Hello, Welcome to Chapter number five of our course, the five main skills of top sales reps, negotiation skills. This is probably if you have to wait all of the five skills that I have in this course, probably the most important. Having that set, you cannot neglect the other ones, you can be very good at negotiation. But if you're not able to build up long lasting relationships, if you're not able to know your market, if you're not able to have empathy and persuasion, you're gonna have a big advocate, even though you have good negotiation skills, negotiation skills. So yes, work communication skills, have them optimized, but don't neglect the others. In this chapter.

I have to warn you, I don't have any magic wands, or tricks to share. But I have our best practices to lead and to manage long lasting business. This is unsustainable business relationships. Let's take a look of what I have in. The lessons that I have in this topic are steps of negotiation, value versus price, price alternative leavers pricing mechanisms, when negotiations, buyer objections and use of concessions. So, here we are in our first lesson, steps of the negotiation.

The intention of this lesson is to give you insights of how the negotiation evolves in general. And normally There are five steps. You don't have to go through all of them in all negotiations. They don't have to be precisely in this sequence. But this is the standard What I have here is a standard. So we have preparation, we have discussion, we have proposals, we have bargaining.

And we have deal. depending if it's an existing customer or a new one, you might skip some of these steps. Or you might change their positions, but it's important that you are aware of them and why they are important. First step is preparation. preparation is key. Failing to prepare is preparing for failure.

Remember that so beforehand, when you have a meeting, when you have a discussion when you have an inquiry, prepare yourself. find out who's the customer, what do they need? What are their specific requirements? What is their Buying Criteria? Who are the current suppliers? Is this a customer that you want?

For your company for your portfolio? At what level? Do you know everything about the customer? Do you know what their their real intentions are? So try to, to find out or to answer as many of these questions as possible. The more the better.

And for all those questions that you don't have an answer, don't assume don't ever assume. If it's not clear, don't assume Yes, put them on hold, because you're gonna have time to use them later on in the second step, discussions. assumptions, forget it. Or you have real information, you have facts. You have cross information to match. assumptions.

It's a very wrong method. Ask, ask simply, they might not assume that's fine. But ask. So preparation is very important whenever you go to a meeting whenever you have an email from the customer, phone inquiry, etc. Before disclosing any information, gather as much information as you can in order to give the right How can you I can if a customer and it's it happens very often a potential new customer approaches you and ask you for a price immediately. can be very happy.

Hey, it's a potential new customer. Come on, let's grab him. But what do we know about them? Normally what I do is Hey, hold on. This is not a supermarket. First, let me know what you need our product for.

What is your market? How much we're gonna buy how regular you want to buy. Can you afford Of course, this is a question that I don't ask, but I have to find out internally. So there are a lot of things that you need to find out in order to come up with a proposal. Because if it was so simple, if business was so simple that the customer would call you to give you a price and you give them a price, your company would not need you. They could just put the pricing based on their system and that's it.

Sales Reps, sales, executive sales managers, account managers, you name them. They are there. Because each customer is specific is each customer has specific requirements, needs, wants and has a specific, specific environment. And that's where you can tap in and add your value. If it would be to give prices just like they're on the phone or email or meetings whatsoever. Your company would not need you.

Your company needs you in order to explore the gaps. The problems, the issues the the improvement needs that each customer has so that you can add value. And then you will not have one price you'll get one price for each customer because they are all different. And that's starts with the preparation. Okay. Next step, it's the discussion.

So all the questions that you couldn't answer by yourself that you couldn't find information, bring them on the table, bring them on discussion, ask the customer openly. Ask the customer everything that will help you to build up your proposition. So forget assumptions. Ask them openly. And again. There are some some questions that probably your customers will not answer question of protection of their own sides because they want to show any weakness because they don't.

