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Printer FriendlyPlanning for Negotiation
This free material is aimed to help readers ability to plan for a negotiation and it can also provide useful preparation for negotiation skills training.
Copyright Spearhead Training & Verlag Norbert Muller
1. Introductions
Why Prepare Sales Negotiations?
"I'll just go along and see what happens! Nowadays the wishes and requirements of clients are so diverse - and anyway, it's the terms which are the most important. So what else should I prepare?";
With an attitude like that no wonder certain salespeople don't rise above mediocrity and get the profession of selling a bad name. Then they blame their company, the circumstances and the alleged bad terms of business for their lack of success.
Good preparation is at least half the battle
What is it that today makes the thorough preparation of sales negotiations so necessary and yet at the same time so difficult? What is it that is driving professional sales representatives to prepare for each client visit in such detail?
We live in times of great change, the pace of social, political, cultural and course business change is probably moving faster now than at any time in history?
These are some of the forces affecting sales:
The overall quality standard of products and services is constantly increasing, which brings about an ever-greater exchangeability of both products and services. The customers are looking for better deals.
Discussions about prices and terms are increasingly at the heart of negotiations.
More work and responsibility is passed to the field force as organisations reduce overhead. Companies have flatter organisation charts, people work in smaller teams and the sales department has to take on additional tasks e.g. after-sales service.
Mergers and commercial agreements are reducing the number of openings to which one can sell. Sales representatives have to take on larger account responsibility.
Buyers are being trained to negotiate in seminars and training programmes and expect qualified negotiating counterparts.
If there is insufficient return on capital employed or too little regular turnover you will get de-listed.
Costs per sales visit are constantly increasing. Travel gets faster, yet congestion gets worse.
Companies' different product ranges are being carefully orientated towards profit goals and no longer exclusively towards turnover goals.
Data and information systems are making economic efficiencies more apparent.
Variable gross margins, cost-saving measures, time and delivery advantages have become decisive sales criteria.
The constant movement of executives, particularly within the larger companies reduces habitual buying. Contacts are becoming less important than professional competence.
Supplier rationalisation measures, possibly due to the trend to buy complete systems from one source, are at the forefront of many company decisions.
Investments are being made in a more thought-out manner.
Staff and overhead costs are increasing.
All of this, the current business scene, has consequences for sales executives. To survive and prosper they must:
Know the market better, adapt to new trends and be prepared for change.
Be able to calculate.
Use working time to the full.
Carry out the necessary number of visits to secure the volume of trade and make sales target.
Refine their work schedule and thereby save time.
Be able to use data processing facilities and influence decisions through expert advice.
Find and talk to the right negotiating partners.
Work with short, medium and long-term goals.
Know what the competition is doing.
Understand and be financially aware of the client and business in general.
Streamline administrative duties in order to gain more selling time.
Be better informed - know and anticipate the client's mind.
Be able to analyse and interpret market figures.
Establish and maintain contacts with all branches of commerce, trade and industry.
In short the market demands a more thought out professional approach from sales people. Sales executives working in the field must be experts, specialists who are able to answer all questions concerning their products, clients and markets.
How can you match up to these demands?
The solution: Plan and prepare every client visit and sales negotiation sensibly and systematically. Sensible methodical planning leaves no detail to chance and leaves you prepared for any eventuality. Pre-planning helps free your mind to concentrate on matters as they arise. You are in better control of the meeting. Most good negotiation skills training courses concentrate on the importance of pre-planning.
This is particularly relevant for those selling to the larger (key) accounts. Over the course of the last decade changing tastes, the growing concentration of conglomerate power, global buying, the supermarket chains moving towards increased own label marketing, businesses employing fewer executives - all these forces have concentrated buying power. These more powerful buyers are matched in supplier companies by better marketing, commercially viable sales strategies. This has led to the creation of Key Account Executives/Management to work with these larger-scale clients and develop business and marketing strategies together.
These are designed to facilitate the translation of what you have just read into your daily work practice. Please start as we mean to go on by now completing the following five-minute test.
1.2 Five minute test
Do you honestly prepare your client visits and business negotiations to the best of your present ability?
This test should indicate where you stand vis-à-vis visit preparation. We have put the scores alongside (there is no point being less than 100% honest as you only fool yourself). If you score 120 points, you're almost perfect - congratulations! But even so, you will surely still find a few worthwhile ideas, which will help you, improve your preparation for client visits. One idea will repay your time with this programme year in, year out.
