The Wisdom of Crowds - Collaboration, co-creation, crowdsourcing: it's all about opening up and letting the people in to engage with your brand.

Marketing can seem more fashion- parade than a firmly grounded and principled discipline – a neophile's paradise.

Wave after wave of latest things – the newest, shiniest technologies, media or routes to market – come racing towards us, each heralded by a gaggle of vendors demanding a complete rethink of everything that we thought was best practice.

No wonder many of us feel slightly giddy: we're torn between holding on to what we know and trust, and jumping on the latest thing lest we get left behind. Yet, in all too many cases, the latest thing is soon forgotten, along with the exhortations of those who proclaimed the end of the world as we know it.

That said, some things have proved to be game changers: the explosion of the internet, digital technologies and communications tools; the rise of behavioural economics; the 'social' hypothesis that sees human behaviour as a function of our social nature, not humanity as thinking and calculating independent agents; and the explosion of new kinds of research and analytic technologies that move beyond simple ask answer models of the past.

The rapid rise of what we're calling 'collaborative marketing' – of marketing that does things with (rather than to) other parties (be they consumers, competitors or suppliers) is one of these game changers.

Indeed, the wide extent of the spread of collaboration into every dark corner of the marketing forest (as the other articles in this Admap Focus suggest) underscores the importance of this to today's marketer.

The fact that it seems to be part of a bigger social and cultural trend ('reality TV' is surely nothing more than the act of making viewers into TV stars; phone ins a way of recruiting the audience into the show – while at the same time offsetting some of the costs of production) serves to demonstrate that this is no mere short- term fad confined to marketing geeks alone.

So what exactly do we mean by 'collaborative' marketing? There are many different ways in which collaborative marketing is evidenced, but they all share the same fundamental stance of trying to do things with, rather than at, or to, people.

Part of the drive behind this – as Procter & Gamble's AG Lafley highlighted – is that even the best companies are no longer capable of creating value on their own at the required rate or standard; they need to seek help from the outside.

Allied with this is the acknowledge ment that the world is rather more complicated than our traditional company based models have suggested. People are far more interested in each other than they are in our brands, our stores and our advertising.

Certainly, the new media landscape makes it much more complicated to launch or maintain brands compared to some years ago.

Equally, while much of marketing science equips us for marketing and advertising in the 1990s, our knowledge about social influence and diffusion, how they work and how to optimise them remains patchy at best.

Finally, it cannot be coincidental that the rise of collaborative marketing activities is occurring at a time when both hardcore science and mainstream technology are emphasizing our species' social nature and our profoundly collaborative wiring: we're getting increasingly comfortable talking of social networks and of memes, spread and the like.

The old assumptions of human life as an essentially competitive experience are being overturned in front of our eyes by cognitive and behavioural scientists: we are a 'we' creature, not a 'me' one.

Collaboration takes many forms in modern marketing. For simplicity I have divided them into four, not mutually exclusive, strands:

1.Collaborative communications – communicating with and through people outside the company, rather than at or to. At its simplest, this might just be an acknowledgement of the profound truth that 'it's at least as important what your audience does with your advertising as what your advertising does to your audience'.

Generations of account planners have touted this wisdom in conversations with researchers and advertisers who are interested in 'per suasion' scores and the like. Now, the insight becomes more relevant than ever: for many would be 'viral' creative pieces, pass on and reworking rates ('mashups') are almost always at least as important as traditional communications research metrics.The teams behind the Honda 'Dreams' and
Cadbury's 'Gorilla' ads explicitly refer to these kind of metrics in demonstrating the effectiveness of their efforts.

Equally, with the rise of word- of- mouth marketing, what the audience does in response to the communication is clearly going to be more important than how it impacts on them or what it says to them.

Creative work which seeks to harness social influence is clearly going to have to work 'with' and not 'on' or 'at' – at least, the heavy lifting will be done through 'with'.

And, the rise in user- generated content (UGC) is further evidence of the same thing: increasingly, the democratisation of access to both film and other production and distribution technologies is allowing consumers to make their own content (and not just spoofs of 'proper' advertising).

Dorito's has used America's advertising showcase, the Super Bowl, to provide consumers with a platform to do this, with great success.