They don't want to tell you that they are fed up with the other suppliers or that the other supplies are getting too. Be sure to their prices, things that will not tell you for sure. read between the lines. That's why it's very important to listen. Active listening not to tackle your own assumptions, but to find out things that are in between lines. discussion, it's where you put all the question marks on the table.

And of course customer will also ask you what it is about. But here again, we're not coming up with prices hold on with prices, we are just trying to map out what are their needs, what are their requirements? What can you bring them what can you give them what can you be better than competition, so we are just trying to wait all of that. Okay. And it's out of these your preparation and then In your discussions that you want to come up with proposals, but with proposals for the fixed price, don't lock yourself yet, keep options open, keep options open, tell them look, if you give me this, I probably can give you that. If you're going this way, in this way, probably I can have that in that just to give them a glance of where we stand, because then they will be more specific on what they want and what they need.

And then you can be also more specific on what you can offer. And that's all done during this phase of the proposal. Look, you told me that you need this quantity for this timeline, according to these quality, these logistics etc, etc. This is what I can offer you in this period of this partition of the product of services under these conditions etc etc. And if you want this is also possible if you want that is also possible but at an extra cost etc data center leave it open matching what they want, but open so that they can come up with a refined query in terms of okay this is what we want precisely and then you can go and and tackle that in between this, this this step of the proposals of course, customer will tell you will change will challenge you and say okay, I want this, but I want I want this but I worked with that and with that and that's where you have to start Instead of bargaining, it's kind of trading a bit concessions.

So, customer wants your option A, but with the detail from the option B but not with the price that you had. So, you have to tackle What are your possible concessions Where can you make some concessions Where can you but don't give concepts concessions out of nothing because customers will learn from your behavior and attitude. And if you make concessions once for nothing, they will use it in all subsequent negotiations. If you make any concession make it an exchange of something. Okay, I can lower the price here, but then I do not I do not deliver in 25 portions in 25 kilobytes in 50. Try to have something in extra Change so that they don't see it as a kind of immediate discount for nothing.

Try to always think about value, not about the price. bargaining. It's normal, even if you give your best price per customer. They will never thank you for that. They will challenge you. They will tell you hey, this is too expensive.

I avetis from competition. That's their behavior. And that's their role, they have to challenge you. So you have to reason your your proposal and your your bargain concessions with sex look, but you have this and this and this. And if you want to have it at the quality that you're asking for, I cannot go lower than this. Otherwise, I can go over but then we will not deliver in one week but in two weeks.

So, I have this kind of trading because if let's say that you have made your offer and your offer is for instance $1,000 and after challenge from the customer, you agree in $900 without a change of nothing, they will say hey, it worked $100 in my pocket. So, if you have to give away those hundred dollars traded for something more time, less quantity, lower quality, something, something. Okay. So bargaining is a tool that you have to help you unlock negotiations, but use it carefully. Use it in a responsible way. Okay.

And then you arrive to a deal and after the discussion after the proposal after the bargaining Have a deal, you have a deal. That means you shook hands. Customer said, Okay. Under these conditions, I can accept your price of $1,000. Okay, that's fine. So this is my proposal, put it very clear.

Even if you have a face to face meeting afterwards, put it by email. According to our meeting, this is our proposal. Put all the terms on the proposal, the quality delivery times the timeframe. The packaging and validity of the effort put everything very clear and the most important from this moment on no more discussions. No more bargaining. sober It's a deal.

Okay. I've seen many colleagues that even after the deal was done, customers coming back afterwards a but this and that and that. Don't fall in that trap deal is a deal and The noodles. That's why it's important to recognize these negotiation steps. There's a time for discussion. There's a time for for bargaining, there's a time for proposal, but when we reach a deal, close it, close it.

Okay, I hope this makes sense. Think about it, and try to imagine it in the real time situation. new customer or existing customer is an existing customer, okay? You don't have to go through all these steps because you know, already their business, you know, already their requirements. So, probably you don't have to go through a lot of these. Probably the discussion will be shorter, the progression will be shorter.

