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Think! Inc. - business negotiation, redefined

Archive for June, 2006

Stop Giving Away Your Value
Brian Dietmeyer - June 14th, 2006

Corporations Fall Prey to Pricing Games Too Often, Says Think!

CHICAGO – Despite the complex sales processes used by Fortune 500 companies, many sales teams fall prey to the last-hour pricing games during deal negotiations. However, sales teams often set themselves up for this downfall by commoditizing their own services during the sales process, according to Tim Caito, Partner and Vice President of Worldwide Sales for Think! Inc., a progressive business negotiation firm.

“During my consulting, time and time again, I hear how customers agree that a product is clearly superior but that the price is 20 percent too high. Rationally, it’s impossible to say a product that produces significantly better results should cost as much as one that doesn’t always work, and yet that’s what we often hear from customers,” said Caito. “Somewhere along the negotiation process, there’s a significant disconnect between the actual value of the product and the cost.”

In order to avoid the pricing game, sales teams need to showcase their value right at the beginning. Often, sales teams do not bring up their product’s unique qualities early enough in the process. Instead, they often present those differences at the end of the sales process to show why the customer should pay more. According to Caito, three major changes in the marketplace has made the value-sell more difficult.

First, the buying process has become more formalized and structured. Professional purchasing people are purposely brought into the process at the end because they focus on the economics of the purchase, not necessarily the quality of the product. By infusing the value of the product with those who recommend you to the professional purchasers, that value is often brought to the table by the corporation’s own internal staff, making the value proposition sell that much easier.

Second, deals are becoming increasingly complex. One of the most common comments Caito hears during negotiations is the deal has come full circle from where they started a year ago. Because deals have become so multifaceted, price quickly becomes one of the first and easiest common denominators among competitors.

And third, many sales teams believe the buyers are the one with the power in the negotiation. However, this is not always true. Approximately 50 percent of the time, according to Caito, the seller has the power in the negotiation because they are offering a product or service that cannot be fully offered by any other competitor, leaving the buyer without a viable alternative.

“By waiting until the end of the deal process, many sales professionals become tactical and reactionary and fall prey to the pricing game. Negotiation needs to be a parallel process of the sales cycle rather than just a step, ensuring customers are willing to pay for the value you can bring them,” said Caito.

About Think!

Think! Inc., headquartered in Chicago, Ill., delivers high-performance negotiation systems to optimize the sophisticated sales processes of Fortune 1000 companies. Through strategic negotiation, Think! helps companies align their deal-making initiatives with their corporate goals. In addition, the process of strategic negotiation helps businesses understand negotiation from both the buyer and seller’s perspective, as well as act on that understanding to integrate negotiation more fully into the sales process, helping all sides achieve a much more desirable outcome. Think!’s clients include Federal Express, Monster.com, Ryder, Honeywell, Coke, Microsoft, Johnson & Johnson, Symantec and Lucent Technologies. For more information, visit www.e-thinkinc.com.

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Most Corporations Would Not Know a Good Sales Deal… Even If It Hit Them On the Head
Brian Dietmeyer - June 14th, 2006

Corporations Unknowingly Give Away Millions Each Year Due to Bad Sales Deals

CHICAGO – Imagine you’re a Fortune 500 sales executive working on a critical $100 million deal. Would you know a great business deal if it was presented to you? Even though it seems such a simple and obvious question, the majority of corporate executives cannot answer this question, leading to serious revenue loss and missed opportunities, according to Steve Thompson, Partner and Vice President of customer solutions for Think! Inc., a progressive business negotiation firm.

“In my meetings with executives, this is the one question I always ask, and virtually no one can answer me. The scary issue with not knowing what you want from a deal is that you’re often ready to accept just about anything and even give away the farm just to get a deal signed,” stated Thompson. “Now imagine a sales force of more than 3,000 people and the potential value they are giving away each and every day. Without an understanding of what a company needs and expects from a deal, corporations may be losing millions in net revenue.”

While many corporations have invested significant time, effort and money in sales skills training and sales processes, the sales teams are still not creating better deals for their companies. According to Thompson, although these companies have taught their employees to sell more proficiently, they haven’t painted the target of what they want them to sell to. Without a clear understanding of a great deal for the corporation, sales executives and sales teams do not know what they are aiming for and will often miss the mark of bringing in true value to a deal.

Two of the most common mistakes sales professionals make during negotiations are offering deep discounts and giving away ancillary products or services. Sales teams often discount products and services much more often than they need to and offer deeper discounts than necessary. By offering such discounts, they willingly hand over their margins and any chance to make a significant profit on the deal.

