Sales Leadership Interview: Great Expectations
I recently spoke with Ginny Brach, Senior Vice President of Dun & Bradstreet. We discussed negotiating sales deals: setting expectations, knowing when not to say “yes”, holding back, understanding the prospect and the importance of preparation.
Negotiations – “it’s all about expectations”, according to Ginny. You don’t want to start negotiations with the other party believing you will over promise. This would cause you to disappoint them. She said, “You need to be realistic in what you can/can’t do.” Be clear upfront by discussing what a “walk away point” would look like. “It’s better to (walk away) early on before they’ve invested time and money” than to try pursuing something that won’t be able to be worked out.
When Not to Say “Yes”
It may be tempting for team members to say “yes” to please and accommodate the issues of the client. Your reps simply want to move things forward if they really need the sale to meet a target or annual goal. You need to remind them how to treat potential partners/clients, in terms of expectations.
When a rep says “yes” in error, you may have to be the bad guy and reset expectations in terms of what you can or cannot do. You need to take responsibility for the person on (your) team who made the error. You then need to see if you can work past, what Ginny calls, the “rough spot” or walk away.
Richard Harroch (Forbes) says, “…continually conceding points (while not getting anything in return) can lead to the exact opposite of what you are hoping for.” Ginny echoed this and indicated that sometimes it is best to tell the customer “no” based on what they want. You may need to tell your rep, as Ginny says, “hold on, they’ll come back, but we’ll have to leave it with them.” Then tell the customer, she adds, “if this is a condition you’ll be able to live with feel free to re-engage, but it needs to be under these conditions.” When you do this you’ll be more respected for dealing with the situation that way.
Transitioning from dealing with the business owner to dealing with procurement can be challenging. As Ginny says, it “depends on how solid you are with the business owner.” They need to differentiate between you, as the desired provider, versus who might be in second or third place. When the business owner does this, your strong value prop will stand up in negotiations with procurement. Of course, the buyer’s job is to get something additional. Don’t give everything upfront in the initial offer. Even soft things like adjusted terms and conditions will work. There are other options, but, she says, “It’s important that the (procurement) entity feels like they’ve done their job”. This makes it important to save something to give them. It shouldn’t be a
Of course, the buyer’s job is to get something additional. Don’t give everything upfront in the initial offer. Even soft things like adjusted terms and conditions will work. There are other options, but, she says, “It’s important that the (procurement) entity feels like they’ve done their job”. This makes it important to save something to give them. It shouldn’t be a price-cutting game. “You’ve got to sell on value, not price”. In some
In some cases, it’s important for the buyer to bring something to the table. Find out, in advance, what is important to them. Ginny says, “If they’re too aggressive and you’re both taking a stand, then you need to go to the owner.” Reevaluate and ask the business owner to get involved.
Understand the Prospect
According to Richard Harroch, in Forbes, you must “gain an understanding of what is important to the other side, what limitations they may have, and where they may have flexibility.” Understand what they need. For example, some buyers don’t want too many savings in a year because the next year they’re expected to acquire more savings than the previous year. Here, you’d want to hold back a bit to help them do their job in future years.
You also must understand their buying process and the buyer to business owner relationship. As Ginny said, “Who thinks who is supporting who?” Although procurement may be negotiating the deal, the business unit must live with the final selection on a day-to-day basis.
As a result, she added, “their opinion weighs more heavily than the person negotiating the contract terms.”
Preparation is Everything
When preparing for a meeting with C-level execs, Ginny says, “I think a lot of it stems from the pre-call discussion.” She continued by saying that meeting with C-level individuals is “about solving business issues and eliminating risk or providing an opportunity for growth.”
To prepare, you need to look at all that your rep has been able to discover or what you plan to discover during the meeting. Ginny indicated that “You need to look for what the client is looking to solve.” These meetings are not about product. They’re about creating solutions for the customer. She added
She added that “[you’re] coaching upfront…who are they meeting with, and what does that meeting look like?” Preparation is key. “For a 45-minute meeting, you could put in 10 hours of prep. If you’ve got that big of a meeting, to be prepared is everything.”
When negotiating substantial deals you must set expectations at the outset so all parties understand when to walk away. You need to know when not to say “yes”, where to draw the line and how to set conditions with the customer. You should know what to hold back for the final stages of negotiations too. This is why understanding the prospect’s needs and internal workings is important. Of course, don’t forget that preparation is everything when it comes to C-level meetings and negotiations!
- Do you set expectations at the beginning of negotiations?
- How do you work through “rough spots” during negotiations?
- What do you hold back to give for final negotiations?
- What else do you seek to understand for successful negotiations?
- How do you prepare for C-level meetings?