TEST
(1) Do you note down the key words of all the important points to be raised during the negotiation beforehand?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(2) Do you keep yourself informed of all the important commercial data
concerning your client (product turnovers, outstanding debts, prices,
unfilled orders)?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(3) Do you note down a concrete order proposal for every product or service, detailing quantity and price, which you want to submit to the client?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(4) Do you consider beforehand what kind of documents you will need for
negotiations (patterns, market studies, official documents, test reports, etc.)?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(5) Do you try to get together an attractive package for your client (such as
newspaper cuttings, photos, advertising ideas, cost-cutting suggestions, etc.)?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(6) Do you think of any objections the client may have to your offer and how best to counter these?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(7) Do you ever consider how you would react to a client's complaint?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(8) Do you plan the opening of negotiations carefully (welcome, informal
chit-chat and the lead into the business at hand)?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(9) Do you make a mental note of the names of your client's closest colleagues, so that you can greet each and every one of them when you meet them?
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______
(10) Do you make notes after every visit? (If on the client's business card minus 5 points - unless transferred to a better data record, data file, report form, organiser, electronic notebook or something which will help you prepare for the next visit).
Always …… (15 points)
Sometimes …… (10 points)
Seldom …… ( 5 points)
Never …… ( 0 points) Score _______#
Assessment
Over 120 points = Excellent
Between 95-120 points = Very Good
Between 70-94 points = Satisfactory
Under 70 points = You will be particularly glad you decided to read this article!
2. Goals
"Whoever doesn't know where he wants to go mustn't be surprised when he doesn't get there"
An old truism, certainly, but unfortunately one which is ignored by many sales people.
The preparation of client visits and sales negotiations is, basically, all about goals, or to be more precise, about answering two questions:
What do I want to achieve with a specific client?
These considerations normally comprise two goal areas:
a) short-term goals, which can usually be achieved during the first visit.
b) long-term goals, which can be achieved after several visits.
2.1 Short-term goals
In the consumer goods industry short-term goals can be, for example.
• New product - Sales
You want your client to take up or use a new product, which he is not currently using or offering his customers.
• Promotion - Sales
You want to persuade your client to endorse a current advertising campaign or to offer his customers special offers.
• Display - Sales
You want to bring your client round to the idea of a display or second facing, in order to increase the sale of your products. (Note: facing is a term used for shelf display of products in a supermarket).
• Merchandising
You want to persuade your client of the attributes of a certain sales promotion idea for example, the resituating of your products on the shelf, in order to improve turnover and consequently the return on capital.
2.2 Long-term goals
Long-term goals are those which cannot be achieved in one visit alone. You must try to come closer to the realisation of your goal by means of a step-by-step approach.
This includes goals such as:
- Ensuring the distribution of your products
- Avoiding being out of stock
- Ensuring the best possible presentation of your products
- Ensuring the use of systems and follow-up systems
- Correct staff management, to ensure your products are properly used, integrated into the market, sold, regularly ordered and correctly price-tagged.
- Accumulation of know-how about your product area, work flows and business results.
When you are selling capital goods or having to fight for large orders the first visit is not usually enormously successful. Set yourself a goal for each meeting - a different goal for each step (a sort of intermediate goal). Build up these goals until you reach the end.
Intermediate goals can be:
- Establishing contact with particular people or departments.
- Gathering information which could facilitate the compilation of a detailed offer.
- Compiling an analysis of requirements and informing clients
- Fixing a presentation schedule.
- Discussing the format of the presentation.
- Arranging a test with clients
- Inviting the client
to your own company
to a trade fair
to an exhibition
to visit another client who is already using the machine or who is already
successfully selling your products.
Set yourself a working schedule for negotiations with large-scale purchasers, which provides information about the dates and times of negotiations:
- with which members of the management, purchasers and engineers
should contact be made?
- Which methods should be used? - for example, requirements analysis,
study of the workflow, interviews with company chairperson
- Where will the demonstration be held? How will the offer be presented?
- Who will participate in the concluding negotiations?
Draw up the first intermediate-goal plan as soon as you know whom you want to talk to. Of course, your interlocutor can be purely hypothetical. Whatever the case, this will save you time and avoid costly prevarication. It is better to correct and refine a hypothetical plan than to be completely in the dark.
If you are interested in developing your negotiation skills further, please view the details of our negotiation skills training by clicking on the link.
