Millions Lost Through Ineffective Sales Negotiations
Negotiation between two companies gives you the chance to show that you and your company are committed to maximising value for both parties
. When it comes to selling to business it is important to remember that the strength of your propositions will be tested when they calculate the return on investment (R.O.I.). Therefore it is important to remain honest and open throughout the sales negotiations. Negotiation should not be totally reliant on barter of price, you are offering a value proposition that should include service, trust and reliability. Sales training courses can help to focus the minds of your staff on what is important to your business.
If you get the sales negotiation process right then you will build up trust within your customer base which will help to create a mutually beneficial partnership. A recent report entitled 'Improving Corporate Negotiating Performance', compiled by Huthwaite International, claims that millions of dollars are lost every year due to ineffective negotiations.
The research suggested that 80% of companies do not have a formal sales negotiation procedure. Individuals were left to rely on their own ability to negotiate deals with customers. There are a large number of problems with this. Success in negotiation relies upon open communication from both sides and quick responses to issues. It was found that the majority of negotiators who relied upon their own intelligence spent more time dealing with staff from their company than with the customer. This creates gaps in communication and creates a lack of trust in the individual negotiator. Sales negotiation courses are the best way to combat this issue, if your staff are well trained they will represent your business in the best possible light.
Over the last few years trading conditions have been inhospitable for many. The average net income loss for the 2000 most profitable businesses (as listed by Forbes) was 30.9% in 2009. Huthwaite analysis of this information suggests that the companies that had reached negotiation maturity (as defined by their report) recorded average net income rises of 42.5%. Companies with no negotiation structure at all had average net income losses of 63.3%.
It would be a step too far to suggest that these differences in income could be completely attributed to negotiation skills. But this report does suggest what constitutes good practice in sales negotiations; a clear negotiating formula, open communication and succinct replies for information.
Training sales staff should be an essential part of any business plan. Every business relies upon sales and it can make a huge difference to the success of your business to have your sales staff reading from the same page. Focusing the minds of your sales team onto the value proposition that you are offering will help you to increase your sales and will hopefully have your customers coming back for more.