sales messaging

Try to Impress Your Prospect: Lose the Sale

By Paul McCord, President, McCord Training

Knowledge should be one of the most powerful tools in our toolbox.

Knowing how to use specialized industry vocabularies should also be one of our basic and power tools.

In reality, for many of us, knowledge and specialized lingo are powerful—in costing us business.

Naturally a great many new salespeople are tempted to try to impress prospects and clients by demonstrating their product knowledge and slinging their newly learned industry vocabulary around. They tend to oversell, answer questions no prospect has ever had, dazzle with words the prospect and client may not be familiar with. They talk about the fine points of their product or service; discuss how their service or product will impact ROI; how best to onboard new employees or products or services; how their product or service creates a new paradigm to address the prospect’s issues or needs; and the list goes on.

Impact ROI? I see, you mean whether or not it makes me more money than it costs. Onboarding new employees or products or services? I get it, you mean purchasing and integrating a new product or service or hiring and orienting a new employee. Creating a new paradigm to address issues or needs? You mean a different way of dealing with the problem, right?

You can say ROI, onboarding, or paradigm, or you could just talk to your prospect. Some say that if you want credibility with your prospects and clients you have to speak their language. I don’t have a problem with that in the least—if you’re actually speaking your prospect’s language. But how many prospects actually talk about onboarding a new product or service or creating a new paradigm to address an issue or problem? And there’s certainly something to be said about just talking to the prospect in plain English.

And very often new sellers butcher their newly acquired vocabulary and confound and frustrate their prospects with their enthusiastic demonstration of their knowledge of the minutiae of their product or service. Many lose more sales than they capture because of their lack of discipline and their need to impress.

Unfortunately I’ve noticed over the past three years that this desire to impress isn’t confined to new sellers. I consistently run across experienced sellers who should know better that are making the same rookie mistakes. The only real difference between these experienced sellers and new salespeople is experienced sellers tend to have a better grasp of the industry lingo.

In the current tough selling environment even experienced sellers are falling into the trap of trying to oversell and to impress with their knowledge and ‘deep’ understanding of the prospect’s issues. We tend to pull out all the stops and often end up losing our discipline and the prospect’s attention. We try to force the sale.

Rather than creating new clients, we end up alienating them.

Whether you’re a relatively new seller bursting with enthusiasm and wanting to impress your prospects or an experienced seller feeling the pressure to produce, you need to step back and relax. Giving in to the pressure to oversell and force the sale is self defeating. Address your prospect’s needs and leave the unnecessary demonstration of knowledge and the impressive vocabulary at the office.

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10 Commandments of Negotiations

By Daniel Adams, Principal and Founder, Adams & Associates

In my twenty-five years of selling, I’ve honed my theory of successful negotiations into ten best practices or ‘Commandments’. The Commandments are easy to comprehend; following them requires sales discipline!

  1. Know Who You are Dealing with
    Do your homework, know your customer, and know your competition. Make sure you investigate the personalities of all the players. Learn who your customers and competitors are as professionals. What is their negotiation history? What has been your competitor’s sales strategy? What solutions have they offered? Where? At what price? And with what terms?

 

  1. Negotiate Only with Decision Makers
    Sometimes an apparent decision maker is merely a ‘gate keeper’ in disguise. Ask probing questions to discover who is really in charge. One such question to ask is: “Who has sign-off authority for an investment of this size?” Refuse to negotiate with people who do not have the ultimate decision-making authority.

 

  1. Timing is Everything
    Do not negotiate if your customer is not ready to buy. Make sure your deal is fully baked! If you negotiate too early you will end up negotiating two, three, four, or more times. If you drop the price any time before the final negotiation, you will end up competing against yourself – a major mistake.

 

  1. Preparation – Review All Possible Scenarios
    Know all possible moves that the customer may make. Plan your move in advance in each instance. Be prepared to eliminate yourself from the negotiation, if necessary. Review the circumstances under which it would be necessary to walk away from the situation in order to secure long-term relationships and to protect your company’s resources. One great way to prepare is by completing a ’Trade Matrix’. A trade matrix ensures that you have planned ahead for a successful negotiation. In private – the customer never sees this matrix – you anticipate what might happen during the negotiations and what your responses will be.A completed matrix may look like this:

The Negotiation Trade Matrix

 

Give Value Get Can’t Touch this!
Extended Warranty $30,000 THE ORDER! Access to software code
Fast Delivery $50,000 Long term support agreement approved at time of purchase License Agreements
Extended Payment Terms $20,000 Multiple orders rather than a single order Deep price discount
Fast Installation $10,000 Sole Source agreement on next purchase Two week delivery
Training $12,000 Positive reference Three day installation
Accessories $20,000 Improved payment terms
Options $10,000 Access to senior executives
Consumables $12,000 Financing business

In column 1, ‘Give’ – you list all the items on which you could give a little, such as price, warranty terms, delivery timing, training, education, options, software, upgrades, and so on.