2 Co-creation – collaboration in the development and delivery of products, making things 'with' and 'through' folk outside the company and its orbit. Increasingly, marketing is looking to create and develop products together with outsiders.We are all now familiar with fashion retailers' collaborations with famous designer or model names that seek to bring perceptions of quality and interest to the retail offerings.

Then there's the fashion for celebrity music remixes to boost interest and attention in new music.

The software industry's 'beta tests' are similarly collaborative: they are rooted in the practical realisation that it is only by working with users and key clients that software and the services that depend on them can be debugged and tailored to really meet today's users' needs and expectations – these things being just too complicated to get right otherwise.

TV ad: Lynx Twist - ChangesCreative from Xtreme Information

More recently, a number of brands have reached out to their users to go further and actually invent products with a small group of consumers: 'Twist', the latest Axe/Lynx fragrance, is the product of an
intensive co creation project.

Lego's revival is widely credited to the decision to work with, rather than shun, the adult users of the brightly coloured bricks.

They have become the beating heart of the organisation – the real owners of the brand. New recruits are encouraged to spend extensive periods of time at 'fan events'. Similarly, the online music service Spotify focuses most of its marketing effort on listening and working
with its community of music downloaders.

And features that Twitter users take for granted, such as 'RT' (retweeting) and the '@' sign to denote usernames, were created by the user community itself.

3 Collaboration
with other brands and organisations. Another, perhaps more familiar, form of collaboration is demonstrated when two different brands or organisations go to market together for mutual benefit.

Marmite's Guinness variant is just such a project. Brands that align themselves with particular charities also fall into this camp, but there is an important distinction here between mere co branding and
collaboration.

While the former might be just shared flags of convenience to reduce risk, the latter suggests that both parties seek to benefit from making something new and different together.

Indeed, many businesses are realising that providing a platform for other businesses is a good thing; a large part of the iPhone's appeal lies in the huge secondary market for iPhone apps.

4 Crowdsourcing
– resourcing ideas and products in a more open and, to some extent, collaborative way. This form of collaboration is essentially characterised by many individuals (hence 'crowd') or individual companies collaborating with each other on behalf of an individual buyer or company sponsor, either to solve complex problems together, or to offer alternative solutions to the same problems.

The idea is partly rooted in James Surowiecki's bestselling book, The Wisdom of Crowds, which describes the curious ability of 'we' to be smarter than even the smartest 'me' under certain circumstances.

A useful way of thinking about it is the blackboard in the movie, Good Will Hunting, which is left open for passing mathematicians to contribute solutions to problems posed there. The crowd uses this to create solutions together.

Crowdsourcing can range from the creative net of Asian electronic engineers that Apple used to create its iPod, to the community of tens of thousands of volunteer writers who have built Wikipedia. At a more parochial level, online help forums do a similar job for consumers of all sorts.

One of the big appeals of crowdsourcing is that it can reduce costs to the buyer – it's often cheaper for the crowd to solve a problem than to pay for a traditional business to do so.

Collaboration challenges a number of our ideas about companies and their role in the world.

In particular, as leading US marketing blogger Hugh Macleod points out, collaboration highlights the increasingly porous membrane that delineates the inside of a company from the outside. For those of us who like clear lines, and black and whites, collaboration presents all kinds of blurry emotional and practical difficulties.

Equally, it also serves to underscore the selfishness of received thinking styles inside companies, organised to optimise the company's needs, to maximise value for it. Collaboration, by contrast, looks for sustainable win win solutions for long- term mutual benefit.

Starting to do it is also scary. It can highlight how little we really know our customers. For all the millions of dollars we spend on market research and the longstanding and public commitments to 'customer orientation', I'm struck by how ill -at- ease most marketers still are in the company of the people they are supposed to understand and whose needs they, according to the traditional definitions of marketing, are supposed to focus on.

But above and beyond all of these, collaboration challenges us to see the company, and our
marketing, as part of a larger eco- system, as a participant in a larger dance. Collaboration is messy, often unpredictable and, with the exception of those who insist on retaining control, more fun than the old world. But to be honest, I'm not sure we have a choice.

Rethinking Marketing - Because companies can now interact directly with customers, they must radically reorganize

and to put cultivating relationships ahead of building brands.

