Not a member? Sample unlocked content here.
In the May 2017 SalesProChat podcast, we look into what goes into successful negotiations and how to improve your skills. Hear helpful tactics and tips and improve the way you approach those negotiations with clients, prospects and partners.
Our guest is Leanne Hoagland-Smith. Leanne Hoagland-Smith is Chief Results Officer at Advanced Systems. Leanne is a people and process problem solver for SMB executives and sales professionals in rapidly growing markets. She has 25+ years experience in private and public sectors as an executive coach and workplace culture tactician. Leanne is a published author and recognized speaker who brings common sense solutions.
Read the transcription..
Bill Banham: Let's begin by looking at the role of negotiation in attracting and retaining top sales people. How can sales candidates demonstrate their negotiation skills during the hiring process, so even before they've started the job.
Leanne Hoagland-Smith: That's an interesting question but I'm gonna back up a little bit and say that A, did the small business find the right person to begin with and did the sales person apply for the right job? I think sometimes salespeople start negotiating in the interview process because it's really not a good fit, for either for them or for the small business owner. If it is a good fit, I think they can demonstrate their skills by 1, active listening, by applying some emotional intelligence, and by being truly engaged.
Bill Banham: Now let's switch focus and look at SMBs versus larger companies. Tell me a bit about the role of the small business leader in leading sales efforts in negotiations compared to how sales negotiations are managed in larger companies.
Leanne Hoagland-Smith: I may be a bit of a contrarian, but I think sometimes this whole concept of sales negotiations happens because of a failure to identify previous sales objections. And so now they're negotiating and where that sales objection or objections should have been handled during their sales presentation. Because a negotiation comes theoretically after the presentation. Everybody has agreed and now, well, we want to fine tune what we agreed to. And that fine tuning could be undiscovered sales objections, or it could be something new that's entered the sales process, meaning a new decision maker has entered the sales conversation. And now the sales person's having to negotiate with this decision maker who he or she may not even have a relationship with. And so that falls back on the sales person to ensure that when it comes to negotiations, they have everyone at the table they know and there are no surprises.
Bill Banham: Keeping on that theme of leaders and leadership and leading sales. In your experience, do good negotiators make for good leaders? If so, why? If not, why not?
Leanne Hoagland-Smith: If the success of the sale is a win-win for both the salesperson and the buyer, then they obviously do make good leaders because they're leading for results. If the negotiation is not a win-win for either one, then the results have been diminished and therefore they're probably not good leaders. And I believe Peter Drucker said leadership's all about results, and in sales it is about results. As how you demonstrate your sales behaviors, your sales skills in that sales conversation that we're gonna call sales negotiations, is a testimony to you and your strength as a salesperson. And that strength being your ability to lead to get to the results.
Bill Banham: Pretty big question for you now. What are your top tips to improve the negotiation process in order to close more deals at higher profit margins while keeping the clients happy?
Leanne Hoagland-Smith: The very first step is know what your bottom line is. How much are you willing to give away? And I'm going to still go back, I'm gonna retreat and say are you negotiating because you made an oops in your presentation and consequently is that oops coming back and biting you through this negotiation process? Are you negotiating around money? Well, if that hasn't been clearly articulated up front showing a return on investment, then the negotiation is really a failed sales objection that has not been reconciled.
As far as some other tips to improve the negotiation process is I think being direct. What are you looking for? And attempting to always maintain a win-win attitude. You want the client to win, but you also want to win. And when you do your research well, a lot of times my sense is that you as a sales person could potentially have a higher profit margin because you did all your research and you may actually be upselling in that negotiation process. If you want this, whatever this is, then we can do this but we can't do that. So again it's showing the client exactly the ramifications of the give and take in that negotiation sales conversations.
Bill Banham: So let's take a deeper dive now in terms of ways to effectively prepare for a negotiation, in terms of defining goals, positions, bottom lines, trip wires and vulnerabilities. What are some ways that sales people can use a consultative win-win approach to these negotiations that secure long lasting partnerships with clients? And talk to us a bit about the homework that goes into that conversation ahead of time.
Leanne Hoagland-Smith: I think some of that happens during the sales presentation. And one of the first questions I was taught years ago by one of my coaches which has been very, very effective and that eliminated some of the negotiation is, "Has anything changed since we last met? Or are there any changes that are forthcoming that you know about?" Because sometimes the negotiations happen because there have been changes in the organization that the salesperson was not aware of. A new sales manager was hired, a reorganization is coming, new technology is coming. And all of these new issues can have an impact on the decision to move forward with the sale.
And I think it all goes back down to research. Make sure you do your homework. Find out about the competition if this is a very highly competitive contract. What are they offering? You can find out and I think this is where having more than just one or two contacts in any organization is critical, because when you expand your influence within an organization, when you know more people beyond the decision maker, some of the rank-and-file people you're gonna have relationships. You're gonna hear what's happening in the organization. And that way you're not caught off guard.