In column 2, ‘Value’ – you assign a dollar value to each of the ‘Give’ items. Remember, nothing is free. If you decide to give something to your customer, you must first make sure that he or she is well aware of its value. What if something – a quick delivery, for instance – has no price? The superstar finds a way to calculate the cost (to the superstar) and the value (to the customer) of providing quick delivery.

In column 3, ‘Get’, you list the items you would like the customer to give to you. At the top would be a formal, contingency-free purchase order accompanied by a down payment. Other items in the ‘Get’ column could include a long-term support agreement, accelerated payment terms, executive access, reference site status (many customers want to be a positive reference for other potential customers), and financing.

In the last column you list the items that the customer might request of you, but that are strictly nonnegotiable, such as software license agreements, the software code, and any request that could be deemed an integrity violation (for example, kickbacks, illegal requests, lying, and side letters).

The Lone Ranger is Dead
After you compile the trade matrix, review it in detail with your manager long before the negotiations begin. A superstar never conducts a major final negotiation alone. There are many reasons for this:

Customers do not believe that a sales rep has the authority to produce a great deal. Whatever the actual truth might be, they think that unless a manager is involved they will not get a bottom-line deal.

Two sets of eyes and ears can better pick up the all-important nonverbal cues coming from the customer.

The negotiations can get heated. By allowing the manager, at times, to take on the bad-guy role, the superstar can keep his relationship with the customer untarnished (“I wish I could give that to you, but my management won’t allow it”).

Throughout the buying process, the superstar has told the customer that the pricing provided is the very best she can do. If the superstar, in response to the “your price is too high” objection, suddenly indicates that she now has the flexibility to lower the price, this calls into question her integrity. The manager is there to quietly make any necessary concessions and close the deal. When faced with a customer who demands a price too early, the superstar can say: “At the appropriate time, my manager will assist us in reaching a mutually agreeable total investment that is tailored to your needs.”

 

Understand Your Contribution Margin – Don’t Drop Price
As a superstar you should never drop the price; instead, offer additional products or services that equal or exceed the requested discount. The impact of a price drop on your net income would be substantial, whereas providing a product or service decreases your net income only by the wholesale or internal cost (not the retail price) of that extra product or service. When choosing which products or services to offer in a negotiation, choose those with high contribution margins such as software, maintenance, and warranty.

Give Slowly and Reluctantly
During final negotiations, whenever you offer a price concession, do not make major reductions. Any major shift in price or position signals to customers that much greater concessions could be had for the asking. And believe me, they will ask. During my final negotiations for a software solution at one of the largest food companies in the world, the customer asked my manager and me for a price concession on our $18 million quotation. When my manager responded with a price of $8 million, I almost died. A drop of $10 million in the selling price after I had fought hard for more than a year to sell the value of our offering! What happened here? We lost credibility in the eyes of our customer. After all, what was the value of our offering if we could reduce the price by $10 million in three seconds? Who is to blame for the errors? I am, of course. As a sales superstar, I would have reviewed and rehearsed our pricing strategy to ensure that there were no surprises.

Never Negotiate Piecemeal
Have you met ‘Chip’ during your negotiations? Chip is an expert at piecemeal negotiations. Chip is the purchasing director who continues to ‘chip’ away at your negotiations, asking for one thing at a time rather than getting all issues on the table for review. Maybe it’s “Oh, I forgot, I need more warranty,” or “I’m assuming that you will be including five years of accessories and supplies.” This has the psychological effect of wearing the seller down. She never knows when the negotiations have reached a conclusion; she never knows what’s coming next. It puts the buyer in a much more powerful position.

To handle Chip, a superstar will insist that Chip put all his issues onto the table before addressing any of them. That way, one can assess what’s at stake and fashion an offer, which balances the totality of Chip’s requests with what the seller is able to concede. If Chip presses, an effective reply is, “I may be able to ask my manager to make some small concessions, but until I can entertain all of your outstanding issues, I will be forced to say ‘No’ to each of your requests. Certainly you can understand my position.”

Be Humble – Be an Advocate
Avoid flaunting your superstar status during the negotiations. If you let slip the fact that you are a veteran negotiator who has been through this a million times, you will feel a brick wall rising up between you and the customer. I like to say, at least in my head, “I’m just a caveman.” Present yourself as a non-expert (only with regard to the negotiation process, not to your product or service expertise). You will be astonished at how much the customer wants to help you. The negotiation instantly takes on a win-win feel when the customer does not feel vulnerable. Remind him that you are in this process together, working towards a mutually beneficial solution. Assure him that you will advocate for the best solution your company can offer.

