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CHAPTER 13 10th Edition Selling Today Manning and Reece Negotiating Buyer Concerns 13-1 Learning Objectives • Describe negotiations as part of a win-win strategy • Describe common types of buyer concerns • Outline general strategies for negotiating buyer concerns • Discuss specific methods of negotiating buyer concerns • Describe ways to deal effectively with buyers who are trained in negotiating 13-2 Six-Step Presentation Plan 1. Approach (Chapter 10) 2. Presentation (Chapter 11) 3. Demonstration (Chapter 12) 4. Negotiation 5. Close 6. Servicing the Sale 13-3 Negotiation Defined • Working to reach an agreement that is mutually satisfactory to both buyer and seller • Negotiation is a process • Ability to negotiate problems or objections is a most effective way to create value 13-4 Negotiation: A Win-Win Strategy • Personal selling is not a “we versus they” process • If trust is strong, negotiation becomes a partnership to work through, if not, negotiation becomes combative • Seek to maintain long-term relationship 13-5 Strategic Planning Leads to Actions 13-6 FIGURE 13.2 Strategic Planning 13-7 Common Types of Buyer Concerns • Customers may have concerns related to: • A need for the product • Product itself • Source of the product • Pricing • Timing 13-8 Need for Product • Conditioned response: “I don’t need the product.” • Sincere need resistance a great challenge • Not convinced of your product’s benefits • Best way to overcome—prove your product is a good investment 13-9 The Product Itself • Product not well established • Product will not be popular • Associates did not like the product • Present product/system is satisfactory 13-10 Source of Product • Ways to overcome include: • Identify how product solves problems • Superior benefits of your product • Illustrate profits from adding second line • Place trial order to evaluate merits • Recruit champions inside buyer’s firm • Stay visible and connected to client 13-11 Price Concerns: Trained Buyers • Buyers trained in negotiation • Budget limitation tactic • Take it or leave it • Split the difference 13-12 Negotiation Training by Acclivus See the Website 13-13 Price Concerns: Low Price Strategy • Transactional buyers seek low prices • Empowered salespeople able to apply various discounts • Downside, lower profits and lower commissions 13-14 Dealing with Price Concerns • Do clarify price concerns with questions • Do add value, stress service • Do not make price focal point • Do not apologize for the price • Do point out price/quality relationship • Do demonstrate difference between price and cost • Do not make concessions too quickly 13-15 Price Iceberg • Price is only the tip of the iceberg; remind customer of value-added factors below tip FIGURE 13.3 13-16 Price Versus Cost Example • Note how Canada’s Bombardier positions its CRJ against Airbus FIGURE 13.4 13-17 Concerns Related to Time • Also known as “the stall” • Usually customer does not perceive benefits of buying now—or sees both positive and negative in product 13-18 Customer Objections • Customer objections are often requests for more information to justify buying decision TABLE 13.1 13-19 Discussion Question Imagine you are selling ACT! CRM software to a real estate company that uses a paper filing system to keep track of customers and their properties. How would you respond to each of these buyer concerns? • A need for the product • Product itself • Source of the product • Pricing • Timing 13-20 Negotiating Buyer Concerns • Know value of your offering • Prepare for negotiations • Understand the problem • Create alternative solutions • Find points of agreement • Know when to walk away 13-21 Use a Negotiations Worksheet FIGURE 13.5 • See the text for the complete figure 13-22 Specific Negotiation Methods • Direct denial • Refute prospect’s opinion or belief • Be firm, not offensive, think win-win • Indirect denial • Acknowledge prospects as partly right • Feel-Felt-Found • “I understand how you feel” • “Others have felt that way” • “Until they used the product and found it quite easy and reliable” 13-23 Specific Negotiation Methods • Questions • Convert problem into need-satisfaction question • “How would a 30 percent reduction in breakdowns affect your company’s profitability?” • Superior benefit • Acknowledge prospect has valid concern and focus on superior benefit • Superior benefits should outweigh specific customer concerns 13-24 Specific Negotiation Methods • Demonstration • Discuss competitive advantages of your product • Demonstrations overcome buyer skepticism effectively • Trial offer • Prospect tries product without purchase commitment 13-25 Specific Negotiation Methods • Third-party testimony • Neutral third-party testimony adds credibility • Almost never triggers client argument • Postpone method • Postpone answers to client concerns until later in dialogue • Explain why you want to postpone 13-26 Negotiation Tips See the following for suggestions: • trainingexpert.com • work911.com • mindtools.com 13-27 Application: Digital Electronics • Go to a consumer electronics store and ask for help with laptop/notebook PCs • Raise a series of concerns and note how salesperson reacts • Price is too high • Heard that brand “XYZ” is bad • Maybe it’s not time to buy 13-28