Planning for Tough Conversations Leads to Negotiation Success per Joanne M Smith, Ep #336
Joanne M Smith believes that negotiation preparation in 2023 will be more critical than ever. Why? Because change is happening. We\u2019ve been in an easy negotiation market. She points out that we\u2019re looking at a potential recession where pricing power is going to shift away from suppliers and into the hands of the customers. That\u2019s why she believes salespeople need to plan for tough conversations. Learn what that looks like in this episode of Sales Reinvented!\xa0
Outline of This Episode- [0:45] Why planning and preparation is an important step in negotiation
- [1:45] The key steps a salesperson should take to prepare for negotiation
- [5:02] The attributes or characteristics that make a great sales negotiator
- [7:16] Negotiation planning tools and resources to improve B2B negotiations\xa0
- [9:24] Joanne\u2019s Top negotiation planning dos and don\u2019ts
- [13:27] Planning for tough conversations leads to negotiations success
The best economists believe that we\u2019ll see a recession within months. When it happens, a salesperson\u2019s job will become harder. You have to adjust your strategy to be fair in the economic conditions you find yourself in.\xa0
Make sure you have a rationale for whatever your price point is. Does your industry fairly deserve more? Are you in a position where you can increase your prices?\xa0
Your leadership must look at macroeconomics, supply and demand, and the cost of inflation, and give you crisp strategies with real talking points so you can have tough conversations.\xa0
So how do you prepare for tough conversations in a negotiation?\xa0
Ask yourself, \u201cFor this deal, what are the toughest questions that I\u2019m likely to be asked related to my offering or to my price?\u201d In many cases, the questions\xa0will\xa0be price-oriented. When you ask those questions, you know the data you need to prepare to craft a satisfactory response.\xa0
The attributes or characteristics that make a great sales negotiatorA salesperson needs to be comfortable with tension and willing to respectfully enter into price discussions. They have to be able to guide the customer toward a better solution they might not be aware of. If you\u2019re going to be confident, you must prepare.\xa0
Joanne asks everyone she trains: How do you self-rate on price negotiation skills and confidence? 90% of salespeople think they\u2019re great at sales and feel like they\u2019re mediocre at best when it comes to price negotiation.\xa0
She emphasizes that you have to take a step back and realize that you don\u2019t know enough and start learning. Set up some frameworks to make it easy to prepare and effectively negotiate that price.
Top negotiation planning dos and don\u2019tsJoanne shares some great tips to keep in mind when you\u2019re negotiating:\xa0
- Recognize that every deal you do isn\u2019t done in isolation. Every deal sets up the future for you and your customers and the way your competitors respond. If you over-discount one customer, they\u2019ll tell your competitors. So your competitors drop their prices. It creates a negative snowball effect.
- Make sure you have a walk-away price. Don\u2019t agree to a low price because it disrupts everything moving forward.\xa0
- Make sure you know why you deserve the price and can stand behind it.
- Salespeople believe they have 50% or more price buyers that don\u2019t care about value and will simply buy the lowest price. Don\u2019t fall for that
- If someone doesn\u2019t want to pay your price, let them walk away. Or, take away some value to give them a lower price.\xa0
Joanne was working with a global business in the construction space. They had a clear and fair reason to raise their prices over the last year. But their sales team wasn\u2019t confident and was afraid they\u2019d lose sales. Three different regions started training with Joanne. The European branch decided they didn\u2019t need training. What happened?\xa0
The three regions that completed the training got their price increases with high success and little to minimal share loss. The region that didn\u2019t complete training had a 30% share loss in their largest country. Her workshop covered negotiation\xa0preparation. They prepared by practicing responding to tough questions. It goes to show that preparation will always be key.\xa0
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