Negotiation takes on a new definition in the diagnostic process which centers on clear and precise communication and collaboration — a continual series of “mutual agreements and understandings.” A collaborative approach eliminates dependency on traditional closing and objection-handling skills.
By the time a customer receives your proposal, you and your customer will have come to common conclusions and a common understanding of all the key elements that would otherwise be subject to objection or negotiation when there are surprises in the 11th hour. You will have agreed on the nature and financial impact of his problem, your mutual expectations, the financial value of the solution, and the selection criteria for a high-quality solution. In short, the customer will have agreed to each element of a quality decision process and will not be seeing any new “terms” in the proposal to which to have a reason to object.
Let’s take a deeper look at this quality decision process. The first decision element revolves around the customer recognizing that she is experiencing some consequences due to the absence of the value your solution could provide. Consider the feature of your solution that you believe has the most value and competitive strength. Ask yourself, “What would the customer be experiencing without this feature? What would she physically be able to see in her business that would show me and her that she is experiencing the absence of this value?”
Think of yourself as a doctor. You are looking for the symptoms of the absence of business health in your patient. Relative to negotiations, the symptom either exists or it doesn’t. You and your customer will reach agreement on that quickly, and if the symptoms exist, you will move on to the next decision: “What are the consequences of the symptoms?” or “How bad is it?”
The next decision revolves around determining the financial impact of the problem. It is important to bring your customer a process that will guide him through measuring the financial impact of his problem, just as a doctor brings the capability of running tests to determine the extent of the symptoms. We refer to this as the “cost of the problem.”
If you don’t have a cost of the problem, there isn’t a problem. In other words, if you can’t help your customer measure the financial impact of the problem your solution will address, she will be unable to measure the value of your solution, likely not want to buy your solution at all, and very likely not want to pay the price you will ask.
When the cost of the problem is agreed on, the next decision for the customer is “Is this bad enough to take action?” When the customer compares this problem and its costs to other problems he has or opportunities he has to invest in, where does it stack up on the priority scale?
When these decisions are mutually agreed upon, we have “negotiated” away a high percentage of the objections we would traditionally hear and those that might lead to a “no sale.” A large number of objections occur because the customer receives a presentation or proposal before these decisions are made — a “premature proposal.”
Think about it. How many times have we given customers proposals before they decided they really had problems? They were only “interested” in the solutions we had. How many times have we given proposals to people who said they had the kinds of problems we solved, but they did not know how much those problems were costing them? Finally, how often have we given proposals to people who had the problems we solved but who had not decided that they were top priorities to address?
When these decisions are made, the customer has decided to take action. And it’s now time to co-design a solution. There are six main decisions to be made regarding the design of the solution:
- What does the customer expect the results to be if she goes through the effort and expense of addressing this problem?
- What does she want her situation to be after a solution is in place?
- What is the best alternative or approach to achieve these expectations?
- By how much will the solution reduce the financial impact of the problem?
- How much money should I invest to make these expectations occur?
- What do I need to measure and compare to ensure the solution will work?
The key to successful negotiations is that each party is well informed and understands his or her respective mutual interests. You are working towards an equitable exchange of value and a continuing relationship. When you reach agreement on each critical point of the exchange, as each emerges during the decision process, you have brought great clarity to the relationship. The foundation of the diagnostic approach is that it is easier to reach clarity and agreement on many small points than on a single summary of all those points.
If you pattern your sales approach after a quality decision process rather than a sales process, you will be able to stay away from “premature presentation,” and most likely you will not be a victim of 11th-hour negotiations.
About the Author
Jeff Thull is a leading-edge strategist and valued advisor for executive teams of major companies worldwide. As president and CEO of Prime Resource Group, he has designed and implemented business transformation and professional development programs for companies like Shell Global Solutions, 3M, Microsoft, Siemens, Citicorp, IBM, Raymond James, and Georgia-Pacific, as well as many fast-track startup companies. He has gained a reputation for being a thought leader in the arena of sales and marketing strategies for companies involved in complex sales.
Thull is a compelling, entertaining, and thought-provoking keynote speaker with a track record of over 2,500 speeches and seminars delivered to corporations and professional associations worldwide. He is the author of the bestselling books Mastering the Complex Sale: How to Compete and Win When the Stakes Are High, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale, and Exceptional Selling: How the Best Connect and Win in High Stakes Sales. Thull is also a columnist with Inc.com, and his articles are published in hundreds of business and trade publications.
For more information contact Prime Resource Group at firstname.lastname@example.org; www.primeresource.com; 800-876-0378; 763-473-7529; or 3655 Plymouth Boulevard, Suite 110, Minneapolis, MN, 55446.