Finalizing the Agreement
It would be a major mistake to make an offer to your customer and let him ’think about it’ for an indefinite amount of time. Each offer must have a mutually determined expiration date. Further, your offer must be all-inclusive. You must specify that any additional items not included in the offer will be available only at an additional investment. This way, you avoid piecemeal negotiation mentioned above, as well as negotiation after the fact. A good way to encapsulate these issues is to provide a Negotiation Follow Up Letter (see below).

Negotiation Follow-up Letter
The terms of any agreement along with the expiration date must be committed to writing in a negotiation follow-up letter. Have you ever heard this complaint from sales reps? “My customer let the expiration date pass, but still expects the same deal!” The fix for this problem is simple. You anticipate its occurrence and announce to the customer certain quid pro quo consequences: a price increase goes into effect as soon as the expiration date passes.

Let’s say that you convince the customer to provide a purchase order on or before December 31 as a condition of your concessions. The moment you agree to these concessions, you also explain that your company is depending on this business and that the concessions are dependent upon your receiving a contingency-free purchase order on or before December 31. If, for any reason, you do not receive the purchase order by that date, the price increases from X dollars to Y dollars.

You may be in a position to explain, “Our manufacturing floor has been loaded based on our agreement. With any change, we would be facing high inventory carrying costs. As a result, I need to make our commitment terms clear.” Or you might say, “Our special offer has been provided because your business is critical to our corporation’s ability to meet its financial targets for this quarter.”

Here is an example of a negotiation follow-up letter.

Adams & Associates
Mr. Lee Gannon,
Senior Vice President,
ABC Corporation,
18 Thorndike Road,
Wakefield, MA 01880.Dear Lee:This is a follow-up to our recent discussion regarding your new Imaging System project. Adams & Associates agrees to lower our price for the Imaging System to $1.5M.

As part of this price concession, ABC Corporation has agreed to the following: Contingency-free purchase order to be received on or before August 3, 2008.

Signed financing documents on or before August 10, 2008.

Delivery and installation of the XXX on or before September 8, 2008.

The special pricing and terms of this agreement are to be held in the strictest confidence.

We also agree that the price becomes $1.7M if the contingency-free purchase order is not received on or before August 3, 2008.

Thank you for working with us to construct an understanding that allows us to deliver an incredible overall deal to ABC Corporation. We are excited about the opportunity and appreciate your business.

Sincerely,

Ben

Benjamin Edwards
Cell: 630-555-1212

Does this letter stop the customer from calling to say he will not have the purchase order by the agreed-upon date? No, but it makes it very hard for him to do so. If he does call to delay, you are in the driver’s seat and can decide exactly how you want to handle the situation. The customer might say, “It was unavoidable. We tried as hard as we could. I’m sure you aren’t really going to raise the price on us, right?”  You can respond in a number of ways:

Review with the customer the letter containing the agreed-upon terms and remind him how much the delay will damage his company – for instance, “A two-week delay in signing the purchase order will cost you $50,000 in lost revenue, because the installation will also be delayed.” Use the higher authority close. Tell the customer you will check with your manager before responding to the request to keep the price the same.

Would you stand hard on the price increase outlined in your negotiation follow-up letter? Maybe, but I believe the more prudent move for a superstar interested in nurturing a long term relationship with her customer is to not increase the price. I would however use quid pro quo to get something of value from the customer, such as a commitment for future business, the purchase of additional options, an opportunity to meet with senior customer executives, financing, the purchase of additional support and maintenance, or a customer testimonial. “I understand the difficulties you are having. I wonder if you would be willing to provide certain concessions to offset the difficulties the delay will cause our company to suffer.”

Conclusion
Having condensed the art of negotiation into 10 best practice steps, this aspect of your selling will hopefully progress more smoothly and easily for you. If you follow these concrete suggestions, you will be on your way to superstardom in your sales career! Good luck to you, and remember, “Close ‘Em”!

mproving Your Speaking Skills: The Common Sense Factor

By Stephen D. Boyd, Ph. D., CSP

Have you ever been appalled at watching a sales presentation in which the presenter was chewing gum? It happens, as do other gaffes that you’d think common sense would eliminate. This article gives you tips and reminders on making common sense work for you in your presentations, from the obvious to more delicate matters you might not have considered.

Alan Alda, in his autobiography “Never Have Your Dog Stuffed,” tells the story of speaking to the Illinois State Legislature. He was asked to say a few words and did not consider the fact that many in his audience did not support his position on the Equal Rights Amendment. Even the consultant he was working with told him absolutely not to talk about the ERA.