But you know, already, that they will bargain or not. So, again, as I told in the beginning, you don't have to go through all the steps. But it's important to be aware of them. new customer. Yes. Go through all of them.

Exactly. sequence they are probably during sometimes during the new customer goes through this preparation discussion proposals, but then it comes again with discussion because found out that you didn't know everything. So it happens. It's not uncommon. The important is when you go to proposals, and when they start bargaining at that time, it's crucial to not make many going back and forth. If you make a proposal, and they bargain, know exactly what they bargain about, try to tackle it so that you can move to do because at that point, if you have to go back again to this question, it will drain all your energy and it will give you a feeling of frustration that you're losing customer and we'll we can get your your power.

Okay, so this was the first lesson steps of negotiation. Lesson number two value vessels price as I told in the previous lesson, a lot of customers will just approach you asking for your price. And of course, if it's an existing customer that you know for long enough to know their business, and that we have a ratio, the relationship which etc, etc. Okay, that's normal. I do which with my with most of my accounts, I have customers that we have a monthly price. So every, every month, I have to send them a price based on market circumstances, feedstock prices, etc, etc.

That's normal. But that's when you know already the value of the customer what you know already, how much you have in terms of margins and how much you have in terms of your profitability, etc, etc. for new customers for new businesses don't jump in on prices. Price is a figure, the value is something much more difficult to put a finger on. Okay, let's just let's just put here on a very pragmatic way to two situations. You have.

You have an iPhone and you have a smartphone, iPhone with, let's say $1,000 smartphone costs $300. What is the price is 1300 that's the price. What is the value? It's completely different. The value for some people of this telephone of the smartphone is as good as the iPhone. The value for people owning an iPhone is much higher than the smartphone, even if it would cost 1.5 Buy it, because there's a different perception of value.

Cars put a BMW and put a Kia. They all let's say they are comfortable, they are safe. They have a lot of features, etc, etc. They all drive the same kilometers. But people, some people are ready to pay three four times more for BMW than Kia. How stupid is that?

It's about the perception of value that you give to things that's human. So in business, you have to bear in mind, the value versus price and of course, depending on the kind of business that you are, this can be leveraged to a higher or smaller level. In some businesses. They are let's say the so called commodities Kind of where you know that the price of these products, or the price, for instance of gasoline is this or the price of milk is this that's difficult to get away from the price tag. But in most business to business discussions, it's not only about that price tag, it's about all the other things that cover up. Meaning how the product is delivered when, what about reliability?

What about special packaging? What about promotion? What about technical support from your side. So there are a lot of other components that add up to the price. And that's what you have to bear in mind. Whenever you have a new customer whenever you're chasing new customers prospects when you whenever you go to a trade fair, whenever you're challenged by your sales director to increase your your pipeline Think about value think about don't when you approach customers don't jump in price discussions immediately first find out what do they need?

What are the basics? And they will tell you, okay, we want the standards, the industry standards, even then, okay, you know that the range that you can can can go for is much smaller than if it's a customer that have special requirements that you can have a bigger vent. A smaller that will ask the industry standards have a customer that has the industry standards has a smaller bent, but still, there's something where are they placed? Where are your facilities located? but at the cost of logistics, there's always things to explore. And that's why you are in this role.

It's to explore those things. Again, if it would be about a price tag, it would be available by your company in their website and they will not need you. They need you To find out these to build up relation to to find value and to extract value, okay. So this is why we have in this lesson all these points that should always explore and should always go through. But basically my my message is always think that if it would be just about price, your company would not need you. If it would be just about price, it would be like a vending machine.

You go to a vending machine, you know the price of a coke, you put there $1 you get a coke. Why would they need a sales rep over there? So, why does a company needs a sales rep because your products are not all your price. It's about everything else that you can Offer to your customers, even if it's your relationship with them. That's a price or a cost. Okay?

