Covid-19 Triggers Tough Negotiations (Part 1)
Clients who are now suffering will shortly make you suffer too. They will be much more price sensitive and cautious than before. They are reading the same newspaper articles and watching the same news programmes you are, where it is all doom and gloom right now and the same prospect for going forward. In 1929, everyone stopped spending and unfortunately that included the governments around the world. This time we are better informed and the Japanese government is trying to prop up the economy.
Clients may have not spent the lockdown boning up on economic history, so they may have forgotten some of the hard won lessons of the past. In Japan, the safest option is to do nothing, at any point in time and particularly so in a crisis. That means sales are going to be hard to come by and the previously agreed pricing is going to be on the table for renegotiation. Are you ready for that?
Let’s go over the basics again, so we are ready and able to join the conversation with the buyer and not get killed. Before getting into any negotiations, we need to specify the following items:
Our Position
What are some of the features and details of our offering, which we consider are negotiable items? In a realistic appraisal of the “New Normal”, what would now comprise our ideal outcome? Given things look like the virus may get contained a long way ahead of the recovery from the economic damage, what would constitute a realistic outcome? If we can’t get what we want, can we get what we need and if not, what is our fallback position?
The Client’s Position
What do we imagine the client’s fallback position will look like during Covid-19 and in it’s immediate aftermath? We must try to identify what, from a client point of view, would be a realistic outcome for them? Putting ourselves in their moccasins, what do we suppose would be the client’s ideal, realistic negotiation result?
Our Analysis
We should start looking for alternatives and ways to add value. Things have changed, so we need to get busy discovering the client’s new positions and new interests. Everyone is feeling stressed so we should be sensitive to reframe conversations so as to avoid confrontation
What We Will Present
Prepare the client’s case as though it were ours, for this current crisis situation. We should put a lot of effort into presenting value added alternatives, to head off buyer resistance and sales offer rejection. Link your excellent solution to the client’s current positions and vested interests
How Will We Bargain
In the face of Covid-19 and the resultant global economic meltdown, identify exactly what are your ideal, realistic and fallback positions in the negotiation. Respond to harsh or tricky client tactics, rather than reacting to these new approaches by the client, as they try to drive your pricing into the ground. Communicate your suggestions and proposals in ways which are easy to agree with and hard to reject.
What Should Be In The Agreement
Specify all points of agreement during the negotiations, in order to head off future trouble. When clients are in survival mode, we often find the Marquis Of Queensbury rules have been tossed out the window. Things can cut up rough. That means we need to put every agreement into writing, so that there is a record and clarity around what was agreed. Create a checklist and schedule for order fulfillment that both sides are in agreement with and get that signed off.
Sales is a demanding profession when the economy is working and a nightmare when it is crashing. We may have had agreements and price points set in the past, but that is now ancient history. We don’t want to be discussing post lockdown business with the client and get waylaid by stiff demands to “improve” our price point, terms, conditions etc., or else!
Salespeople Should Start Preparing For V-J Day
At what point will things get back to some semblance of normality? It is a bit like trying to pick the bottom of the current stock market drop. We won’t know until after the event, but it will happen. The Covid-19 numbers in Tokyo are gradually coming down, the lockdown in most prefectures has already been partially released. We are not talking aeons here. Actually, we are now talking days until the official lockdown will end. Yes, there will be restrictions, but for all of us, it is that great feeling you get when you stop bashing your head against a wall. Okay, none of us has ever bashed our head against a wall in our entire lives, but we all get the general idea. The pain point has either reached peak or must be close now for a lot of companies. That means that the sleeping giant that is the Japanese economy will gradually tear off the thethers that have enveloped it and we will be able to get the wheels of commerce driving forward again.
As salespeople, are we going to wait for the all clear siren to sound or are we going to get going now, in anticipation of Victory Japan Day in our war with the virus? Our clients are gradually emerging from their fetal positions and starting to look around them, wondering how to get things rolling again. Guess what? We are right here to help them do that. There will be pent up demand, there will be fresh demand, there will be no demand. We need to be talking to our buyers to determine which category they fall into. I would guess that nothing will be done on our timetable based on what we desire, as far as rebooting revenues go, but that is definitely the light at the end of the tunnel which we can see.
The broad commercial downturn will have either mortally wounded some of our competitors or at least given some of them seriously debilitating flesh wounds. We may be carrying a few of those ourselves. The survivors though, are self-selecting to serve clients and clients themselves are going to be happy that we have survived, because they like dealing with companies which are reliable and dependable. Basically, they like winners.
