VALIDATING THE CONSEQUENCES OF NO AGREEMENTESTIMATION


In the first step of the Strategic Negotiation Process, covered in Chapter 4, you estimated both your own CNA and your customer’s, with the understanding that you would still need additional information about the latter. This second step is designed to enable you to determine whether your initial estimation was correct and to fill in whatever blanks there may be.

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Some of the things people are typically still unsure of after their initial estimation are:

  • What really is the other side’s CNA?

  • What are the elements of that CNA?

  • Are those elements costs or benefits, hard or soft, and short term or long term?

  • How does the other side see its CNA?

In the initial estimation of the other side’s CNA, you used what you knew about the customer from prior dealings with him or her, your understanding of the customer’s needs from the sales process, and your personal knowledge of both your most likely competitor and other alternatives that the buyer might have. But now it’s time to broaden your knowledge of the other side’s CNA by looking for answers beyond yourself to others in your organization.

Gathering Information from Others in Your Organization

The most likely sources of information in your organization are those who have handled this customer before, those who have worked for the customer, and those who have worked for your most likely competitor in this deal. Virtually every organization I’ve ever been in employs people who have worked for either its customers or its competitors. I have found, though, that the hardest thing to do is to find out exactly who those people are. In addition, the larger the selling organization, the harder it is to find them. At the same time, however, the larger the selling organization, the more likely it is that people are there who will be able to help you.

The most effective way to find these people is to reach out to as many department heads as possible. These should, of course, include those within the sales function, but it should also include people in manufacturing, finance, marketing, and other departments. Let those department heads know you are involved in a very important negotiation with the customer, ask them if anyone in their group has worked for or with the customer or for one of your competitors, and tell them that you would appreciate those individuals providing you with 10 to 15 minutes of coaching. Once you’ve reached someone who can help, you should ask that individual to provide you with as much information as he or she can covering the four questions noted above.

Of course, exactly from whom you choose to solicit information depends on what you’ve estimated the other side’s CNA in this negotiation to be. For example, one of our clients is a provider of data and data services, so of the three most common customer CNAs—buying from one of their competitors, doing it themselves, or doing nothing (i.e., spending the money on something else)—our client’s salespeople often found themselves up against the second. “Why should we buy from you?” they heard from potential customers. “We can build it ourselves, and it’ll not only be cheaper but it’ll be better customized for our needs.”

Faced with this situation, the company’s salespeople went to those in their organization who had the responsibility for designing, implementing, and managing databases. What they asked the designers for was a sense of the elements of the client’s choice to build their own database, things like collecting the data, rationalizing the data, updating the data, global versus national data, maintaining accuracy, and so on. Armed with that knowledge, the salespeople were better able to formulate specific questions about each element of the customer’s CNA and determine, for each of those elements, whether it would actually be better for the customer to do it themselves.

Researching Publicly Available Data

Although the best sources of data are typically yourself, those within your organization, and your customer, there’s also a wealth of publicly available information that can be very useful to you in validating your estimations of the customer’s CNA. Bear in mind that in the validation step you want to gather all the relevant and accurate data you can so whether someone says “I can get it better, cheaper, and faster elsewhere,” “I can build my own,” or “I can use the money better for something else,” you’ll be able to dissect those statements and consider every element that should be considered. And there’s a wide variety of publicly available data that can help you do that, including industry journals, industry trade associations, independent third-party analyses (such as white papers), and Lexis/Nexus searches. Sometimes, in fact, sources like these can present you with real finds.

For example, one of our clients is a firm that sells vitamin supplements to local and factory farms that produce chicken, beef, and pork. The supplements can be delivered to the animals in several different forms, the two main ones being powder and liquid. Some of the firm’s clients argue that one or the other form is better, faster, and cheaper; and some argue that the efficacy and ease of use for the other is greater. But the fact is that neither form is always better—it depends on a variety of other factors. Using publicly available data, such as industry white papers, articles, and studies comparing the two primary methods, our client’s salespeople can determine which is most advantageous in any given situation. They can then use the facts to counter irrational arguments and old-school tactics, and adjust the customer’s thinking to a more reality-based CNA. Again, it’s important to remember here that the customer sees your offer as a gain or loss based on his or her perception of the CNA, so it’s essential that you make sure that perception is accurate.




Strategic Negotiation. A Breakthrough Four-Step Process for Effective Business Negotiation
Strategic Negotiation: A Breakthrough Four-Step Process for Effective Business Negotiation
ISBN: 0793183049
EAN: 2147483647
Year: 2003
Pages: 74

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