Profit IdeasMultidimensional Negotiating to Support Your Sales Team
Barry Wright, Director Grosvenor USA — Grosvenor Training
• distribution management best practices • sales practices • industry perspective • sales management • sales management styles in distribution • leadership training • sales training • executive briefing • Distribution Personnel Training and Development
In this video, Barry Wright, Director of Grosvenor Training and Consulting, and Randy MacLean, President of WayPoint Analytics, talk about helping sales management and executives in the distribution industry bring negotiation skills to the forefront in order to gain an edge in the marketplace.
In the current sales climate, negotiating is a lost art. However, both Barry and Randy have seen firsthand how a rediscovery and retraining on these skills has led to an increase in growth and profitability for many distribution companies.
Unidimensional Negotiating
Sales has essentially devolved into a one-dimensional negotiation. Many salespeople and customers are only negotiating on price, and this is a losing situation. Essentially, it is a race to zero. Either you will have to lower your price to keep the customer or the customer is unhappy, feeling they are not getting a good deal from you. Or, they will just leave.
In WayPoint's experience, distribution companies that are implementing a multidimensional approach to negotiation are showing consistent increases in profitability.
Negotiating on Multiple Dimensions
To take a multidimensional approach to negotiations you must be creative and look at issues beyond price that have value to both parties. The key is to make sure you never give without receiving. By using dimensions that have a strong impact on profitability, for instance taking advantage of what you know in your own business, you can offer options to clients that will improve your business.
For example, you may be able to work on logistical elements with the customer. WayPoint has seen distributor clients who have been able to make 5%-8% margin reductions for good customers, without impacting profitability. These customers are those who have reasonable volume and who are willing to allow orders to be combined or to take delivery on a longer time frame.
In a multidimensional negotiation, you will have a list of items you can ask for in return for what the customer is asking for (usually a lower price). Multidimensional negotiating is not for every customer. It requires trust and cooperativeness.
Supporting Sales
Building innovation and creativity into your negotiations with customers expands the opportunities for salespeople to say yes. They are no longer boxed in by price and can be seen to be actively trying to solve customer problems. This type of approach is a skill that requires planning, structure, and education to do it well. Yet, it is one of the most valuable things a manager or executive can be thinking about to get ahead in the market and raise the skill level of their organization.
Increasing negotiating skills and providing the sales team with a broader range of things they can negotiate with is a pathway to having a larger number of more successful, more profitable accounts in your portfolio.
For more information about Barry Wright, visit: www.grosvenortraining.co.uk