Bill Banham: Let's talk about objection handling. What are some of the ways to reframe previous or potential issues? So to solve impasses, or create value for both parties?
Leanne Hoagland-Smith: When you ask that question, "Has anything changed?" .. If you get a positive response, "Yes, we've had change," then you're going back into fact finding and that gives you the opportunity to say okay I need to reschedule the sales presentation to bring this information into our statement of work or our sales proposal. And my sense is that if that is done well, when you actually do the sales presentation and you're sharing your proposal, another, I won't call it a trick, but another tactic is to only give one page of the proposal at a time as opposed to stapling it. Because the normal behavior is the price is usually on the last page and everybody flips to the last page.
So, if you have walked through your proposal and you get agreement of the situation, of the solution, of return on investment, the delivery, the impact, however your proposal reads, then the price becomes the last issue or obstacle. And if you've demonstrated return on investment and impact well, the price for the most part should not be an obstacle. Unless you're asking for pie in the sky, and that means you really didn't do your homework well.
Bill Banham: So let's move away from the homework for a moment and I'd be interested to hear from you and any anecdotes perhaps you have about situations where you've seen a meeting where the details are absolutely fine but perhaps a deal was been lost because of personalities. Perhaps an off the cuff remark that lead to a bad taste and a deal didn't go through, and any disaster stories that you can share from your career that you've seen.
Leanne Hoagland-Smith: One of the earlier ones I had years ago when working in a warehouse distribution in the industry of pipe valves and fittings, I had a salesman come to me and challenge me for having more than two vendors for a particular product. And so he didn't do his homework, and what happened is that he was standing over my desk looking down at me and being somewhat authoritative and very much in ego mode, and I just looked up at him and I said politely to him I said, "Well, when your company can ship complete, can give me invoices without error, can ship material without error and can ship on time, then I may consider your request of only going to two vendors. But until that time, I'm staying with who I have and you're not the primary vendor because of: you don't ship on time, you have a lot of back orders, your invoices are a disaster and you're costing me money because I have to go through every line item."
And these invoices in many cases where 100 to 200 items, line items. So that quiet him down and I always remember that because why A his attitude. He became very obnoxious and he thought he knew better than I did as a purchasing agent. And in this particular commodity we were spending probably a million dollars a year, easily. It always stuck to my mind that he retreated to, "You don't need." So he was emotionally unintelligent telling me what I did I did not need as a purchasing agent and he was just totally clueless about emotional intelligence, about how do you handle getting more business, and the way you don't handle it is to challenge the buyer.
A better way would be to say, "Okay, I noticed our business with you is declining, can you please tell me why?" As opposed to coming in and telling me I only needed two vendors, of which he was supposed to be one. That is just ... He was attempting to negotiate. You probably wouldn't agree, but he was attempting to negotiate more business and he failed miserably.
Bill Banham: We're coming towards the end of this particular interview. Before we wrap things up, I just want to pick your brains a bit more about concession strategies. Can you can you tell us a bit about creating and applying concession strategies that lead to successful negotiations while maintaining profit margins? So for example are there a bunch of objections that a good salesperson knows and has recorded and has gone through the answers to all of those ahead of a meeting? Are there any particular models out there that help?
Leanne Hoagland-Smith: Well, I don't know if this is a model, this is just something I always ask is a question I ask after the sales presentation is, "What's keeping us from moving forward?" And I don't know if it's because of that question, and I've shared it with clients. They have used that question and they are no longer in negotiations. Maybe sometimes negotiations happen because the buyer has not had time to process everything and the salesperson is impatient to get the yes. I said years ago, silence is green if you're in the US cause that's the color of our currency, or whatever color your currency is in your country. And it's just, again I'm old school. I've not been involved in a lot of upper level negotiations. I just ask the question, "What's keeping us from moving forward?" And then if it is an issue that was not covered, uncovered in our sales conversation during the sales presentation, shame on me. I better be able to address that and a lot of times it could just be fear on the part of the buyer. And they go into negotiation mode because I'm not ready to make the decision.
I guess the question I ask is, "Are we negotiating because we've agreed to the sale and these are some of the finer points or are we negotiating because we've not had commitment to the sale and they want these assurances before we shake or sign the contract?" If it's the former then obviously you have to talk. If it's the latter then it sounds like you made a mistake in the sales process.
Bill Banham: And that leads me to ask you one more question. I would like to commit now to finding out how we can learn more about you. How can our listeners get in touch and learn more about what you're getting up to?
Leanne Hoagland-Smith: Well, obviously with social media and the internet all you have to do is Google "Leanne Hoagland-Smith" because I am the only Leanne Hoagland-Smith out there. They can go to my blog or phone numbers always work. I love taking phone calls.
Bill Banham: Wonderful. Well that just leaves me to say Leanne Hoagland-Smith, the only Leanne Hoagland-Smith out there, thank you very much for being the guest on SalesProChat today.
Leanne Hoagland-Smith: Thank you.
Bill Banham: Thanks for listening.
Not a member? Sample unlocked content here.