We should get the entire sales team charged up to hit the phones, pound hard on the keyboards and get cracking contacting all of our clients to get a pulse check going, on how far out of hibernation they have emerged. There will be early, middle and late contenders for celebrating V-J day, but the point is we want to be the one having that celebratory conversation, not our competitors.
One of the downsides of this process of emerging to fight another day, is our own mental framework. We may be scarred ourselves from the lack of commissions, mental stress, the grinding pressure, the moronic beatings handed out by idiot bosses or demonic buyers. We will now be unleashing the equivalent of a massive cold calling campaign, as we get in touch with inactive buyers. They haven’t been available or ready to speak and here we are, all preppy and bristling with desire to do a deal.
For many buyers that won’t fly, as they may be emerging very gracefully from their industry chrysalis. However, by casting a broad net, we will pick up those beautiful butterflies ready to move or those who at least are ready to make a plan for a move. Japanese companies love the intricacies of the planning function and for many months, their planners have left their favourite weapon in their holster. They may be getting ready to do a quick draw and get back to work on their responses for navigating this U-shaped recovery. We need to be at their side to help them do just that.
Perhaps things won’t spring back quickly, but they will come back. Are we ready to go? The game may have changed in many industries. What was possible before is now out of bounds. Alternatively, what wasn’t considered kosher before now gets a look, as the world has changed for them. The key is to know what they are thinking, what they are seeing, what they are planning. If you are not doing this, your still extant competitors will be doing it. Make sure you, not they, are the one gorging on the business feasts to be had, following V-J day.
Covid-19 Or Not, You Still Have To Master Client Objections
Client hesitation or objections to buying from us are indicators we have failed in some keys areas in our preparation, questioning or solution explanation with the client. We have not fully understood what the client needs, have not matched our solution with what they need, have not shown sufficient value from our solution and have not created any sense of urgency to take action now.
Here is a five step process for handling client push back on our offer.
The objection we are hearing is probably something we have heard before. We think we already know what the client is going to say before they finish and we jump in to overcome the objection. Big mistake! We have to wait to hear them out and really understand what is the problem, not what we think is the problem.
When we hear the objection we often say the first thing that comes into our mind. This is rarely our best response. We need a few seconds to think how we are going to approach this issue with the client. This is where we make a neutral statement, which neither agrees nor disagrees with the client, so we can buy ourselves some thinking time. It might be something like, “I know making the right decisions for the company is very important for you”. In the few seconds it takes to say that, our brain can move to professional objection handling mode rather than reacting emotionally to what was said by the client.
The first thing we should do is not respond to what we heard. Instead we should ask them why that objection is a problem. What is the exact issue we need to fix? We need to get the client talking because we will pick up valuable information about their situation and constraints on them moving forward. An objection is often shorthand for a much more complex set of reasoning as to why they are not going to buy from us. We need the complex version not the abbreviated headline.
Now we know what we need to say and we have three choices:
Deny: Do not accept anything from the client which is factually incorrect or is misinformation. Correct it immediately and be prepared to offer proof.
Admit: Admit any problems your company has had now or in the past. Don’t try and deny things which are true, we just seem untrustworthy.
Reverse: Turn the objection into a reason for buying.
When we respond we need to consider the interests of the buyer – who are they? We need to be talking about things from their point of view.
Are they the Executive Buyer looking at the big picture, the Financial Buyer looking at the cashflow, the Technical Buyer worried about the spec or the User Buyer worried about reliability and ease of use?
We need to ask more questions because we have missed something: What is their primary interest – the thing they are trying to achieve, their buying criteria – budget, timing etc., other considerations – payment terms, delivery times, warranties and their buying motive – what will it mean for the client if the solution works well?
Now we have better understood the client’s situation and needs, we start again to persuade them to buy. We need to provide proof and evidence that shows what we claim is true and they can trust the solution will work.
Check that we have dealt with their objection completely. Are they ready to move forward? If not find out why and work on that issue.
We may be in lockdown, but the basics of sales have not changed. Clients will have all sorts of reasons why they don’t think they can buy from us right now. How we deal with their pushback differentiates the dilettante from the professional.
