Negotiate from a position of strength— Sell the financial advantages of your product or service
It’s a buyer’s market. Anyone in sales can tell you that. As a result, a lot of salespeople are stuck in unproductive sales cycles in which they sell against competitors feature-by-feature in a cost-driven process. That’s a sales strategy designed for failure. If you are the low-cost leader today, someone else will replace you tomorrow. And, if the features you offer are unique, they won’t be for long. In today’s hyper-competitive environment, successful features spread faster than viruses.
To negotiate and close profitable sales deals today, you have to change the way you think about what you offer and who you target within a prospect’s organization. And if you believe you can do this based on the strength of your account relationships, you’re going to be disappointed.
Understand the real barriers to sales
When sales are lost, it’s usually not for the reasons that salespeople think. Most sales reps will attribute lost sales to a critical feature they couldn’t provide, a lower price available from a competitor, or even a rigged bidding system engaged in for show when the decision was a foregone conclusion.
But usually none of these reasons apply. Most sales are lost for three reasons:
- The sales pitch did not address the prospect’s “pain points,” or critical business issues
- The person who had budget authority was not involved in the sales process
- The sales rep did not follow established sales best practices like solution selling, spin selling, value selling, strategic selling and challenger sales
Critical business issues (CBIs) are those issues which are most important to the person with budget authority. These are probably not the same issues that are top-of-mind for the operations person who may be your first point of contact at a company. For example, if your product is software and your contact is the manager of a data entry department, a critical issue may be the ease of use of the application’s interface. This will not be a pain point for the person with budget authority who will undoubtedly be concerned with issues such as efficiency and ROI.
In order to solve a company’s “pain points,” you have to identify what they are. To do this, you will need to research your prospect’s company and industry.
To identify the critical business issues for the person with budget authority, you will need to conduct research. The goal is to uncover the “hot-button issues” facing your prospect and its industry. Look for information on the company’s website, news releases, 10-K’s and annual report. If you have a subscription to Hoover’s or another industry database, educate yourself on the issues that are important to your prospect’s industry. Read trade publications. Arm yourself with as much information as possible. Then identify how your product or service addresses your prospect’s most critical business issues and either creates revenue or reduces costs. In other words, hone in on the financial advantages that you offer.
Sell to the right person – on the right issues
Once you have identified your prospect’s critical business issues (CBIs) and determined how your product or service can effectively address them, you have earned the right to negotiate with “Power,” the person with budget authority. But wait, you’re thinking, that’s not where my sweet spot is. I’ve spent years cultivating relationships at the middle-management level of organizations. Customers love me. Well guess what? The world has changed and those relationships won’t help you if the person with budget authority doesn’t see the value of what you offer. Whether you realize it or not, your customer is not the guy who implements your solution. It’s the person who holds the purse strings. So unless you want to become irrelevant, you need to target the person with budget authority with a well-prepared, financially driven sales pitch.
In order for your pitch to be successful, you need to:
- Keep your presentation short and direct
- Be clear about how your product or service addresses a pain point for the organization
- Focus on the financial advantages of your offer
Getting the attention of the person with budget authority is a game-changer. Sales processes don’t languish and funds have a way of appearing if you have convinced this person of the value you offer.
If you do these three things, you will have the executive’s attention and will be in a very strong negotiating position. Now, your solution will not be evaluated relative to features and price points. Rather, it will be evaluated on how well it solves critical business issues felt at the executive level of the organization.
When you position your product or service this way, you eliminate the need to reduce your price. You also reduce the risk that the decision will be to not move forward at all. Once you have the attention of Power – and you have convinced this person of the value you offer - the sales process will move forward much more quickly and the funds that are needed will be made available.
So how do you convince Power of your value? Be very clear about the ways in which your product or service will help the company either make more money or reduce costs. The more significant the opportunity or savings, the more compelling your case will be.
Reap the benefits
While this approach to selling is more time-consuming up-front because of the research that is required, it actually reduces the length of the sales cycle because you have involved the person with budget authority early in the process.
Strategic selling in this way is both liberating and empowering. Focusing on the economic advantages of your product or service enables you to rise above the feature-by-feature comparisons and pricing wars that are characteristic of the typical sales process. You will be in a stronger negotiating position because you know the value that you offer to the prospect. As a result, you will be empowered to negotiate and close more profitable deals than you ever have in the past.
Jeff Koser is the founder and CEO of Selling to Zebras, Inc., a leader in sales enablement software and sales acceleration. Selling to Zebras teaches sales professionals how to close 90% of the business they pursue with greater ease, speed and profitability. The company provides sales tools, sales software, go to market and sales management support to help companies achieve considerable sales productivity. Selling to Zebras has helped countless companies achieve their sales goals.
Jeff Koser describes the Selling to Zebras sales process in their award-winning book, Selling to Zebras. Their most recent book, Selling to Zebras – The Untold Story for Salespeople, tells the story of Kurt Kostner, the dedicated vice president and general manager of C3 Technology, who has been given an ultimatum: Turn sales numbers around in 90 days or pack up your things. It is available as an e-book on Amazon.
"This article was originally published in SOLD magazine, a monthly digital sales magazine for sales professionals."