What if I told you that just by focusing on improving your teams’ price negotiation muscles, you can improve your topline by 2 or 3%, maybe more? What would this mean to the profitability of your company? What would this mean for your own compensation? Here are three simple but powerful backbone-building resolutions that will help your teams work smarter, not harder, in 2016:
1) Save your energy for real opportunities – Let’s agree that not every opportunity is a good opportunity and some you just cannot, and should not, win. Why? They simply cost too much for you and for your company with too little in return. They suck valuable resources away from more profitable customers. Develop 3 simple questions for your teams to ask in the qualifying process to ferret out the opportunities you have a chance of winning, and those you don’t. For example: Do you have a relationship with the decision maker? Who is the competitor in this situation and who is the front-runner? What are your advantages that make you a clear winner for the customer? Beware if the answers are “no” or “I don’t know.”
2) Commit to understanding and articulating value. What makes your product or service better than a competitor AND what does it mean to the customer? Give your teams a price negotiation power-boost by being more insightful and clear in communicating the financial benefit to the customer of using your product or service. With this information, your teams can articulate the appropriate framing for your offering, the financial benefits of the offering, and justify pricing.
3) Check your ego, but not your confidence, at the door. Sometimes our ego can cause us to make decisions that might not always be the rationale choice. Ego causes many of us to pursue large accounts we can’t win. We may be caught up emotionally in negotiations and give up price because we’ve “come too far to lose.” We might also find our egos soothed by being labeled a “strategic partner,” only to find we are giving that customer the biggest discounts. Strategic for whom? Instead, build confidence in sales teams that the qualifying process identifies the right opportunities they can win, that the value makes them a clear winner, and the pricing is fair and profitable.
Start with these simple, yet powerful changes and you will see improvements in your selling outcomes. Here’s to wishing you a happy, profitable 2016!