Even if you work for a national retail chain, your sales process almost certainly involves some level of negotiation.
At what point in your interaction with a prospect do your negotiations typically begin? Is it when the conversation turns to commercial terms such as price, payment options, delivery, financing, warranties and contracts?
Sales Negotiations Begin the Moment You Say ‘Hello’
Every step in your sales process — from your first conversation to signing the deal and delivering or implementing your offering — involves a negotiation.
You’ll be better off if you recognize the constant importance of negotiating from the start of every new relationship with a prospect or customer.
I learned this perspective from Jim Camp, my mentor and coach in negotiations, who’s written two contrarian and insightful books on the topic.
I first found Jim when I began selling deals in the range of a million to fifteen million dollars. Our customers were all expert negotiators. We often worked with their purchasing departments — the best of the best at wringing every possible dollar out of their vendors.
I had no skill or training in negotiations, and none of my sales management had any training. Most had more experience than I did, but I came to see they didn’t have much more skill or knowledge.
We were shooting from the hip, and our customers regularly ate our lunch.
A Selling Skill with a High Return on Investment
I saw that if I could save just five percent of the revenue we were giving up on a deal worth several million dollars, I could put tens of thousands of dollars back into my commission checks.
For the amount of money my sales managers often negotiated away in less than 60 seconds, we could have paid the salary of two full-time sales people or a software developers.
When you think how much money you can earn in an hour, I don’t know of many selling skills that yield a higher return on your investment of time and energy.
Self Instruction Sure Beats Ignorance
Once I decided to make the investment, I bought and read (or at least skimmed) more than 28 books on negotiating. I also listened to audio lectures by celebrity negotiations experts such as Chester Karrass, the man who still advertises his seminars in in-flight magazines.
All that studying taught me a great deal. I also learned a lot from the six lawyers in my family. Yet I still found it hard to apply all the principles I’d learned.
And Nothing Beats Coaching
I’d read one book that stood out from all the rest. Jim Camp’s Start with No trumped all the others for ideas that I found to be practical, thought-provoking, unconventional and particularly effective for sales people.
Jim was the only one of 28 authors who also presented himself as a coach who’d built a business around working with clients through specific negotiations.
Jim and I worked out a deal for him to help me through a big opportunity I was working on. I credit him with helping us negotiate through the twists and turns of one highly competitive deal that brought us more than $14 million in revenue. It paid our small sales team more than $500,000 in commissions.
After proving his value in such a credible and tangible way, Jim became my main source of inspiration on all topics related to sales negotiations. He’s since written a second book and released a series of audio CDs.
Recently I’ve had fewer big deals to work on (Ouch!) and have gone back to prospecting much more. It’s been a struggle.
Even Cold-Call Prospecting is a Negotiation
I hate prospecting as much as any other sales person. At one time I’d gotten pretty good at it, but I got fat and lazy during the many good years when business was solid without having to do so much hard work.
So far my return to daily prospecting has produced more procrastination, anxiety and self-doubt than new business. I’ve been looking for good tips on how to do it better.
It happens that one of Jim Camp’s CD sets is on the topic of prospecting and cold calling. I’ve listened to it three times this week, and already I’m feeling more confident and productive.
Jim says prospecting is nothing more than a negotiation for the prospect’s time and attention.
That’s a liberating perspective.
More on this next time.
Stay fresh.
– Scott Silverback