So go through all these points that I have here and try to embed them and try to think if you are challenged by a customer, how could you step back and tell them, hold on a little bit. Tell me more about your business. Tell me more about your needs, be more about your requirements, so that they can make you the right offer. Okay, I hope this makes sense. In this point, it heads up to the value versus price situation that too, we talked before. So it's about exploring everything that can be used.

To build up your proposal, of course, you have your course. Of course there are market average prices, but then every situation is a situation. Can you reduce the customs of your car, the cost of your customer? You're located close to your customer so that your costs are lower and you can offer a lower price. can you offer early discounts? can you offer rebates?

Can you offer a different packaging? Can the customer pick up the goods on your company? All these are some examples of situations that can be helpful to add value to the offer and to extract value from the customer. Would it help to have a specific supply chain? Will it help to that your technical services go over there and explain the Something or help them on some new project. All these things are very valuable.

Even if you are working on an industry that has very narrowed margins or prices, but then you can differentiate. Yeah, imagine that the price, the market price is 1000 euro, that we are offering you this service. It's not very easy for any customer to value, the service that you're offering. And of course, that value might have in their head might be different than yours. And it's your role to bridge that gap. It's your role to make it bigger than it is.

Or to extract more value than than you're really given. sending them one of your technical guys one hour, two hours in one month, maybe cost you 100 that's probably at the eyes of the customer of or the benefits that they're having. It was 500. So explore all these situations. Be very broad on your thinking, don't ever confine yourself, okay, the customer is asking this and is this press, try to explore the terrain, try to explore your sales rep. You're not you're not walking price deck, you're a sales rep. Makes sense. So let's go to the next one.

This one is related to pricing mechanisms. And of course, it's very difficult to mention all the possible pricing mechanisms that you can find a market depending on the industry sector that you are depending on the products that you have, depending on the kind of specifics of your business. So what I have here are just some examples just to explain you that the price can be built in several ways and can have different different arrangements and that's fitting yourself or fitting the customer or both. So you have to think about you have to be creative. But don't complicate, don't complicate what's what's simple. I've seen very often people making complex, very complex formulas, etc, etc, with absolutely no need.

You don't need to make to complicate things. Okay? Don't complicate things. But be aware of the alternatives. Simply be aware of the alternatives. And if you have to go through alternative, use the most simple or common sense because complex formulas and complex prices will, first of all will be difficult to to to to come up with.

And we'll give a hurdle to you and to your internal people to invoicing people etc, etc. Make it simple. But vo aware of all the alternatives. Don't lock yourself only on hold. This is a traditional way. No, don't, don't do it.

Because even that, even that can be again, an add value to your customers. I have some of my customers that are on a formula based based on costs. I have some customers that we offer fixed price for a long time period. I have some customers that have a monthly price. I have some customers that we have one spot price. I have some customers that have a formula, but under any index, and it's all according to their needs, to their businesses to their markets.

And of course according to the margins that we want to have with them, he brought the open. You don't need to think out of the box. That's not the point. If you can do so of course. Don't complicate, though. Don't limit to what is usual.

Think about something thing that could be is not yours but could be useful. But don't complicate. Okay, the wind when the wind when negotiations is a myth, a lot of people, a lot of people talk about win win win win win win. And very often people tend to think, okay, Win Win is 5050. It doesn't have to be 5050. And it doesn't have to be Win Win, per se.

Depending on where you are, because you might think, Okay, this is a win win, I win customer wins, but the customer might think that he's using Actually, this is the myth, just kind of a business jargon that was created. The point here, the important point here is to close deals that that are seen fair for yourself and for the customer. That's why I say that win win is a myth because it doesn't have to be 5050 it can be, let's say 6040 if you are happy with it, who cares how much they save, as long as you have your margins, who cares how much they save in terms of competitors as long as they have a better price, they don't care if you ever high margins. So don't lock yourself on these kind of myths we brought the important is to have fair relationships fair offers, so that the customer will not feel that he was trapped.