In addition, ancillary products or services have an innate value that can be added to a deal. By casually giving these items away, sales teams unknowingly devalue what they’ve provided to the customer. So not only have they missed an opportunity to add value to the negotiation for the customer, they have also reduced the company’s short- and long-term profit on the deal.

To establish this target for sales professionals, Thompson recommends companies create a negotiation strategy, mapping out the guidelines of what a great deal is, including a prioritized list of desired items in the deal as well as the acceptable pricing levels for its products or services. This will allow sales teams to focus on critical issues as well as those line items that create additional value in the deal, such as longer-term contracts or hard-to-secure quarterly meetings with executives to learn of any potential business opportunities down the line.

“At the end of the day, understanding what a great deal looks like ensures the things that create value for a company are considered equally with the things that create value for a customer, resulting in more consistent and valuable deals across a sales organization,” commented Thompson.

About Think!

Think! Inc., headquartered in Chicago, Ill., delivers high-performance negotiation systems to optimize the sophisticated sales processes of Fortune 1000 companies. Through strategic negotiation, Think! helps companies align their deal-making initiatives with their corporate goals. In addition, the process of strategic negotiation helps businesses understand negotiation from both the buyer and seller’s perspective, as well as act on that understanding to integrate negotiation more fully into the sales process, helping all sides achieve a much more desirable outcome. Think!’s clients include Federal Express, Monster.com, Ryder, Honeywell, Coke, Microsoft, Johnson & Johnson, Symantec and Lucent Technologies. For more information, visit www.ethinkinc.com.

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Corporate Negotiation Turns About-Face: Trend Indicates Art of Winning Deals Becoming a Science
Brian Dietmeyer - June 14th, 2006

Global Businesses Adopting Rational Negotiation Systems to Dramatically Increase Corporate Selling Power

CHICAGO – Businesses across the globe utilize more complex, systematic sales processes than one can count. And yet, when it comes down to the final negotiation, sales teams often shoot from the hip, relying on situation-dependent tactics or the personal talents of an individual negotiator. However, big businesses are finally making the move to more sophisticated methods, switching from the art of negotiation to the science of deal making, according to Brian Dietmeyer, founder and president of Think! Inc., a progressive business negotiation firm, and author of Strategic Negotiation.

“While professional sales people often are aware they need a proficient approach to negotiation, many resign themselves to the belief there’s nothing they can do,” stated Dietmeyer. “However, Fortune 1000 sales teams are beginning to take the reins and radically change the sales landscape by building and integrating an internal negotiation blueprint that will easily travel from sales opportunity to sales opportunity and help them win deals.”

What do these companies know that others don’t? While each negotiation may be different, all negotiations follow similar patterns. Whether a company is selling tires in Ohio or computer hardware in Nepal, there is a blueprint that can be utilized during the negotiation. This trend toward systematic deal making is wiping away the simplistic viewpoint of negotiation and creating a street savvy approach.

“Strategic negotiation allows us to think further and deeper into our accounts, expanding the value proposition we bring to the table. Before, we would give items away during negotiation. Now, we find common elements we share with our customers and present trade opportunities,” commented Brian Graham, senior vice president of enterprise and staffing sales for Monster.com. “By focusing on the shared elements, we are producing better deals for both Monster.com and our customers. And in the end, not only are our customers happy, but we develop an even deeper and solidified partnership with them.”

“In the course of our consulting, we see people involved in very complicated negotiations that include a variety of different items, such as price, length of agreement, service, payment terms, legal terms, volume and so on,” said Dietmeyer. “Before the concept of negotiation blueprinting infiltrated some of these organizations, they often had a limited view of their customer’s needs. When we asked them what negotiation was about, they would often just say price.”

Sales professionals only need to answer two simple questions to create an effective blueprint, according to Dietmeyer. First, what happens to both parties if they don’t come to an agreement? Second, what are the likely terms if both parties do agree?

Although the solution may sound simple, constructing the negotiation process can be complex. By examining what would happen if the businesses do not come to an agreement, sales professionals garner impressive insight into all of the facets of the negotiation, not just the surface issues such as price. From there, they can safely predict the specific terms their client will want and prepare to trade against those terms to secure a better deal, ultimately creating a win-win for both parties.

About Think!

