WATCHFUL: Vigilant and wide-awake to notice opportunities and pitfalls
WATCHFUL: Vigilant and wide-awake to notice opportunities and pitfalls
“We blew it Narayan” said Xavier, his fingers on the ignition key of the sedan “We should have had the deal in our pocket and now we’ve left it hanging on a delicate thread”
EFG Ltd’s parking lot was deserted with the company’s corporate office still operating at 50% strength. EFG was looking to buy additional engineering machinery to reconfigure some of their manufacturing processes post the pandemic. Narayan and Xavier had been confident they would breeze through their pre proposal discussion phase of the negotiation. Their confidence came from the intrinsic technical superiority of the machines that their company, PQR Engineering was supplying, plus the high quality maintenance and technical advisory support.
Narayan shook his head in disbelief “What went wrong?” Xavier turned the key and the engine came to life “What happened to you Narayan? You were simply not watchful today”
“What do you mean?” asked Narayan as they pulled out of EFG’s office
“When the 3 guys from EFG’s procurement team ran us through the purchase spec slides, did you notice slide no.3?” said Xavier “It looked like it had been scoped entirely from the product brochure of our competitor XYZ”
“My God” said Narayan “How did I miss that one? We could have easily turned the conversation towards post commissioning support and advisory services. Those are known weak areas for our competitor”
“Highlighting those 2 strong points would have countered their insistence on the 2 week commissioning time line” said Xavier. “Ours was more by just a week. But advantages of going with us will be worth that additional one week of commissioning time”
“How dumb of me” said Narayan “Instead of countering them, I simply copped out and promised I will take this back to our engineering team. What a needless promise”
“I think the month end pressure is getting to you Narayan” said Xavier “You ignored a lot of other cues. I was trying to attract your attention with our pre agreed sign of rolling my pen on the table. You were too busy to notice. Also did you observe one of their guys using a note pad with XYZ’s name on it. And the Procurement Chief’s pen had XYZ emblem on it. I suspect XYZ promised them two weeks and so they are fixated on it. We could have asked them what’s the benefit they expect from the 2 week timeline. Wait let’s check it out right away”
Xavier dialled his contact in EFG on the hands free “Hi Venu. Wanted to thank you for the good meeting we had today. By the way, before we get back to our engineering team, thought of checking with you on your team was insisting on a 2 week commissioning timeline. Is there any special significance attached to that timeline?”
There was a pause followed by laughter at the other end. “Frankly Xavier there’s nothing big to that 2 week time line. We had 2 other quotes that promised 2 weeks. So we figured that must be the benchmark. Plus our CEO wants this reconfiguring thing to be over fast. That’s how the team decided to make it 2 weeks for all bidders”
Narayan let out a deep sigh. “What a miss and what a mess. Wish I had been more watchful”
Imagine you are Ross Taylor facing a Mitchell Starc running into bowl. To middle the ball and score runs, you first have to see it coming. In fact, you should see it so well, and so early, that you have enough time to play it well. That applies to sales situations as well. And to daily situations life bowls to you. To ‘see it’ means to see the way Arjuna saw just the eye of the fish his arrow was expected to hit in Mahabharat.
Watchfulness is the distinguishing hallmark of extreme achievers in all professions including sales. Watchfulness ensures they spot opportunities others don’t notice. And identify landmines to avoid, that others may step on. Their watchfulness extends to all sales activities, from prospecting, to proposing, to closure, to on boarding and post sale support.
Being watchful focuses all their energies on that one thing they see. They know what to watch for, and perfect how they watch for it.
Do you know what you should watch for? What should you avoid, prevent, go for, and may be just let go? Well, here are 5 pitfalls to avoid, when you face a Sales Negotiation documented by Prof Peter Hiddema of INSEAD Knowledge:
1. Selling instead of meeting a need - Identify the precise need in the Customer your product or service meets, before getting into negotiations
2. Acting on untested assumptions - Your approach to a sale is guided by what you assume, is motivating your prospect. But the assumption could be off the mark, unless it is tested. Wrong assumption will mean that sale may not happen
3. Not enough listening and questioning –Inadequate listening and questioning could be worse than acting on untested assumptions. It’s hard to sell if you don’t know why someone is buying
4. Addressing prospect’s position instead of underlying interest – This is rated as the core of almost any negotiation or sales error. A “position” is a stated request or demand. It is what someone says they want. An “interest” on the other hand, is the underlying reason behind the stated request or demand. So, as a salesperson, when a Customer demands a discount, we may assume it’s because our product or service is perceived as too expensive. Here we may be erroneously addressing the Customer’s position and not the underlying interest. The assumption could be wrong. Still we might end up extending the discount
5. Negotiating against yourself with unilateral concessions - For a business relationship to be sustainable there has to be reciprocity. To get, you have to give. In their eagerness to clinch the deal, salespeople often offer incentives and concessions even if they are not asked. If the prospect is still unmoved, more concessions are offered to woo the prospect into submission
Watching out for these negotiation pitfalls might help you save many of your deals or your margins. Or both.
Possible solution for the story situation – Narayan in our story should maintain a Negotiation Watch List he should go through before every important sales negotiation (See Anchor Practice below)
Anchor practice: 5 Point Negotiation Watch List
1) Uncover the Customer’s needs before you put your best foot forward - If you find that you can’t fill the need, move on. A mismatch will only waste time and energy for you and your Customer
2) Be curious, be humble, and check all assumptions - Check every assumption you make about why the prospect did or did not respond to your cues during the sales process.
3) Ask short open-ended questions - Questions like “Can you help me understand more about …” or “What’s the concern?” are a big help. Stay quiet, listen, and ask clarifying questions. Focus on understanding and summarize what you think you heard. Once you are through, you will know so much more about the Customer
4) Identify the real reasons for positions taken by Customer - Once this real reason is identified, solutions can be developed. A discount-demanding Customer may not always be thinking our product is expensive or unfairly priced. It may be because their budget is limited for the current quarter but they still want to buy the entire quantity right away as they have a need. Spreading the billing over 2 quarters could be a solution in such a case. If we don’t do this we may not make the sale or we may lose on margins
5) Make concessions, provided and only provided, you get something in return - The moral is simply this: If your prospect isn’t interested in making it win/win, is that business worth doing? For example, you could seek a tentative commitment (Trial close in sales parlance). “If I am able to make this concession, can we close the deal?” or “If I can get this concession for you, can we have a two-year contract instead of the annual one?”.
Pause to reflect: ” Watchfulness is the distinguishing hallmark of extreme achievers in all professions including sales . Watchfulness ensures they spot opportunities others don’t notice. And identify landmines to avoid that others may step on.
Action Question: “How can you apply the 5 Point Negotiation Watchlist to the next negotiation you are getting into?
Related Readings: Mercuri InEssence Document on Five mistakes to avoid in sales negotiations
Takeaway Quote: Not being tense but ready. Not thinking but not dreaming. Not being set but flexible. Liberation from the uneasy sense of confinement. It is being wholly and quietly alive, aware and alert, ready for whatever may come... Bruce Lee
About the series: This is the 74th in a series of 100 Posts that seek to build your #Sales Resilience ... as an individual salesperson, as a sales team, and as a sales organization. Because a Resilient India needs Resilient Sales.
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