49:1 Return on Investment from Better Sales Negotiation
The Client

National accounts sales organization of a worldwide leader in package shipping and logistics.

Strategic Goal Improve profitability, decrease discounting, and foster more creativity in meeting customer needs in an environment of increasingly price-sensitive customers.

Negotiation
Challenges

Extensive research within the company established that in spite of a strong market position and a highly professional sales organization, sales professionals were challenged in a number of important areas:

  • Establishing value for the company's services, which customers perceived as "commodities."
  • Knowing when and how to walk away from unprofitable business.
  • Differentiating the company from competition, and anticipating likely competitor "moves" during competitive sales processes.
  • Negotiating a sales process that would get sales professionals in front of true decision makers.
  • Uncovering key buying criteria, and fully developing all buyer needs.
Negotiating
"Wrong Turns"

BayGroup International identified the following critical negotiation mistakes, which were leading to lost sales opportunities, reduced customer satisfaction, and lower profitability:

  • Giving away too much, too quickly in customer negotiations.
  • Focusing on the company's agenda rather than the customer's.
  • Inability to identify and fully utilize all leverage opportunities to craft the most profitable deals.
  • Failing to plan for negotiations.
  • Becoming emotional during negotiations.
  • Negotiating with the wrong people.
  • Allowing price to become the focus of the negotiation too quickly.
  • Not listening effectively enough to customers during negotiations.
The Solution

BayGroup International's solution included:

  • Extensive data collection with senior managers and the sales negotiating team.
  • Analysis of past negotiation experiences, identification of negotiation challenges and mistakes, and development of a behavior change initiative to address them.
  • Implementation of Situational Sales Negotiation™ for sales professionals and their managers.
  • Management Reinforcement Workshops™ attended by sales managers in which they learned how to coach sales professionals to negotiate more profitable deals.
  • A one-day, highly customized follow-up workshop, SSN 2: Negotiating Value™ delivered to graduates of Situational Sales Negotiation™.
  • A number of other reinforcement activities, including audio-tapes, follow-up meetings, and revision of company pricing tools to support effective negotiation.
The Results

Significant results from the initiative, which were tracked via survey after the initiative, and which were validated by management, included:

  • Increased confidence and negotiation skills, with skill improvements of over 100% in some areas.
  • Over $700 million in sales identified by program participants that would not have closed if it had not been for application of new negotiation skills.
  • Over $18 million in profit contribution from decreased discounting and fewer "giveaways" during the sales process.
  • A 49:1 return on the company's investment in the initiative.
  • A wide variety of non-quantified benefits from better sales negotiation, including: introductions to new buying centers, improved customer satisfaction, increased creativity in solving negotiation problems, and protecting business from competitive inroads.
Client
Comments

"The workshop was excellent, it helped me improve my communications and negotiation skills."

"The information that was presented in the workshop is extremely relevant to my job performance, but also the company as a whole."

 


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