• Companies have powerful technologies for understanding and interacting with customers, yet most still depend on mass media marketing to drive impersonal transactions.
• To compete companies must shift from pushing individual products to buying long-term customer relationships.
• In this aggressively interactive environment, companies must shift their focus from driving transactions to maximizing customer lifetime value.
• This may mean changing strategy and structure across the organization--and reinventing the marketing department altogether.
• The marketing department must be reinvented as a ‘customer department’ that replaces the CMO with a chief customer officer, makes product and brand managers subservient to customer managers and oversees customer focused functions including R&D, customer service, market research & CRM.
• These changes shift the firm’s focus from product profitability to customer profitability as measured by metrics such as customer lifetime value and customer equity
• It means that product managers must stop focusing on maximizing their products' or brands' profits and become responsible for helping customer and segment managers maximize theirs.
• Once companies make the shift from marketing products to cultivating customers, they will need new metrics to gauge the strategy's effectiveness
• The shift from marketing products to cultivating customers demands a shift in metrics as well.
• This organizational transformation will uproot entrenched interests and so must be driven from the top.

Think Ahead While Cutting Back: Marketing Priorities in a Recession

• No company can succeed by cutting expenses alone. But the practical necessity of today's world is cut, cut, and cut some more.
• Yes, we all should have been smart enough to build sufficiently robust measurement capabilities before the dramatic assault on our budgets began. Yes, we should have put some water in that bucket before the fire consumed so much of the house that marketing built.
• But we didn't. So where do we turn once all the "fat" has long since been trimmed and all that's left is muscle and bone? And how do we break the downward spiral of cut, cut, and cut some more?
• Take a step back and define the objectives for making smart cuts:
  • Achieve the target reductions the CEO is asking for (most people stop right here).
  • Support the company strategy for competing successfully.
  • Conduct a thorough and unbiased analysis of all options.
  • Preserve your credibility. Live to fight again another day.
  • If you're not balancing all of these objectives, you'll suffer death by 1,000 cuts yourself.
• Have you sufficiently reinforced your relationships with profitable customers? Now may be the time to invest in retention, as acquisition gets put on the back burner. Acquisition costs often require a period of time to recapture, and you may not have that luxury.
• Your customers and their needs are probably changing in response to the economy as well. Is your research effectively capturing their evolving wants, needs, and value-calculus? If not, you may need to spend a bit more on this issue before you can cut back.
• Finally, present your findings with passion, but not bias. The mantra of the moment is "having run many options by the good people in Finance and Sales, we all feel that the smartest course of action is..."
• Now is exactly the time to begin building that measurement capability you really wish you'd had over the past few months.

Leadership Lessons from Abraham Lincoln -

• Abraham Lincoln’s genius was to manage the ambitions and egos of his rivals to form a team that could confront the challenges of civil war
• His ability to create a team was rooted in an extraordinary level of emotional intelligence. He learned from his mistakes, he shared responsibility for the mistakes of others, and he did not hold grudges.
• Lincoln’s experience, like that of other presidents in times of emergency, gives hope that the United States and other democracies will weather the current crisis.
• If the new U.S. president can learn from Abraham Lincoln so too can business leaders who are grappling now with similar questions of how to lead in turbulent times.
• Lincoln came to power when the nation was in peril, and he had the intelligence, and the self-confidence, to know that he needed the best people by his side, people who were leaders in their own right and who were very aware of their own strengths. That's an important insight whether you're the leader of a country or the CEO of a company.
• Those were the days of no television. Leaders weren't worried about cable news or their BlackBerrys. They weren't multitasking; they had time to reflect. It's a luxury many leaders just don't have today, and that's a real loss

You Need a Vacation

by Michael Dalton Johnson

You deserve a vacation....but not just any vacation. You need one that will restore your spirit, enthusiasm and energy.

Spend your time far away from cell phones, computers, newspapers, radio and television. These are electronic leashes which bind you to a complicated and stressful world. Simply leave them all at home. It's easier to do than you may think.

Get close to nature. Take walks. Enjoy sunsets. Sleep in. Read a good book. Nap. Laugh. Have a long soak. Go for a drive in the countryside with no destination in mind. Have a slice of pie. Smile. Breathe. Unwind.

Forget deadlines and obligations. Forget the clock. Eat only when you're hungry. Go to bed only when you're tired.