And that next time you will be out. That's really important part is to keep it to keep it the feeling that is fair for both spots. How much is it 90 1080 2050 can be of course, we all included and that's that's this has to be with with our Human human behavior of reciprocity. So if I win, I want him to handle winners well in the fight 150 I want to win. It doesn't have to. Maybe it doesn't have to maybe it's not on the targets.

Maybe you're happier with 30 on your pocket. Don't lock yourself on this kind of myths. Aim for fair deals, aim for that when you close a deal, you are happy with it, and your customer is happy with it. And it does mean that you will always sometimes you can, I would not say lose money, but you can be at least you can be aware that you're not losing that you're not winning a lot, but that you are building a relation and it will build it up for the next businesses. That happens as well. Okay.

Hope that this makes sense. Once again. buyer objections by a lot of people talk about my objections as a as a big deal. Hey, what do I do now when customers say that it's not the right time customers say that quality is not good or that they need to talk. Whenever you have such an objection, it means that you are still in the game. Give means that you are still in the game.

Even if it was a no. Even if it was a no. What is important is that you follow up. Why is it to know? Was that too expensive? Was the quality of my product not good?

Even if it is no use it for the next time or for the next opportunity. Even if the objection is a definite No. It's important to understand why. Because it can be important not only for that customer but also for other customers can be that you are are being less and less competitive and that you reach to those other customers can be that your quality is going down and down and down and that you risk other customers so even if it is a no try to get a feedback, try to find out why. Try to find out why. And try to remain in contact with the customer not being heavy.

But once in a while go back Hey, how's life? How's your business going from our side? This is how the blueprints etc etc. Keep the foot on the door Don't ever leave a customer. objections are in fact, an opportunity. So if it's not a no if it's something else, explore it.

Explore it, this is not the right time. Okay when it when can I come back? You cannot make a decision. Okay, what do we do you have to talk to should we bring our sales director to talk with him? Should we bring our technical people to talk with him? Our quality's not good.

Okay, can you tell me more? Can we talk with your quality guys, so whether they speak with our quality people, this is the wrong time. Okay, when is the right time when are your buying cycles, all of this should be explored, should be explored. Don't just drop your arms and say, Okay, I lose the opportunity, not without it'll be very easy, very simple. Just turn your back in and go home. Those are really the exciting works.

Those are really the exciting works, to find out, to chase to understand to challenge them. I want hands and of course you're going to have all kinds of buyers and some buyers are more talkative than others and some can be very short on their on their arguments. persist without being heavy, without without being Route, tried to find out any objection is worth exploring. Any rejection is worth understanding. Put that on writing, thank you. concessions, we already spoke about concessions in here I have a little more explanation about it.

So first, first, it's important to very often that you need to have them prepared what kind of concessions you have built. For instance, you can have repaired two or three things, don't use too many, because then customer will be a bit confused. Ever feel prepared and have and then use them according to what you think will be more important or more interesting for them for the customer, not for you. Probably the less costly concession is the most important for the customer. So use them according to that relevance. If we customer has one or two objections or one or two way, challenges in terms of bargaining, bring up those concessions, okay?

I can tell me that we are too expensive. I can probably improve my price by ex. If you shorten the payment terms. That's one of them. Or if they are struggling with cash right now, you can give them extended payment terms, but then you have to have some conversation more volumes. It doesn't have to be all about money, more volumes, more business, more periods of business.

So concessions are important to have them ready. Thinking about what my interested customer and according to level of interest and they can be used to unlock any situation. Not to just Not under discussion. We are talking here about closing deal. When you see that there's a deadlock, use one concession or the other to finally close the deal. Okay.

So, this is the lesson, the chapter of today about negotiation. I hope it's not too heavy. go through each once in a while, take notes, because this is the heart of the sales rep activity. I hope that you liked it. Let's see the next chapter. Bye