price for example, why not counter with ‘If we reduce the price by 5%, will you place the same volume order next quarter as well? Cash flow is another good one. ‘If we reduce the price by 5% will you agree to pay in 7 days?’
If you are going to concede in a negotiation, at least get something back in return.
In essence, take some of those great negotiation skills in your everyday life to work. The other party does not have all the power. You too can control how you negotiate. The results are amazingly rewarding.
Written by Elliot Epstein, CEO, Salient Communication
As CEO of Salient Communication, Elliot is a sought after keynote speaker and corporate trainer who has coached and trained over 4000 people including CEOs, senior management and successful sales teams throughout Australasia and Asia including Hong Kong and Singapore.
Elliot is a specialist technology sales speaker and trainer for high profile corporates having spoken at over 1500 conferences, workshops and break-out sessions on presenting, selling, negotiating and pitching for leading companies such as HP, Avaya, Commonwealth Bank, Hitachi Data Systems, Computershare and SEEK. He is renowned for ensuring presentations are engaging, interactive and relevant to winning business in competitive markets.
He is an advisory Board Member of Generation –e, one of Australia’s fastest growing IT companies.
Elliot is based in Melbourne where he lives with his wife and two expensive children
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Salient Communication Category: Sales Profile: As an authority in coaching sales people and leaders, we apply over 25 years of experience in business, sales and corporate consulting to over 4000 CEO’s, senior executives and sales teams throughout Australasia and Asia. Clients include Forbes 100, ASX 100 companies, BRW Fast 100 companies and award winning SME’s, all who use Elliot’s Salient Approach to get real world results and immediate ROI. Challenging the ‘cruise control’ thinking and old fashioned prescriptive methodologies of sales exec ...