Don't stand in line. Steer clear of casinos, amusement parks and big cities.

People who have disconnected for a week or two describe the experience as heaven.

Dropping out of your workaday life is not only good for you, it's also good for business. When you return to your work rejuvenated, you will enjoy new energy, enthusiasm, creativity and far better productivity.

At first, Type A personalities (like myself) have difficulty understanding and accepting this advice. Anxiety rises in them just thinking about disconnecting. However, when they get past the anxiety and think a bit further down the road, they see a big business benefit. When they consider the possibility of perhaps doubling their productivity, it all starts making sense.

A Pastor with Guts!

It seems Prayer still upsets some People!

When Minister Joe Wright was asked to open the new session of the Kansas Senate, everyone was expecting the usual genialities, but this is what they heard:

Heavenly Father, we come before you today to ask Your forgiveness and to seek your direction and Guidance. We know Your Word says, ‘Woe to those Who call evil good,’ but that is exactly what we Have done.

 

We have lost our spiritual equilibrium and reversed

Our values.

We have exploited the poor and called it

The lottery.

We have rewarded laziness and called it

Welfare.

We have killed our unborn and called it

Choice.

We have shot abortionists and called it

Justifiable.

We have neglected to discipline our children and called it

Building self esteem.

We have abused power and called it

Politics.

We have coveted our neighbor’s possessions and called it

Ambition.

We have polluted the air with profanity and Pornography and called it

Freedom of expression.

We have ridiculed the time-honored values of our forefathers and called it Enlightenment.

Search us, Oh, God, and know our hearts today; cleanse us from every sin and set us free.

Amen!

The response was immediate. A number of Legislators walked out during the prayer in Protest.

The church is now receiving International requests for copies of this prayer from India, Africa and Korea.

Eccentricity is not, as dull people would have us believe, a form of madness.

It is often a kind of innocent pride, and the man of genius and the aristocrat are frequently regarded as eccentrics because genius and aristocrat are entirely unafraid of and uninfluenced by the opinions and vagaries of the crowd.

How wonderful it is that nobody need wait a single moment before starting to improve the world!

Life consists in what a man is thinking of all day. -Ralph Waldo Emerson, writer and philosopher (1803-1882)

“Shallow men believe in luck, believe in circumstances...
Strong men believe in cause and effect.”

Ralph Waldo Emerson (1803–1882)
American writer, activist

“Great spirits have always encountered violent opposition from mediocre minds.”

Albert Einstein (1879–1955)
Swiss physicist

"It is wonderful what you can do when you have to."

C.S. Lewis (1898-1963), Irish writer, scholar

“One day in retrospect the years of struggle will strike you as the most beautiful.”

Sigmund Freud (1856–1939)

Disarming The Price-Squeezing Customer

Six Ways to Eliminate Price Concerns

What's a salesperson to do when customers are more concerned with getting a low price than getting the best value for their money? Paul Cherry shows you how to get customers to look past the price tag by uncovering what they value most.

 

You've been prospecting this company for ages, and finally got your foot in the door. You're apprehensive because you're meeting with the purchasing agent –– not the big boss, but it's a start –– and you know you'll get hammered on price!
The agent shakes your hand. "Tell me what you can do for me –– and how much it'll cost me." Already, he's squeezing you on price! You want to make him recognize the value of your business solution. He only wants to dance around it, singing, "Sure, value's important. But how will you save me money?" To land this sale, flip the record and hear what he's really singing. Here are six techniques to build rapport with mid-level decision-makers and prevent them from getting hung up on price.

Understand their biggest values
For purchasing agents, this issue runs deeper than price or value. They want to feel like they matter. They deal with so many salespeople making promises that you become just another face in an increasingly maddening crowd. They're exerting what little power they have on vendors like you, and keeping an iron grip on that low price is the most obvious way they can prove their worth. Their biggest values are:

• Recognition from the boss and colleagues. They want to be recognized and rewarded for getting the lowest price, so of course they'll try to get it. Like all of us, they want the boss to say, "You just saved the company thousands of dollars! High-five!" They want their colleagues to think, "I want to be as successful as he is so the boss will high-five me, too!"


• Justification. Their self-esteem soaring, our money-conscious front-line managers think, "I've saved my company money! I'm valuable! My job's safe!" They've justified their existence, confirming to the company and the boss that they're a "keeper."

