Electronic manufacturers are getting their butts kicked!

After several weeks of back-and-forth negotiations, your team finally closes the big deal. Unfortunately, it’s not the deal you needed. Why? Procurement kept the pressure on, controlled the process, and your team gave almost everything away to get the sale.

So what happened?

It’s simple. The procurement organization you went up against was better prepared and better trained. They leveraged a preparation process and negotiation principles that had been taught to them to set themselves up for success. The reality is that, like your team, most sales teams have never been formally trained to negotiate and end up losing to better-trained teams.

Sales leaders who have teams that sound like this eventually come knocking on my door.

After negotiating hundreds of millions of dollars worth of deals from the front lines as a salesperson, manager, and VP of global sales, I know what does and does not work in the real world. I spent 15 years in the trenches learning valuable lessons about high-stakes B2B commercial negotiations. Today, I work with select clients and turn their teams into world-class negotiators.

Below are a few pain points I’m sure you can relate to and some insights on how to deal with them.

1. Your sales team is getting stuck in single-issue competitive negotiations

One of the biggest challenges negotiators in the electronics manufacturing industry have is they get stuck on single-issue negotiations, generally on something competitive like price.

If you want to be able to better defend your price, you need to define what your price includes. The more that you can wrap around your product or service, the greater your ability to disassemble your offer.

No one likes to have things taken away from them. To protect themselves against discounting, your sales team needs to create bundled offers that can be dismantled. Effectively, when asked for a discount your sales team needs to be able to take something else away other than price. This will force your customer to reassess their request. Don’t give away value, trade for it.

2. Your team is outmatched at the negotiating table

You are not getting the results you want from your negotiations because your team is not trained and it’s likely that your customers are. If true, your team is being outmaneuvered by better-trained negotiators. Negotiating is a skill and an art that can be learned. Unfortunately, it isn't taught in most sales training.

While sales training helps you convert opportunities into prospects, negotiation training converts opportunities into great deals.

The only way your organization and your sales team will know how to negotiate effectively is by training them. This way they will be equipped with the appropriate skills needed to negotiate from a position of strength. Training will allow your team to deliver measurable improvements in performance and build confidence through roleplaying. The best part is, as your team becomes more competent, your deals will keep getting better.

3. Your team is opening their negotiations at their walk-away position

One of the challenges you have is that your staff keeps coming back to ask for discounts. This may leave you thinking your salespeople don't understand your value proposition, that they're not able to negotiate, or that they are not able to sell beyond price. The reason this is happening is because your salespeople are taking the price they receive internally and running with it.

This means your salespeople are starting the negotiation at their walk-away position. They are opening with the price at which they would need to go back and negotiate internally for a discount. A better approach is for them to be ambitious in their opening position and start trading from that point. Any request for reduction can be traded for something of equivalent value.

You end up negotiating with yourselves rather than your clients.

Stop your sales team from coming back to management for a discount by training them to be more aggressive in their opening offer. Anchor the negotiation at a price higher than the reservation price so the sales team has room to move without the intervention of management. This way they are seen as a more credible negotiating partner because they can negotiate on their own.

4.You are giving away value

The biggest challenge salespeople face is the belief that they need to give things away to win the deal. They change payment terms or agree to deliver in an unrealistic time frame just to make the sale.

The golden rule of negotiation is: Don’t give away anything unless you get something in return.

Get clear on what your unshakable value proposition is and what your client's alternatives are. Stop making unnecessary concessions. Get a handle on what your relative power is and start trading for the things you want.

5. Your team’s discovery process sucks

Information is power and the currency of negotiation, so make sure you create an information-gathering machine. B2B negotiations are all about preparation. It is not only what you say in the moment, it is how you prepare.

Gather information, gain leverage.

To maximize value, your sales team needs to get to the truth. Salespeople need to see themselves as investigative journalists – bloodhounds after a lead. By focusing on what your customer needs and why they need it your negotiating team will uncover leverage points that will help them get more of what they want.

Walking in on game day without doing the necessary investigating is not going to get you the result you want. You need a team of people in your organization who have touchpoints with your customers and are able to scoop up information and bring it back to the core team so you can create a negotiating strategy that gains leverage.

Information is the currency of negotiations!

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