Sales Negotiation, a costly afterthought |
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Surprisingly few organisations take time to rigorously examine their negotiation practices - even when multi-million dollar deals and contracts are at stake. It's an area where much latitude is often extended to employees to exercise their intuition and judgement. But Huthwaite managing partner, Greg Moore, says by setting a formalised agenda and platform around negotiation practices, companies can de-risk some of the uncertainty. Huthwaite, whose major clients include companies such as BP and IBM, helps organisations to embed a strategic negotiation culture. Moore says most people think they have much better negotiation skills than they actually do. "Most people really do see their negotiation skills as much higher [than they are], so it’s kind of seen as: ‘Look, I’m pretty skilled, I can wing it; or I know what to do... I’ve got good intuition, I can read the situation," he says. "And so, as a result, organisations don’t take the time to say, well, do they? How do we know? What are the behavioural models, what are the success factors?" He says without the research to support their negotiation tactics, companies often don't know what to plan for, and limit their preparation to what they want and "tough point" responses. "They go into the negotiation and they think they’ll just talk it out. [There is] no formalisation around that," he says. It is when there is some kind of reward or consequence or compliance around a company's negotiation principles that results begin to materialise and real inroads are made, according to Moore, who is Singapore-based. In the case of BP, one of Huthwaite's biggest 'buy-side' clients, every employee involved in the procurement process is required to undertake intensive negotiation training and restricted from negotiating on the company's behalf until doing so. "The CEO mandates compliance to this, if you want to keep your job; so everyone uses the same tool, everyone goes through the same training," Moore says. "No-one is to participate in a negotiation until they have gone through, and tick yep, we’ve done the planning, we’ve got the forms filled out, done all the calculations, we know our strategy; all of those things have to be done 100 per cent, before you can step into the negotiation room ... on behalf of BP." Moore says, initially, an organisation's desire to improve its negotiation practices usually stems from the buy-side, and the need to save money. The realisation then follows that perhaps, for reasons unknown, different employees are getting different results, or a formal process is missing. Moore cites a five-stage process, whereby both the lack of - and need for - a process is recognised and then formalised, measured and incorporated to reach a final point at which compliance measures are introduced and the results kick in. He says while most organisations have a sales process, they may not be aware of the behaviours needed to execute it, which comes from asking the right type of questions. "The types of questions matter actually quite a bit, both in selling and negotiating, so we can bring that behavioural analysis and research and models, and then plug it into that process and help them execute it better," Moore says. In focusing on tackling negotiation from the standpoint of solving a business problem and looking at growth - creating more value on the sell-side and savings on the buy-side - he says Huthwaite tends to deal at a very strategic level, rather than running a one-off training event; with HR departments being an important part, but not necessarily the target buyer. The firm's clients are mainly involved in business-to-business sales and relationships, including banking, IT, healthcare, and professional services, but also extend to areas such as private banking, where the relationship is more business to client. "We are not trying to sell training; we are focused on how we can help the business grow or save," Moore says. For more on sales negotiation check out our white paper below. Whitepaper: Are your people Negotiating or Concession making?
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