Understand their fears
Most people are satisfied with something average. With fears ranging from leaving their comfort zone, to spending more money than the boss wants, to getting fired, they're more likely to passively avoid what they don't like than to actively pursue what they want.

Understand what they're up against
Most people want to do a good job and make a decent living, but they also want to clock out at a humane hour and have time for a life. Meanwhile, they're competing for resources, clamoring for attention, mired in daily obligations. Consequently, they unwittingly overlook the bigger picture. Show that front-line manager a solution that'll bring the big picture back into focus. Pitching how you can help his company increase profitability is more meaningful when it directly impacts his year-end bonus. Maybe he's thinking, "Yeah, like my boss needs to drive another new Lexus while I can barely get around in my ten-year-old junker!"

Understand their need to feel appreciated
When companies keep a narrow focus on increasing profitability, people can slip below the radar. When the company has a great year, the CEO rarely says, "We owe it all to our purchasing agents toiling down in the basement, saving us 5 cents apiece on widgets."
Many workers you deal with feel overworked and under-respected. All they ask is that you make them look good. Provide them with solutions that will take paperwork off their desks and keep their bosses happy with them, and they'll be happy with you.

Focus on the lowest TOTAL cost
Avoid getting cornered on price by talking about the lowest total cost. Instead of just the up-front, out-of-pocket cost for the company, show how lowest total cost results from on-time delivery, faster time to market, support, quality, peace of mind, ease of use, reduced down time, overhead, and labor.

Utilize questions to uncover what your customers value
Understand what makes customers tick; see what's really driving them. When you hear "lowest price," don't scamper like a squirrel - instead, ask good questions that go beyond the price issue. You'll find out what they really want and why they want it, as opposed to what they're telling you they want.
Add some of these questions to your arsenal of sales techniques:
"Share with me the criteria you use when you're selecting a _____."
"When it comes to price, quality, service, delivery, performance, customer support, and ease of use, which matters most to you? Which matters least?"
Say your customer cited performance as a priority: "You mentioned that performance is important to you. Would you share with me your definition of performance?"
"So that I'll best understand your needs, can you walk me through a situation in which your standards for performance were not met?"
"Let's assume you're looking at three potential vendors who meet all your criteria (including price). How would you make your final decision?"
"You mentioned that the most important thing for you is price. How does that compare to what engineering (manufacturing, design, production, marketing, fulfillment) thinks is most important?"
"What's most important to your customers?"
"Think back to when you first chose your current product. What were your selection criteria? Based on what you know now, how would those criteria change?"
"Think ahead to three years from now. What do you anticipate will be most important at that time –– the initial price of the product? Or the peace of mind you'll have, knowing you're getting the necessary support long after a purchase was made?"
"Which characteristics of this product are 'must haves' for you, and which are optional?"
"The changes we've discussed would result in an increase in profits. What would you do with that increase in available funding?"
"What alternatives to this problem have you considered?"
"You have told me that your company has allocated Rs._____ for this product. How was that amount determined?"
Show your customers your solution will help solve these problems. Get them to define value based on their specific needs, and it'll be much easier to justify your solution as a smarter investment over lower-priced alternatives. Once you know your prospects' needs, inside and out, you'll be able to present your services and solutions as a great value at any price.

COMPETITIVE ADVANTAGE

by-Michael Porter

  COMPETITION is at the core of the success or failure of firms. Competition determines the appropriateness of a firm's activities that can contribute to its performance, such as innovations, a cohesive culture, or good implementation. Two central questions underlie the choice of competitive strategy. The first is the attractiveness of industries for long-term profitability and the factors that determine it... The second central question in competitive strategy is the determinants of relative competitive position within an industry....

Neither question is sufficient by itself to guide the choice of competitive strategy. A firm in a very attractive industry may still not earn attractive profits if it has chosen a poor competitive position. Conversely, a firm in an excellent competitive position may be in such a poor industry that it is not very profitable, and further efforts to enhance its position will be of little benefit. Both questions are dynamic; industry attractiveness and competitive position change. Industries become more or less attractive over time, and competitive position reflects an unending battle among competitors. Even long periods of stability can be abruptly ended by competitive moves. Both industry attractiveness and competitive position can be shaped by a firm, and this is what makes the choice of competitive strategy both challenging and exciting.

