Transcript CHASE ANALYSIS

10 Steps to Developing Successful
Negotiation Strategies
There are no simple solutions to selling complex data sales
Presented by:
Steven Rand
Developing Successful Negotiation
Strategies
• There are multiple points of view to consider when looking to
successfully penetrate a new enterprise account – or maintain and
grow your established position as a primary data provider:
• The Buyer – There are multiple “buyers” to ID and understand their
challenges and pain points
– The relationship owner – usually the primary user of data but
could also be de-centralized
– Internal business unit customers – ID their issues, applications
successes, build ROI’s when you can and you enhance your
opportunity to be successful
• The Existing Data Vendor
– feels the pain for any data gaps and anomalies
– Looks to build barriers to exit that will make it difficult to migrate
to a competitor
Developing Successful Negotiation
Strategies
– Need to constantly work hard to reinforce value
– Must provide roadmap & timeframes on enhancements
– Must develop POC evaluation process for consideration of new
data
– Must understand how data is licensed & integrated
– Must understand the clients perception on the value of data to run
their business to establish price
• New Data Vendor
– Consider positioning value as the secondary vendor or
complementary data to fill data gaps or specialized niche
– Need to sell their value – not against competitor
– Need to learn what data is important , by whom and buying process
and culture
Developing Successful Negotiation
Strategies
What do we need to know & do to get a good deal done?
1. Find Pain or Reward Points – what depts. Or individual are on the line to
produce results – are they our contract signer or internal user & customers of
your key contacts?
Examples:
•
Migration from legacy systems to new platforms may represent good
opportunity
•
Merger & acquisitions – need to consolidate disparate customer files
•
Data gaps – what other data is important & who can supply it
•
New web data extraction capabilities – is this an opportunity or risk to you as
the established vendor or opportunity as new provider trying to gain access
Developing Successful Negotiation
Strategies
2. How Are Clients Using Your Data & Services – What would happen if
“we went away”? Would it be less expansive & easier to accomplish
their mission or more difficult & expensive?
• Build consensus on needs & understand budget process
• Who are the internal users & who pays?
• Is the data supporting a single application or integral to a business
process that is part of ERP or CRM?
• Is data going to be distributed across multiple business units? If so, how?
• What is clients success using your data? Can you develop an ROI?
• Who else are they licensing data from? What type of data, how used and
what success? Are they a threat?
Developing Successful Negotiation
Strategies
3. Understand Their “Buying Cycle” – Who makes the
decisions, when does their budget cycle begin, how is it
handled between business owners, internal users and
procurement
 You have selling cycle- customers have a Buying Cycle
 The selling cycle does not begin until you ID the buying
process
 You need to get inside that cycle to plan & correctly develop
your strategy and timelines
 Is this account a good candidate for a multi-year deal?
 What would make it attractive for them: price stabilization or
added value services, others?
Developing Successful Negotiation
Strategies
4. Are Competitors Lurking in the Background – What are they
offering?
 Sometimes competitors are internal processes already in-place
 Sometimes human inertia to do nothing new – too risky
 Change direction from need to discount to meet competitive
pressure to:
 Offer added value data/service for Year 1 evaluation
 Always provide “market” price for next year’s renewal – don’t
let client come back & say “ we didn’t budget for increase”
 How loyal is the account to their vendors? Will they defect over
price?
Developing Successful Negotiation
Strategies
5. Has the World Changed
 What’s new within their organization?
 Any re-organization or new people that can affect the deal?
 If so, where did they come from & what is their experience
using your data vs. competitor data?
 What sources are you using to stay current on company,
industry?
 Yahoo & Hoover’s, Cortera, First Research good sources to
keep up with the company and their industry
Developing Successful Negotiation
Strategies
6. Are You Properly Using Time Regulators – under what conditions can they
work or backfire?
 Until you know their buying cycle, pain/reward, how they will use & budget
don’t use timing to pressure close
 Time regulators may artificially meet you sales needs but do they offer
anything to the customer?
 Early Renewals - what happens at next renewal time if you pushed them
into an earlier month that is not sustainable?
 Doesn’t work for “business as usual” – most have some value to client
 Using discounts to drive early renewal can backfire when they expire with
no deal
 Pressure closing can have negative blowback from a resentful client who
doesn’t “forgive or forget”
Developing Successful Negotiation
Strategies
7. How Can You Maintain Price Integrity During Negotiations
 When giving up something ask for something back
 Not enough budget to cover all needed deliverables – shorten term of
agreement- what’s so special on a 12 month deal?
 Customer concern on receiving value – can’t always use data or services
immediately – takes time to load and distribute via internal systems
 offer 1 time implementation credit but show “market price” for
renewal
 Offer something incremental for their evaluation to protect price
 Limited budget – consider “Single Application Pricing” that restricts
terms of use of data
Developing Successful Negotiation
Strategies
8. Are You Thinking Outside the Box
 Uncover what it will take to make the deal then determine best way to
package the appropriate offer
 Who has similar sales situation at other accounts that can assist you in
putting deal together or getting through barriers?
 What other external costs are going into using your data?
 What is the competition for the budget dollars and can you offer a single
source solution eliminating other data providers to save your client
money?
 For example, do some ad hoc processing to eliminate or minimize
service bureau costs
Developing Successful Negotiation
Strategies
9. How Do You Develop an ROI that Makes Sense
• Is your data embedded in data warehouses as are part of
overall solutions that drive segmentation, business
development, coverage strategies, etc.
• How can you figure out what your contribution is that
can be attributable to ROI?
• My experience – find one or two programs where you
drive savings or increased results
– Removed higher priced provider for similar or duplicate data
– Improved response rates, lower nixie rates, more current data,
better in-depth content, etc
Developing Successful Negotiation
Strategies
10. When You Hear a Good Deal – Take It!
• The deal has to work for both parties – find out what makes a good
deal for them & tell them what makes a good deal for you
• Account reps & support team know their client the best – who is
getting value from their contract & who is underutilizing or receiving
limited value – must be factored into negotiations and corrected in
subsequent contract year
• Communicate internally early in the negotiating cycle so your sales
leaders believe you got the best deal possible
• Limit 2nd guessing – get internal pricing alignment , discuss pricing
options, etc early so that all issues are open for input and resolution
prior to start of negotiating with your client
• Start your renewal process the day after the deal is done………!
Contact Us
Our approach is to deliver success through
strategic consultation and tactical implementation
Contact us to see how we can best support you:
M2b Strategies, Inc
1 Horizon Road
Penthouse 4
Fort Lee, NJ 07024
201-886-7261
[email protected]
www.m2busa.com