Typically we speak at 150-200 words per minute but we can listen at up to 600 words. We have excess capacity and sometimes our concentration strays and we stop really listening to others. We might be thinking instead about what we want to say or what point we need to bring up. Have you noticed this about yourself? We miss a lot of valuable information when we are not fully listening to others. We have to hear with our eyes, watching their body language and we have to listen for the tone with which they deliver the words. Sounds reasonable, except today, we are trying to do all of this via a small screen with bad audio. Even worse, the person we are talking to is trapped in a little tiny box dangling in the screen corner.
There are three levels of listening. Which one are you demonstrating, when you are on-line
Distracted
The on-line audio quality isn’t all that great yet, which makes it even harder to hear what is going on. We are also possibly thinking so much about something on our side, we are not really paying close enough attention to the client. We find we may have missed some key details and we may be ignoring the nuance of what we are being told. We cannot concentrate well at home, because the kids are running riot. We could also be thinking about the brilliant thing we are going to say next. The upshot is, in reality, we are just pretending to be listening. On-line is even more deadly too. While the other person is speaking, we may be multi-tasking in the background, like a demon on speed, making the whole conversation clarity even more fraught.
Selective
This is very typical for salespeople most of the time, on-line or otherwise. We are listening for words or phrases that indicate we can advance the sale. We tend to tune everything else out and just listen for what we want to hear. The issue with this is that clients may have subtle concerns which we need to address, but we are not even aware of them, because we missed the hints they were giving us. With everyone at home or having only half the team in the office, client companies internal communications can also be disrupted. We need to pay close attention to find out how they are operating their approval system in this Covid-19 lockdown environment.
Attentive
When we are attentive, we are 100% focused on what the client is saying. We are not cutting their sentences off or finishing their sentences for them. We are allowing them to tell us and we are taking it all in. If we speak while they are speaking on-line, no one can hear anything of what was said. We need to really avoid this. If we have an idea or thought, we can just jot it down in short form and keep listening, knowing that we can bring it up later. At this level, we can become empathetic to what they client wants, because we have fully understood all the nuances around what they want and how they are thinking about business at the moment.
Here are 8 Listening Principles to apply to our daily work with clients.
Don’t always look at the screen, when they are talking. Instead, wherever possible, look at the camera on your computer. It is a bit weird though, because they appear to us on screen about 10-15 centimeters below the camera. We have to ignore the screen version and look straight at the camera when they speak. What they will see, is us looking straight at them, following carefully what they are saying.
Our body language can tell a lot, because we may be saying one thing but showing something quite different. On screen it is not easy, but we have to observe the client’s body language and also control our own at the same time. Even on small screen versions, you can see changes in client body language, if you pay close enough attention and you should. The remote environment is starving us of feedback, but we have to do our best.
Salespeople are desperate at the moment. Sometimes we may want to move the conversation along so that they decide to buy from us. We need the client to feel fully understood though and the best way to do that is shut up and listen to them without breaking in. If you are a chronic interrupter of clients, when speaking face to face, the chances are you will bring this into the remote world as well. Don’t do that.
4 Listen empathetically
This requires supreme concentration. We are not just listening to the words we are listening to the emotions behind the words. We are trying to see it from the client’s point of view. Fathoming the intricacies of the client’s current world through a little box on screen is a nightmare, but we have to try.
We often make mistakes in daily conversation, misinterpreting what someone said. We usually had something in our mind which was overriding what our ears were hearing and so we make errors in the follow up or the next steps. Some clients are not so articulate and we can become unclear about what they want. The on-line audio quality is not helpful, so it is easy to miss key words or even whole sentences may suddenly drop out. We need to check what we heard. We should make it our habit to summarise and feedback what we understand to be the next steps.
We hear something, our mind races forward imagining some future circumstance or situation, but it may be totally incorrect. This was not what the client was alluding to and we went off in another direction. We do this because we are not concentrating on what we are being told. Wait until the end of the client’s sentence, clarify any key points and only then, add your contribution to the business conversation.
Turn off all phones and other screens. Try to meet in a quiet on-line environment. If the kids are stuck at home, unable to go to school, this may be impossible for you or for the client or for both sides. If the client gets distracted, we should repeat what they were saying to help them continue where they left off.
We have to halt the desire to concentrate on what we want to say and focus on what the client is actually saying. We have to be in the zone with them completely. Only in that way will we be able to really understand their needs and how best we can serve them. Easier said than done in this current remote communication situation, bit still a critical goal.
Meeting remotely may be convenient in lockdown, but it is not without its challenges for salespeople trying to generate revenues. The meetings will not be perfect because of the technology, but on our side, we have to bring our A Game listening skills to the fore in the virtual world.