We are NOT Human Beings going through a Temporary Spiritual Experience,
We are Spiritual Beings going through a Temporary Human Experience!

I Don't Have the Budget

By Jim Kasper

If you've been in sales for any length of time, you've heard this one. It really hurts when you've expended a lot of time and effort. This Sales trainer shows you how to respond, and, more importantly, how to avoid this classic objection in the first place.

It's a recurring theme these days. You know the "drill." You've done your homework, the prospect likes what you're offering, and after all of your hard work, you see yourself walking out with an ....order! You're ready to close. Then you hear the dreaded, "I really like what I see, but I just don't have the budget."

The typical responses to this statement are:

• You say, "O.K., Ms. Prospect, I'll check back with you later?" Then you leave.


• You handle it as any other objection by paraphrasing, clarifying, and restating the benefits.


• You realize that the prospect truly doesn't have the money.


• Relying on your keen instincts and superlative sales abilities you continually try to close, irritating the prospect who calls security to have your carcass escorted to the parking lot.

 You decide the most prudent course of action is to argue the cost vs. the benefits. "Yes, but what I've proposed will provide an R.O.I. of 133% within 18 months!"

Of the above responses, only one would be deemed proper. There are times when the customer really does not have a budget. The reasons for this may be:

• The customer may be too small to afford your services.


• It may be the end of the budget or fiscal year.


• Business may be particularly slow.


• Business may be good, but cash flow is slow.


• The company is cutting expenses to appease the "analysts."

How do you determine if these are legitimate reasons when they come from your customer's mouth? You always ask open-ended questions about these topics as part of the normal fact-finding mission in your sales interview. By doing this, you bring out budgetary restraints at the beginning of the sales cycle, not the end. Preface your questions with the statement, "Mr. Prospect, I have a few background questions to ask you that will help us determine the most effective way to proceed." Then, ask:

 

"Tell me about your fiscal year."
"How has business been lately?"
"What type of seasonality do you experience?"
"What was the last time you made this type of [product / service] purchase? How did it go?"

 

In other words, predetermine the fiscal condition of your prospect or customer before he or she uses one of these conditions as an objection. Like a good tailor, you've got to "size them up."

Upon hearing, "It's not in my budget," consider the following to sell your prospect:

Establish a financial proposition
A temporary personnel placement agency, specializing in the insurance industry, was approached by an insurance trade association to sponsor a member educational program. Although the association was a prime target for prospects, the cost of the program was thousands of dollars more than the firm expected. The small firm did not have the budget. How did the association close the deal?

The insurance association representative asked the placement agency owner how many dollars the average insurance association member spent with the placement agency annually. Then the association representative figured it would only take three new customers to pay back the sponsorship fee. Next, the association representative helped the agency develop a plan to obtain six new customers by sponsoring the event.

Be a budget planner
In January, a large financial services organization solicited proposals from several sales training firms. When the successful proposal was identified, their CFO realized the cost of the training was more than remained in the training budget for the fiscal year. The fiscal budget started in June. What did the successful sales training company do to close the financial institution?

Realizing that the "not in my budget" was legitimate; the training company agreed to aid the financial institution in planning its next fiscal year's training budget. The training company literally became a planning partner with the financial organization.

"I guarantee it."
In today's fiercely competitive market, sometimes prospects play the "It's not in my budget" card just to see what concessions they can get out of the deal. When appropriate, and when you know who you're doing business with, try the guarantee approach. Many companies offer a performance guarantee to their customers calling for a product or service to meet a certain benchmark by a specific date.

Here's an example. Recently, we were asked to make a training proposal to a major electronic manufacturing firm. During the initial interview, the firm said that the training was not budgeted and they were looking for some creative approaches to "sell" the program to senior management. We then offered a guarantee - within 60 days, the program was to provide a specific R.O.I. If that R.O.I was not met, the cost of the program would then be refunded. When presented with that solution, management promptly allocated the funds.

Keep these suggestions in mind when you are presented with the "no budget" response:

• Never, ever automatically offer a price concession.


• Don't instinctively accept the response at face value; always probe for the "hidden" reasons.