Think! Inc., headquartered in Chicago, Illinois, delivers high-performance negotiation systems to optimize the sophisticated sales processes of Fortune 1000 companies. Through strategic negotiation, Think! helps companies align their deal-making initiatives with their corporate goals. In addition, the process of strategic negotiation helps businesses understand negotiation from both the buyer and seller’s perspective, as well as act on that understanding to integrate negotiation more fully into the sales process, helping all sides achieve an agreeable outcome. Think!’s clients include Federal Express, Monster, Ryder, Honeywell, Coke, Microsoft, Johnson & Johnson and Lucent Technologies. For more information, visit www.e-thinkinc.com.

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Negotiation: Organizational Alignment of Strategy and Execution Process
Brian Dietmeyer - June 14th, 2006

A Tactical Approach To Negotiation
A global data management supplier with 30 account managers was negotiating an average of 3 deals per year in 7 countries with one of their largest customers. The buyer in Germany had pushed harder on negotiation and finalized a better deal than buyers in the other six countries. Buyers for that same customer began sourcing in Germany as they could get the same product cheaper. Other account managers matched the German price. The buyers lost trust in their respective account managers but at least began buying in their respective countries again, until local competitors beat the new, lower price and ignited even deeper global give-away wars.

This example could have happened just as easily with New York and California divisions of the same U.S. based customer organization. Organizational agreement on the guidelines for negotiation or, a negotiation strategy reduces the probability of this common event happening. This article will review the emergence of negotiation strategy and process, why they are a necessity for today’s sales force, an overview of how to build them into your organization and their benefits…….

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Successful Price Negotiation with Professional Supply Managers
Brian Dietmeyer - June 14th, 2006

The Problem

You have flawlessly executed your sales process at multiple levels within your customer’s organization and now you sit across the desk from the supply manager who states “your competition is 25% cheaper, you have to go back and sharpen your pencil!”? You have a choice; go back to HQ and ask for a lower price, or take an analytical approach to dissecting this problem…..

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Negotiating Intelligently:
Brian Dietmeyer - June 14th, 2006

Strategic Marketplace Influence vs. Tactical Reactions

It’s the end of the quarter and you really need a strong fi nish to make your numbers. You ask your Eastern region sales rep to move a bit lower than usual on price for this client, perhaps be a bit more fl exible on payment terms, waive the fees for a few value-adds and beef up the service a bit at low cost. It’s just this one deal, after all, and you really need those numbers. What harm can there be in biting the bullet… just this once?
The problem is that your sales force of 400 is located in the U.S., Asia, Europe, and Latin America. Each sales rep closes about 25 deals annually for a total of 10,000 deals per year. Transactions average $10K for a total of $100 million. This bullet biting is happening up to 10,000 times per year, sending inconsistent and confl icting messages to your customers, and equally as important, to your…………..

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Strategic Negotiation
Brian Dietmeyer - June 14th, 2006

SNnewcover.jpgWe all know that the business environment changes every day. But the radical shift that’s taken place in negotiating in recent years is so substantial that it requires an equally radical shift in thinking. Looking at negotiation as a series of tactics simply won’t work anymore. The only way you can meet the challenges of negotiating in today’s business world is to think of negotiating as a process. And that’s what Strategic Negotiation is all about. It provides you with a systematic and rational process that enables you to go beyond “win-win” to create true, measurable business value, and allow both you and your customer to meet - and exceed - your negotiation goals.

Based on the research of Harvard professor Max H. Bazerman, and further developed by Brian Dietmeyer and his colleagues at Think! Inc., the Strategic Negotiation process shows that ultimately every negotiation follows the same “blueprint,” and how by filling-in that blueprint you and your customers can get even more out of a negotiation than either of you expected going into it. The four-step process includes:

  • Estimating the Negotiation. Determining what affects – both positive and negative – not reaching agreement will have on both sides, and what the real issues are in the negotiation.
  • Validating the Estimation. Determining the accuracy of the estimates made in the initial assessment.
  • Creating Value. Creating measurable value by structuring several alternative deals that provide both sides with what’s essential to them, as well as additional benefits.
  • Dividing Value. Presenting “Multiple Equal Offers” to enable both sides to divide the value created by the Strategic Negotiation process.

The changing business environment demands a new way of looking at negotiation. In Strategic Negotiation, Brian Dietmeyer and Rob Kaplan show you how, by seeing negotiation as a process, and applying that process, you can create measurable business value, generate more customer satisfaction, and increase your profits, regardless of the type of product or service you sell.

Click here to purchase the book on Amazon

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