Pep up your sales skills

Negotiating with Backbone: Eight Sales Strategies to Defend Your Price and Value, by Reed Holden

With 2015 just begun, it is an appropriate time to improve your skills, and Negotiating with Backbone is an excellent way to polish your business-to-business selling expertise.

If you are a seasoned sales person, you will be refreshing skills you already possess and will undoubtedly learn important new techniques.

Holden’s book differs from the plethora of books about selling in his interesting categorisation of buyers and the roles sellers play. Many books on selling assume that one model will work for all customers. Only part of this is true. This may account for the lack of success experienced by so many salespeople.

The “procurement pricing buzz saw” is the “new normal”. Companies have been forced to reduce costs and, as I explained in a previous column, the procurement department is an obvious and often untapped source of easier profit. Expecting another 10% from new product development is a long and expensive process, and wringing out even more production efficiency is fast becoming extremely difficult.   

READ: How profits vanish

Holden identifies four types of buyers. Sellers are divided into those who have an existing relationship with the buyer, and those who have no relationship as yet.

The first of the buyers is the “Price Buyer”. The best of these are very clear about the specifications they require, the use the product or service will be put to, and the capabilities they demand from the seller. The best will be fair and open.

Prior relationships carry little weight, and the existing seller will be replaced by any provider offering a better price for the very accurately specified goods or services.

What type of seller are you?

In this situation, where the existing relationship with the company is irrelevant, all sellers are described as the “Penny Pincher/Scout”. All sellers have to constantly reduce costs, and scout the environment for new ways to save.

The second type of buyer is the “Relationship Buyer”. This buyer wants the seller to be part of the organisation, and his expertise and insight is sought and respected. He is privy to sensitive matters and is trusted to have the company’s best interests at heart at all times. The relationship is deep and secure.

Sellers with an existing relationship are “In the Pack”. Sellers who have no relationship can only assume the role of the “Patient Outsider”, who must patiently wait for someone “In the Pack” to slip or be unavailable. The “Patient Outsider” must make his presence felt, with no immediate return.

The third type of buyer is the “Value Buyer”. These buyers understand what economic value a superior product or service can yield for the company. They are happy to pay more for a product or service provided they are convinced of its economic value. They require sellers to know the business intimately so that they can add value, and be constantly working to improve their offering.

Sellers with an existing relationship are called “Players” and have a seat at the table that they retain as long as they add sufficient value. The “Players” are unlikely to make mistakes; they work hard to retain their position and are invariably superb at their work.

Sellers with no existing relationship have to be “Crafty Outsiders” to get a chance to engage with this desirable buyer, who happily pays more for more value. The “Crafty Outsider” needs to be looking intently for advantages and opportunities to come to the attention of the Value Buyer and at least get some piece of the action.

The fourth type of buyer is the “Poker Player”. This buyer is a Value Buyer who plays the role of a Price Buyer to extract as much as possible from the seller. The “Poker Player” is happy to bluff, and to use tactics and manoeuvres (fair and foul) to achieve the company’s goals.

Sellers with an existing relationship are the “Advantaged Players”, but will be subject to all manner of artifices to extract value at the lowest price. If a seller has no prior relationship, they play the role of the “Rabbit”, racing around the track to keep the hounds running at top speed. Rabbits have no chance of winning the work; they are only there to keep the “Advantaged Players” running.

The book provides guidance for each seller, before and during the negotiation. One of many important pieces of advice is “qualify, qualify, qualify”. In the case of the “Poker Player”, being the Rabbit is a horrible waste of time and energy for a zero chance of getting the business. Given the instruction to get three quotations, Procurement will encourage the “Rabbit”. Failing to pre-qualify by asking probing questions will have you running purposelessly. Your valuable time can be better spent.

The basic piece of advice to all in sales is an obvious, but nevertheless very difficult fact to absorb. “Never take it personally.” See it as the zero-sum game it is, with the golden rule – he who has the gold makes the rules. Know too, that in the game of business, Procurement is “sweating the deal just as much as you are, but they just learned not to show it”.

With this attitude to selling, and armed with insights and tactics of which the book is full, you will be able to “negotiate with backbone”.
 
Readability:   Light -+--- Serious
Insights:       High -+--- Low
Practical:       High -+--- Low

*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. Views expressed are his own.