• Ask yourself, "Can they really afford what I'm selling?"


• Ask the prospect, "What are your future plans to buy?"


• Ask yourself, "How badly do I want this business? When? At what cost?"

Following these guidelines will give you insight on your next step and help you determine whether to pursue the opportunity or withdraw and head down the road to your next prospect.

Negotiating to Win

Julie Thomas shows you how the negotiating process takes place throughout the sale and what you can do to position yourself to win.

In today's hyper-competitive markets, prospects are more risk-averse than ever. Many prospects focus on every aspect of every purchase to prove that they are getting the best possible deal. Often they have "professional purchasers" who are fully responsible to get the best deal possible. At the same time, your goal is to establish enough value to minimize the cost discussion when it is time to close the business. As a seller of goods and services, your company's profits are directly affected by your ability to meet your customers' needs while meeting your own goals.

Sales is the business of relationships, and like any relationship it requires give and take. We typically expect the give and take, also known as negotiating, to happen during proposal and contract discussions; however, in reality, we continually negotiate throughout the sales process - on everything from picking a time to meet to determining who will participate in a demo to hashing out the terms and conditions of a contract. Negotiations are most productive when conducted objectively, and at the right time.

Here are a few points to remember when negotiating with prospects:
•Understand the "need" behind your prospect's position. In any negotiating situation, your responsibility is to understand your prospect's criteria –– as well as your own –– and ethically create positive outcomes for all parties involved.

•Know your empowerment level; you could find yourself in dangerous territory with either your company or prospect if you commit to things that are outside of your span of control.

•Define what constitutes a "win" for all parties. Here, it is critical to consider what you want as well as what your prospect wants.

•Be clear on what you can negotiate and what is non-negotiable. For each of us, there are non-negotiable items that are not open for discussion or compromise. It is important that we understand those and are clear about what we are willing to negotiate on.

•Maintain composure; respond rather than react and maintain a high level of rapport every step of the way.

•Finally, know your "walk-away" position; some deals are simply not worth what you are being asked to give up.

A key to successful negotiating is to understand when to negotiate in the first place. Negotiating components of deliverables, terms or pricing before the prospect is actually "sold" on your solution will cause you credibility problems. It is important not to negotiate until you have clearly shown the prospect what his world will be like after he acquires your product or services, and established both business and personal value with the individuals you are working with. Also understand the prospect's process for purchasing so that you are not caught in a position of multiple negotiations with multiple individuals.

There are typically three things to negotiate at the end of your sales cycle:
Deliverables, Terms and Conditions, and Pricing. One thing to keep in mind is that your price is always a function of your deliverables and your terms and conditions. As you prepare for your negotiation, there are three key strategies that can help you through the process:

Strategy #1: Trade-offs
Successful negotiations are a balance of meeting both parties' needs. With trade-offs, your objective is to meet both parties' needs by trading items from one category with items from a second category. For example, you may be willing to reduce your price with a change in terms or deliverables.

How it might sound:

"If you want this product shipped to multiple locations, are you willing to accept different payment terms?"

Strategy #2: Embellishments
This strategy requires you to add incremental value in one category when you can't make a trade-off to accommodate the prospect. For instance, you may throw in deliverables that have little cost to you but are large value to the prospect.

How it might sound:

"If we expand the training class from fifteen to twenty people, are you willing to move forward today with the terms and investment we have discussed?"

Strategy #3: Compromise
Compromise involves finding the middle ground in the same category. Splitting the difference on price, payment terms or a specific deliverable could be examples.

How it might sound:

"If we can split the difference in payment terms between net 10 and net 30, can we move forward today?"

Think about a current sales cycle that is nearing the closing point. First, analyze all areas of your qualification process to confirm that you have a truly qualified prospect. If you find that you are not working with a qualified prospect, re-engage on the sales cycle rather than the negotiation.

Next, prepare for any potential negotiation by identifying both the prospect's and your own ideal position. Make a list of what is non-negotiable from your perspective, and another list of what you think your prospect might require to move forward. From these two lists, develop potential win-win negotiating strategies using the aforementioned strategies:
•Trade-offs
•Embellishments
•Compromises

Negotiating for success requires planning and strong communication skills. Being prepared for the negotiation with solid ideas and strategies will put you in a position of strength!

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