He got carried away and did not read his audience well; he got off his topic and on to the ERA. His listeners began heckling him so much that the consultant crawled on her hands and knees to a place behind the podium, pulled on his pant leg to get his attention, and said, “Let’s get out of here!” He was not using common sense; his passion for his topic blinded him to the reality of the speaking situation.

Common Sense is Not Optional
You can obey the laws of the road and still not be a careful driver. For example, looking down the road in front of you to anticipate danger is common sense. Just looking at the rear of the car in front of you and not paying attention to traffic patterns down the road, shows lack of common sense.

Often what makes a presentation – sales or otherwise – successful is not a specific skill, but rather simple common sense. I’ve seen speakers do some very inappropriate things during a speech. These have nothing to do with content or delivery, but affect their credibility and the quality of their presentations.

No Apologies
For example, telling an audience as you start that you did not have much time for preparation is, unfortunately, common. That statement is an insult to the audience. You are saying, “I did not think enough of you to prepare adequately.”

Don’t tell us about your lack of preparation; we’ll find that out soon enough. And if the audience cannot tell, then you’re that much better off.

Unbelievable Goofs
I’ve seen speakers who chew gum as they speak. If you need to freshen your breath, take a mint so you won’t have to remember to get rid of it before you speak. Enough said!

Some speakers are completely unfamiliar with how to handle a simple slide presentation as they speak. Common sense says that if you do not know how to develop and use a PowerPoint slide presentation, then don’t use one.

Here are some suggestions for incorporating the common sense factor to ensure your success when speaking.

Anticipate the Speaking Situation
Visualize the speaking room, the location in relation to where you are, and the audience you anticipate. Doing this will help you make good choices about what time to leave in order to arrive without hurrying. Visualizing your audience can help you make reasonable decisions about dress and the choice of materials to include in your presentation.

Think through the experience of speaking to that specific organization. Doing this has motivated me to look up on the Internet ancillary groups and businesses to provide more background and context for my speech. The more you know about the group, the better your decision-making will be in regard to what you say and when to say it.

Get a Program in Advance
Ask the program chair in advance for a program of the events, which occur around your speech. This allows you to think about ways to connect your speech to something else that is happening in the speaking setting.

For example, knowing a theme or motto for the meeting or conference will help you understand what is important to the group that day and help you incorporate some aspect of the theme. If you see the name of another speaker on the program who stresses some of the same ideas you do, you can call him or her to discuss your approaches to the subject in order not to be repetitive.

Proper Pronunciation
Check pronunciation of proper nouns connected with your speaking situation. Does the group have an acronym connected with some part of their organization? You want to use and pronounce it correctly. Are there any unusual names on the program that you might need to pronounce correctly? Call a person who is in the organization to ask about correct pronunciation.

Many embarrassing moments at the lectern could be avoided if the speaker had used some common sense and asked the local person how to pronounce the name of the person, organization, or town. For example, if you are speaking in Lafayette, Indiana, you’ll say, “I’m so glad to be here in LafayETTE today.” But if you’re speaking in Lafayette, Tennessee, you’ll say, “It’s great to be in LaFAYette today.” Many speakers have nightmare stories about mispronouncing an important name, or, even worse, saying something derogatory about a connection with that very profession.

Be Alert to Your Audience
You might also ask this question, “Are there things about the group that I should know that would not be obvious to me?” Another question that can increase your common sense quotient is, “What advice can you give me to have a great program?”

Accept the notion that not everyone may be as excited about your topic as you are. Watch the group carefully for signs that you may be pushing your topic too hard. Make sure they understand the importance of your topic without pressuring them to accept your position.

Honor the Time You’re Given
Our culture is very sensitive to time. We don’t want to be late for an appointment and we don’t want to overstay a visit or interview. Use that same common sense approach in speaking. Arrive early enough that the person in charge is not at the entrance looking for you.

Find out how long you are to speak and then determine to speak a couple of minutes less than the time mentioned. For speakers to continue on past their designated time may destroy any credibility and goodwill that they may have developed.

Delicate Matters
Take the time to practice your material in front of a friend or colleague. When you finish, ask if there is anything that would be offensive to the audience. Ask that person for advice on how to handle any delicate matter so that you can ensure good judgment about how to cover certain issues or to leave them out altogether. If it is a speech you have delivered several times before, but you are adding new material, practice the new material in front of someone to get feedback on it.

Finally, don’t try to be perfect; this puts too much pressure on you and skews your good judgment under the pressure of the moment. Accept the reality that you will make mistakes and that this is just a part of being human. Common sense is a basic part of successfully relating to your audience, speaking and acting in a way that will not distract from the content of the message you are delivering.