Strategic negotiations: a double know-how strategic

Strategic negotiations: a double know-how … strategic

A negotiation becomes strategic when it changes the structure of the partner’s business model. It generates new revenue streams or changes its cost significantly, and often both. It is not to be confused with wholesale sales. Selling copiers to a major bank is not strategic. Selling an e-commerce application to a network of some cosmetics stores changes the prospects for sales and profits and is strategic. Some sectors are still strategic: engineering, investment banking, heavy capital goods, patent trading, etc. But selling can become strategic in all sectors. Selling a fleet of electric bikes to a delivery person is strategic. Renting premises for a restaurant is strategic.

Double know-how is necessary. First of all, traditional sales skills and negotiation : Qualifying a customer, establishing a contact, managing the interview phases, arguing for a product or service, practicing pricing tactics, handling objections and complaints, nurturing relationship. But a bunch of additional local marketing skills is necessary and we will develop it further.

Model the Ecosystem: Identify the network of VIP decision makers and influencers.

The customer takes a high risk, consults influencers and communicates his decisions to several decision makers. Strategic selling is part of a complex ecosystem. The seller must understand the relationship game, research and collect professional information on the networks about these people and their organizations. Of course, LinkedIn is the must-have tool and others keep adding more features. Artificial intelligence helps to use customer communication, understand roles and trigger actions. The multiple targeting of the seller is strategic, it is based on the marketing data it is an extension of and in turn provides him with data from the sales force.

Enter the network: develop your image as a potential source of opportunity

As an extension of marketing communications, the strategic seller needs to know how to start a conversation from a point of mutual interest that they uncovered in their previous research. The pitch is based both online and in person on managers’ motivations: customer acquisition, profit, customer satisfaction, process efficiency, etc. It synchronizes a micro-communication to multiple people per deal, initiated by the core marketing messages. Again, artificial intelligence helps the seller generate a Tell stories specific to each interlocutor.

Create your negotiation cards: strengthen your capacities

Marc Diviné, Director of A2Z-Innovation and Lecturer at the IAE-Paris Panthéon Sorbonne

Marc Diviné, Director of A2Z-Innovation and Lecturer at the IAE-Paris Panthéon Sorbonne

The art of the strategic negotiator is evident in the preparation before the negotiation. He raises his trumps, the trading cards, in several directions. First, the human factors, for example, sending interesting information, being recommended by a VIP… Then the motivating factors, such as risk reduction, image improvement, etc. Pricing tactic factors: benchmarks, posters, target, breaking point, increased counterparty requirements, non-financial concessions . Other cards, the factors of the case: the flexibility and rigidity of the business model, the competitive breaking point, the urgency, etc. Finally, he decides his behavior: the approach by expanding or centering needs, the attitude towards promises towards tailoring, his contractual flexibility on certain clauses, asking other people, technicians, lawyers, executives to participate in job interviews… Central Marketing offers training on negotiation charts, such as personalization limits, and is also an avid user of charts made by sellers became.

Conduct negotiations based on the simulation of the customer’s KPIs.

The seller identifies the customer’s KPIs, strategic performance indicators on the basis of which he will act: in particular, the company’s return on investment and the total cost of ownership…. Thus, if the customer’s cost reductions are tripled, a double price offer is made. His argument focuses on “KPI effects”. Tactically, a distinction must be made between capital and operational costs, which have separate budgets and different signatory levels. It alludes to sale in batches or on a global scale, to alternative purchase or lease, to a prepared set of concessions and counterparties.

Negotiate the offer internally

It is exceptional that a request of a strategic nature from a customer corresponds exactly to the products or services in the catalogue. The required tailor-made adjustments are worked out in a “contract review” by the sales representative. He conducts internal negotiations on the definition of the product and services with research and development, production, logistics and pre and after sales service. He must agree on the calculation of the cost price and the margin and negotiate the agreed price with a breakeven point. All these activities are an integral part of central marketing. They are taken over on site by the strategic negotiator, who also acts on the strategic KPIs of his company.

adopt a book

As we can see, the strategic negotiator has classic marketing know-how in the areas of targeting, determination of customer benefit, customer journey, internal management, but limited to the local scope of the market granted to him. In fact, he decodes his ecosystem, uses microcommunications, creates an argument, a concrete offer and becomes the internal project manager. Both marketing and strategic sales serve customers and increase the company’s profitability. The first manages a market, the second a limited number of clients, sometimes just one, but consists of a complex network of decision makers and influencers inside and outside that client. This local marketing is supported by central marketing: product training, messages to customers, CRM tools, events, concrete action proposals for customers. Conversely, all local activities become a source of customer knowledge and new programs for central marketing. A positive loop collaboration strategy.

Author: Marc DivineHead of A2Z innovation and teacher at the IAE-Paris Panthéon Sorbonne

(c) Fig. DepositPhotos

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